At the Virtual Cafe, the average price per meal sold is $20 with an average variable cost at 45% of the price. Fixed cos...
At the Virtual Cafe, the average price per meal sold is $20 with an average variable cost at 45% of the price. Fixed costs for July are expected to be $65,000. If the restaurant manager expects to sell 5,000 meals in July, the taxable income (EBT) of the month would be:
$5,000
$10,000
-$5,000 (loss)
-$10,000 (loss)
The University Golf Shop desires to make $10,000 on its taxable income (EBT). If the contribution margin is 50% of the revenues, and the fixed costs are $110,000; what is the required amount of revenues?
$20,000
$200,000
$220,000
$240,000
Homework Answers
| Q1) | Calculation Of taxable Income | ||||||||
| Sales | 100000 | ||||||||
| (5000 Meals *$20 per meal) | |||||||||
| Less: | |||||||||
| Variable Cost | 45000 | ||||||||
| ($100000*45%) | |||||||||
| Fixed Cost | 65000 | ||||||||
| Taxable Income | -10000 | ||||||||
| (loss) | |||||||||
| Therefore fourth option is correct. | |||||||||
| Q2) | Required Revenue = Desired Profit+ Fixed Cost/ Contribution Margin | ||||||||
| =($10000+110000)/50% | |||||||||
| =$240000 | |||||||||
| Therefore fourth option is correct. | |||||||||
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The 2019 Balance Sheet of the
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Victoria
Co.
Balance
Sheet
As of
December 31, 2019
Cash
85,000
Notes Payable
150,000
Notes Receivable
34,590
Accounts Payable
125,000
Accounts Receivable
35,000
Unearned Revenue
1,000
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Balance
Sheet
As of
December 31, 2019
Cash
85,000
Notes Payable
150,000
Notes Receivable
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Accounts Payable
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Accounts Receivable
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Unearned Revenue
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Less: Allowance for Doubtful A/Cs
(2,930)
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Interest Payable
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