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P6.2 An owner invested $180,000 in a new family-style restaurant, of which $140,000 was immediately...

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Accounting

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P6.2 An owner invested $180,000 in a new family-style restaurant, of which $140,000 was immediately used to purchase equipment and $40,000 was retained for working cash. Estimates for the first year of business are as follows Menu selling prices to be established to give a markup of 175% over cost of food sold Variable wages, 28% of sales revenue Other variable costs, 7% of sales revenue Fixed wages, S5 1,600 Rent, $36,000 n Insurance, $4,800 " Depreciation on equipment, 20% -THIS IS A 5 YEAR FACTOR AFTER TAX Return on investment desired, 10%, the income tax rate is 25% The restaurant has 75 seats and is open 5 days a week for lunch and dinner only Lunch gesenus..will be 40% of total volume with 1.75 seat turnovers. Dinner revenue will be 60% of total volume, with 1.25 turnovers. Calculate the average check per meal period that will cover all costs, including desired return on investment

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