In Year 2004, the restaurant’s operating income (before tax) is 6.9 percent of total sales revenue….

An analysis of the 4C Company’s restaurant costs for the Year 2004 revealed the following:

Food and beverage: Directly variable with total revenue.

Salary and wages: $156,400 fixed, the remainder are directly variable with total sales revenue.

Laundry: Directly variable with total sales revenue.

Kitchen fuel: $3,800 fixed, the remainder are directly variable with total sales revenue.

China and tableware: Directly variable with total sales revenue.

Glassware: Directly variable with total sales revenue.

Contract cleaning: Fixed.

Licenses: Fixed.

Other operating expenses: Directly variable with total sales revenue.

Administrative and general: Fixed.

Marketing: Fixed.

Utilities costs: $3,100 fixed, the remainder directly variable with total sales revenue.

Insurance: Fixed.

Rent: Fixed.

Interest: Fixed

Depreciation: Fixed.

b. Calculate the restaurant’s total fixed costs.

c. Calculate the restaurant’s breakeven sales revenue and also express the breakeven in terms of the number of guests.

d. In Year 2004, the restaurant’s operating income (before tax) is 6.9 percent of total sales revenue. To increase operating income to 10 percent, how many extra guests are required?