Question

The following forecast information relates to the Blue Dolphin Restaurant. Sales per month are estimated at 20,000 covers. Average selling price per meal = €12 Variable costs per meal = €4 Fixed costs for one month = €120,000 Fixed costs are not expected to change in relation to sales as long as sales remain within a forecast range of between 12,000 and 25,000 covers per month. The management of the restaurant needs to know the following information to plan for next month. a) How many meals must be sold to break even? b) How many meals must be sold to achieve a profit of €10,000 per month? c) What level of revenue is required to achieve the break-even point in (a) and profit level in (b)? d) What is the margin of safety based on the forecast level of sales and also based on the profit level in (b)?​

Answer 1

Answer:

Sales per month are estimated to be 20000