(Solved): A 100 -seat restaurant with average daily turnover of 2 and average check of \( \$ 15 \) opens 365 ...

A 100 -seat restaurant with average daily turnover of 2 and average check of \( \$ 15 \) opens 365 days a year. Food cost is \( 38 \% \) of revenue and other variable costs is \( 22 \% \) of the revenue. Fixed costs are \( \$ 220,000 \) a year. a. Calculate the restaurant's present annual operating income. Show your work here Answer Revenue Variable costs Food cost ( \( 38 \% \) of revenue) Other VC Contribution Margin Fixed costs Operating Income b. If the owner decides to increase average check to \( \$ 17 \) and spend \( \$ 30,000 \) more on advertising in order to increase operating income to \( \$ 250,000 \) and add \( \$ 20,000 \) his own salary. Assuming the variable costs per customer do not change, how many more (or less) customers the restaurant needs to serve now (compared to the original situation)? Hint: New average check: \( \$ 17 \) Additional advertising: \( \$ 30,000 \) (You need to decide if you should add this to the fixed cost or to the variable cost.) Additional salary: \( \$ 20,000 \) (You need to decide if you should add this to the fixed cost or to the variable cost.) b. If the owner decides to increase average check to \( \$ 17 \) and spend \( \$ 30,000 \) more on advertising in order to increase operating income to \( \$ 250,000 \) and add \( \$ 20,000 \) his own salary. Assuming the variable costs per customer do not change, how many more (or less) customers the restaurant needs to serve now (compared to the original situation)? Hint: New average check: \( \$ 17 \) Additional advertising: \( \$ 30,000 \) (You need to decide if you should add this to the fixed cost or to the variable cost.) Additional salary: \( \$ 20,000 \) (You need to decide if you should add this to the fixed cost or to the variable cost.) New Operating income wanted: \( \$ 250,000 \)