Quarterly budget data for Hamburger Haven:
Sales $100,000
Costs:
Ingredients $30,000
Hourly employees 20,000
Manager's salary 10,000
Napkins, straws, and miscellaneous 15,000
Rent, marketing, and administration 20,000
Total Costs 95,000
Budgeted pre-tax profit $ 5,000
Hourly employees go home when the outlet is not busy. The rent, marketing, and administration costs include $16,000 that does not vary proportionately with sales volumes. The income tax rate is 20%.
a)Compute the revenues needed to achieve a target after-tax income of $45,000.
b)What is the margin of safety in revenue?

Question

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The Answer of Quarterly budget data for Hamburger Haven:
Sales $100,000
Costs:
Ingredients $30,000
Hourly employees 20,000
Manager's salary 10,000
Napkins, straws, and miscellaneous 15,000
Rent, marketing, and administration 20,000
Total Costs 95,000
Budgeted pre-tax profit $ 5,000
Hourly employees go home when the outlet is not busy. The rent, marketing, and administration costs include $16,000 that does not vary proportionately with sales volumes. The income tax rate is 20%.
a)Compute the revenues needed to achieve a target after-tax income of $45,000.
b)What is the margin of safety in revenue?

Quarterly Budget Data for Hamburger Haven