Quarterly Budget Data for Hamburger Haven

question 109

Essay

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?

---

Definitions:

Policies

Strategies or courses of action adopted and pursued by an organization, government, or individual.

Composition

The manner in which something is constituted, arranged, or planned, including the structure of a piece of writing, music, or the arrangement of elements in a work of art.

Leadership

The process of influencing the activities of an organized group toward goal achievement, requiring a combination of personality traits, managerial skills, and strategic vision.

Policies

Principles, rules, or guidelines formulated or adopted by an organization, government, or individual to achieve a desired outcome.