The Blue Ridge Café’s budget for next year is as follows:

Revenue: $765,000
Total Fixed Costs: $91,000
Total Variable Costs: $512,000
Total Costs: $603,000
Net Income (before tax): $162,000
Estimated guests served: 89,470                                                                                                                                   What is the guest check average?

To calculate the guest check average, you need to divide the total revenue by the estimated number of guests served. The guest check average represents the average amount spent per guest.

Here's the formula:

\[
\text{Guest Check Average} = \frac{\text{Revenue}}{\text{Estimated Guests Served}}
\]

Substitute the given values:

\[
\text{Guest Check Average} = \frac{765,000}{89,470}
\]

Now, calculating:

\[
\text{Guest Check Average} \approx 8.55
\]

Thus, the average guest check is approximately **$8.55**.

Would you like more details on this? Here are 5 follow-up questions to expand on this topic:

1. How would the guest check average change if revenue increased to $800,000?
2. How can an increase in variable costs affect the guest check average?
3. What would happen to net income if guest check average increased by 10%?
4. How could adjusting fixed costs impact the café's overall profitability?
5. What would be the effect of serving 5% more guests without changing the revenue?

**Tip:** Keep track of both fixed and variable costs when analyzing profitability; small changes in guest numbers or pricing can have a big impact.

The Blue Ridge Café’s budget for next year is as follows:
Revenue: $765,000
Total Fixed Costs: $91,000
Total Variable Costs: $512,000
Total Costs: $603,000
Net Income (before tax): $162,000
Estimated guests served: 89,470
What is the guest check average?

Learn how to calculate the guest check average for Blue Ridge Café with a budget that includes $765,000 in revenue and 89,470 estimated guests served. This solution walks through the formula for guest check average, showing step-by-step how to arrive at the result of approximately $8.55 per guest.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation