Carlita plans to establish a second restaurant, open five days a week, 50 weeks a year. Rent= $7,200 a month. Average customer pays $45.47. Average food cost per customer=$ 20.18. Insurance=$4,200 a year. Carlita hires 2 servers for 8 hours a day and a part time helper for 4 hours a day. She pays $15 an hour and pays employer Social Security tax ( 6.2% of gross pay). And Medicare tax ( 1.45% of gross pay) How many customers would Carlita need to serve each year for the restaurant to break even? Round to the nearest whole number.

Answer:Carlita's 2nd restaurant will need to serve 3,644 (with 3,643 still not break-even point) customers per year for the restaurant to break-even.Step-by-step explanation:1. Let's review all the information provided for solving this case:Carlita's 2nd restaurant will open 5 days a week, 50 weeks a yearRent = US$ 7,200Insurance = US$ 4,200Servers full-time (8 hours)  = 2Server part-time (4 hours) = 1Salary of the servers =  US$ 15 per hourAdditional costs to the restaurant : Social Security tax ( 6.2% of gross pay). and Medicare tax ( 1.45% of gross pay).Average customer consumption = US$ 45.47 Average food cost per consumer = US$ 20.18 Break-even point is when Revenue or Income is equal to the costs and there is no loss nor profitability. In other words, Revenue - Costs = 0.Customers needed to serve each year for break-even point = x2.  Let's find out how many customers would Carlita need to serve each year for the restaurant to break even? A. Let's calculate all the costs. The costs are in two categories : fixed and variables. Let's start with the fixed.Rent = US$ 7,200Insurance = US$ 4,200Servers full-time (8 hours)  = 2Server part-time (4 hours) = 1Salary of the servers =  US$ 15 per hourAdditional costs to the restaurant : Social Security tax ( 6.2% of gross pay). and Medicare tax ( 1.45% of gross pay).Let's calculate how much Carlita pays a year in salaries and salary taxes.For doing that, we need to know the number of hours the servers work, then:Total hours per day = 2 * 8 + 1 * 4 (2 servers * 8 hours and 1 server * 4 hours)Total hours per day = 16 + 4Total hours per day = 20Total hours per week = Total hours per day * 5 (The restaurant is open 5 days a week)Total hours per week = 20 * 5Total hours per week = 100Total hours per year = Total hours per week * 50 (The restaurant is open 50 weeks a year)Total hours per year = 100 * 50Total hours per year = 5,000Now we can calculate the total cost of the salaries paid to the servers:Total cost of salaries = Total hours per year * Cost per hourTotal cost of salaries = 5,000 * 15Total cost of salaries = 75,000Now we can calculate the total cost of the taxes, this way:Social Security Tax = Total cost of salaries or Gross Pay * 6.2%Social Security Tax = 75,000 * 6.2% = US$ 4,650Medicare Tax = Total cost of salaries or Gross Pay * 1.45%Medicare Tax = 75,000 * 1.45% = 1,087.50Now we can calculate the total fixed costs of Carlita's 2nd restaurant, this way:Rent = US$ 7,200Insurance = US$ 4,200Salaries Gross payments  = US$ 75,000Social Security tax = US$ 4,650Medicare tax = US$ 1,087.50Total fixed costs = 7,200 + 4,200 + 75,000 + 4,650 + 1,087.50Total fixed costs = 92,137.50The variable costs will depend on the number of customers that will eat at Carlita's restaurant, but we need to add up them to the fixed costs, this way:Total costs = Total fixed costs + total variable costsTotal costs = 92,137.50 + (x * 20.18) (US$ 20.18 is the average food cost per customer and x is the number of customers needed to serve each year for break-even point)B. Now, we can express the total income this way:Total income = x * 45.47 (US$ 45.47 is the average customer consumption)C. We're ready to write the equation for finding the value of x:Total Income - Total costs = 0Replacing with the real values45.47x - (92,137.50 + 20.18x) = 045.47x - 92,137.50 - 20.18x = 025.29x = 92,137.50 (Subtracting 92,137.50 at both sides)x = 92,137.50/25.29 (Dividing by 25.29 at both sides)x = 3,643.24Carlita's 2nd restaurant will need to serve 3,644 (with 3,643 still not break-even point) customers per year for the restaurant to break-even.