Number of covers=$5000

Selling Price=$150
Variable Cost=$60000
Fixed Costs=$20000
Sales=$100000
$
Contribution Margin Ratio=Sales - Variable costs
=100000 - 60000
=40000

Break Even Point (sales)= Fixed costs

Contribution margin ratio

= 20000
0.4

= 50,000

Break Even Point (cover) = Fixed Cost

Contribution margin per cover

= 20000
(40000 ÷5000)

= 20000
8

= 2500 covers

Sales (S) to achieve target profit = Fixed costs + target before tax profit
Contribution margin ratio

= (20000 + 500000)
0.4

= 520000
0.4

= 1300000

Sales (cover) to achieve target profit = Fixed costs + target before tax profit
Contribution margin per cover

= (20000 + 500000)
8

= 530000
8

= 66250 covers
Convert after tax profit target to before tax profit target= After tax profit target
( 1 - tax rate)

= 500000
(1 - 0.3)

714286
 %
100%-60%=40% C/M Ratio=40