Finance question on break-even sales..plz help!!!?

Question

For many years, Jake's restaurant has offered a lunch special for $4.50. Monthly fixed expenses have been $4500. The variable cost of a meal is $1.50. The owner believes that by remodelling the restaurant and upgrading the food services, he can increase the price of the lunch special to $5.25. Monthly fixed expenses would increase to $6300 and the variable expenses would increase to $1.75 per meal. Jake has a current seating capacity of 100 customers and he operates approx. 20 days per month.

What is Jake's monthly break even sales in dollars before & after remodelling?

Is it wise to remodel?

Answer 1

4.50 - 1.50 = $3.00

$4,500/$3 = 1,500 meals

1,500 meals * $4.50 = $6,750 breakeven before remodeling

5.25 - 1.75 = $3.50

$6,300/$3.50 = 1,800 meals

1,800 meals * $5.25 = $9,450 breakeven after remodeling

He should not remodel.  He'd have to sell an extra 300 meals per month to breakeven if he remodeled.  Also, assuming he can sell only 2,000 meals per month (100 seating capacity * 20 days), that means his maximum profit before remodeling is $1,500 (500 * $3) vs. $700 (200 * $3.50) after remodeling.