Carreras Café is a Spanish restaurant in a college town. The
owner expects that the number of meals served in June will be 40
percent below those served in May, because so many students leave
for the summer. In May, the restaurant served 4,800 meals at an
average price of $15. In the summer (June through August), the
average price of a meal typically increases by 35 percent and the
average food cost of a meal increases by 20 percent. Other costs
are typically unchanged during the summer. The following cost
information is available for May.
Service costs (variable with respect to meals) | ||
Variable service costs (with respect to meals) | ||
Food costs | $ | 11,200 |
Labor | 16,800 | |
Other variable costs | 5,700 | |
Fixed service costs | 9,700 | |
Total service costs | $ | 43,400 |
Marketing and administrative costs | ||
Marketing (variable with respect to meals) | 6,000 | |
Administrative (fixed) | 4,200 | |
Total marketing and administrative costs | $ | 10,200 |
Total costs | $ | 53,600 |
Required:
Prepare a budgeted income statement for June.
Sales Revenue | $ 58,320.00 | ||
Service Costs: | |||
Food cost | $ 8,064.00 | ||
Labor | [($ 16800 / 4800) x 2880] | $ 10,080.00 | |
Other variable cost | [($ 5700 / 4800) x 2880] | $ 3,420.00 | |
Fixed service cost | $ 9,700.00 | ||
Total service cost | $ 31,264.00 | ||
Gross profit margin | $ 27,056.00 | ||
Marketing and adm. | |||
Marketing (variable) | [($ 6000 / 4800) x 2880] | $ 3,600.00 | |
Adm. (Fixed) | $ 4,200.00 | ||
Total M&A cost | $ 7,800.00 | ||
Operating profit | $ 19,256.00 |
Workings | ||||
Sales Revenue | ||||
Units to be sold | (4800 x 60%) | 2880 | ||
Average price | ($ 15 x 135%) | $ 20.25 | ||
Revenue | $ 58,320.00 | |||
Food cost | ||||
Existing food cost per unit ($ 11200 / 4800) | $ 2.33 | |||
Units to be sold | 2880 | |||
Food cost | $ 6,720.00 | |||
Increase in food cost (6720 x 120%) | $ 8,064.00 |
Carreras Café is a Spanish restaurant in a college town. The owner expects that the number...
Carreras Café is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be 40 percent below those served in May, because so many students leave for the summer. In May, the restaurant served 4,200 meals at an average price of $20. In the summer (June through August), the average price of a meal typically increases by 30 percent and the average food cost of a meal increases by 15 percent....
Gilman's Café is a popular restaurant in a local tourist town. Sarah Gilman, who opened the restaurant five years ago, has seen it grow steadily. Currently, Gilman's is only open for dinner, but many of her regular customers have been asking Sarah to consider opening for lunch as well. Sarah has been talking to her accountant about the financial impact of the expanded services on the overall business. She knew that the café did not make much money and she...
12. The Johnson Buffet offers an all-you-can-eat buffet meal for $28 per person. The restaurant employs ten salaried employees. Rent for the building employee salaries, and other fixed costs for the restaurant are $67,500 per month when the restaurant serves meals up to 14,200 guests in that month. If the restaurant were to serve more than 14,200 guests in any given month, it would need to hire two additional servers and two additional kitchen staff for an additional fixed cost...
The Wholesome Buffet offers an all-you-can-eat buffet meal for $33 per person. The restaurant employs ten salaried employees. Rent for the building, employee salaries, and other fixed costs for the restaurant are $63,500 per month when the restaurant serves meals up to 13,900 guests in that month. If the restaurant were to serve more than 13,900 guests in any given month, it would need to hire two additional servers and two additional kitchen staff for an additional fixed cost of...
E4-19. Special Order Nature's Garden, a new restaurant situated on a busy highway in Pomona, California, specializes in a chef's salad selling for $7. Daily fixed costs are $1.200, and variable costs are S4 per meal. With capacity of 800 meals per day, the restaurant serves an average of 750 meals each day. Required a. Determine the current average cost per meal. b. A busload of 30 Girl Scouts stops on its way home from the San Bernardino National Forest....
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: Subscribers Service calls (per subscriber) March 1,250 0.6 April 1,350 0.9 May...
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $52. The a la carte option has a budgeted average price of $41 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $32 and the a...
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: Subscribers Service calls (per subscriber) March 600 0.6 April 700 0.9 May...
Nature's Garden, a new restaurant situated on a busy highway in Pomona, California, specializes in a chef's salad selling for $7. Daily fixed costs are $1,100, and variable costs are $4 per meal. With a capacity of 550 meals per day, the restaurant serves an average of 500 meals each day. (a.) Determine the current average cost per meal. Round your answer to two decimal places. (b.) A busload of 30 Girl Scouts stops on its way home from the...
Special Order Nature's Garden, a new restaurant situated on a busy highway in Pomona, California, specializes in a chef's salad selling for $7. Daily fixed costs are $2,000, and variable costs are $4 per meal. With a capacity of 1,650 meals per day, the restaurant serves an average of 1,600 meals each day. (a.) Determine the current average cost per meal. Round your answer to two decimal places. (b.) A busload of 30 Girl Scouts stops on its way home...