Question

2. Roscco Burnett is the manager of a New York-style delicatessen. Roscco's boss has established performance targets that determine the amount of bonus Roscco will receive each month. Roscco's performance is evaluated in five separate categories. Roscco receives a 2% bonus for each of the five targets he achieves. He earns a 2% bonus when: A. His food cost is 30% or less. B. His total cost of sales is 31% or less. C. His labor cost is 22% or less for the "Staff" category. D. His total labor cost is 35% or less. E. His prime costs are less than 63%. If he achieves all five of his targets, the maximum bonus Roscco can achieve is 10% of his monthly salary. Review the targets established for Roscco's performance, complete Roscco's P&L Sales and Prime Cost sections, and then answer the question that follows. Roscco's P&L Sales and Prime Cost This Month % $71,500 9,250 $22,250 2,200 SALES Food Beverage Total Sales COST OF SALES Food Beverage Total Cost of Sales LABOR Management Staff Employee Benefits Total Labor Cost PRIME COST $4,750 16,252 6,225 (1) What is Roscco's food sales percentage and beverage sales percentage? (2 points) (2) What is Roscco's Food cost percentage and Beverage cost percentage? (2 points) (3) What is Roscco's labor cost percentage? (2 points) (4) What is Roscco's prime cost percentage? (2 points) (5) of the five targets, which target(s) did Roscco achieved? What percent of his monthly salary will Roscco receive as a bonus this month? (2 points)

SHOW YOUR WORK. FOR PERCENTAGES ROUND TO THE NEAREST TENTHS. FOR DOLLAR AMOUNTS AND DECIMALS ROUND TO THE NEAREST HUNDRETHS

Answer 1

(1) Food sale percentage ;

Sale of food = 71,500

Total sale = 80,750

So Food cost percentage = 71,500/80,750*100 = 88.5%

Beverage sale percentage ;

​​​​​ Beverage sale - 9,250

Total Sale - 80,750

So, Beverage sale percentage = 9,250/80,750*100 = 11.5%

(2) Food cost percentage ;

Cost of food - 22,250

Sale of food - 71,500

So, Food cost percentage = 22,250/71,500*100 = 31%

Beverage cost percentage;

Cost of beverage - 2,200

Sale of beverage - 9,250

So, Beverage cost percentage = 2,200/9,250*100 = 24%

(3) Labour cost percentage ;

Total labour cost - 27,227

Total sales - 80,750

Labour cost percentage = 27,227/80,750*100 =34%

(4) Prime cost percentage ;

Prime cost - 29,073

Total sales - 80,750

Prime cost percentage = 29,073/80,750*100 = 36%

(5) Bonus eligibility ;

Target	Eligibility
A	Eligible
B	Eligible
C	Eligible
D	Eligible
E	Eligible

Note - Assumed that target is established on total sales.

Roscco achieved all 5 targets . So, he is eligble for 10% of monthly salary.

Workings :

Roscco's P&L Sales and Prime cost

	This Month	% on sales
SALES
Food	$71,500	89%
Beverage	9,250	11%
Total Sales(A)	80,750	100%
COST OF SALES
Food	$22,250	28%
Beverage	2,200	3%
Total Cost of Sales(B)	24,450	30%
LABOUR
Management	$4,750	6%
Staff	16,252	20%
Employee Benefits	6,225	8%
Total Labour Cost (C)	27,227	34%
PRIME COST (A-B-C)	29,073	36%