Question

9. The Wheatfield Valley golf course has been owned by the Miley family for two generations. Currently, it is managed by Cyrus Miley, a graduate of State University, where he majored in hospitality management. Last year was a good one for the golf course. Now Cyrus is preparing next year's operating budget. He has gathered a great deal of information to help him prepare the best budget possible. After carefully analyzing that information, Cyrus predicts that next year the course will experience: A 5 percent increase in food sales A 3 percent increase in beverage sales No change in food or beverage product cost percentage Salaries and wages (management and staff) that will increase 4.5 percent Employee benefits that will increase 10 percent An increase of 2.5 percent in each Other Expense category No change in Occupancy Costs and Depreciation & Amortization Interest payments of $1,000 per month Tax payments that are estimated to be 25 percent of income before income taxes Calculate this year's operating percentages for the food and beverage department on the budget worksheet provided, and then using his assump- tions about next year, create Cyrus's new operating budget in dollars and percentages

Answer 1

The wheatfield Vally F&B Department Budget worksheet for Golf the Course next year This year Actual & Next year Badget & % to $173.250.00 75.39 $181.912.50 75.6 56,750 24.67 56 452.50 24.32 230,000.00 100 240,36500 1000 $58,25000 33:62 $ 61,158 98 33,62 9375.00 16.52 9656:35 16.52 67 62500 29:40 70815:33 294 $9,000.00 3.91 $ 9405.00 3.91 27. 250-10 11:85 28476.25 1-85 620000 2.69 6820.50 2.84 42,450.00 18.46 44,701:25 18.60 110,075.00 47.86 115 516.58 48.06 SALES: Food Beverage Total sales COST OF SALES Food Beverage Total Cost of sales LABOR Management Stuff Employee Benefits Total Labor PRIME COST OTHER CONTROLLABLE EXPENSES Ducet Operating Expenses utilitres Goneral & Administrative Expenses Repairs & Maintenance Total other controllable Expenses PONTROLLABLE INCOME NON - CONTRO/LABLE EXPENSES Occupancy Costs Egreepment Leases Depreciation & Amortization Total Non-Controllable Expenses ORANT OPERATING INCOME $13.200.60 5.74 5975.00 2.60 6375.00 2.77 1750:00 0.76 27300.00 11.87 $13.530.00 5.63 6124.37 2.55 6534,38 2.72 1793.75 0.75 27,982:50 11:64 $15.00'0D 6:52 $ 15.00 6.24 0' 0 00 420000 1.83 4200.00 1.75 19,200 8.35 19,260.06 7.99 73.425.00 31.92 77.665.92 39:31 RESTAURANT

RESTAURANT OPERATING INCOME $73.425.00 31.92 $77,665'92 32.31 Interest Expenses $12,000.00 5.22 $12,000 4.99 TOME BEFORE INCOME TAXES 61425.00 26.71 65,665.92 27.32 Income Tones $ 15,356.25 6.68 $ 16,416:48 6.83 NET INCOME 46,068.75 20.03 49249.44 20:49 Note: 1. Product cost percentage of this year: $ 58, 250 100 x 100 = 33.62% $9375.00 100. 16.52%. X / $173 250.00 Beverage : $56, 750'00 Except these two all the calculated on the basis of are percentages total Bales. encome tax & 25% -2. Income Tones & Net Encome before 2 $ 65 665.92 x 25% - $16,416.48