A small neighborhood restaurant is staffed by a hostess, five wait staff and fou
ID: 1213276 • Letter: A
Question
A small neighborhood restaurant is staffed by a hostess, five wait staff and four cooks. The hostess seats the guests and hands out the menu which takes 3 minutes. Then a waiter takes the orders and sends them to the kitchen which takes 5 minutes on average. It takes an average of 5 minutes before one of the cooks picks the order and starts preparing the meals. Once the cook starts the order, it takes an average of 15 minutes to prepare one customer order. When the meals are ready, the waiter brings the food to the table which takes 4 minutes. The waiter also brings the check and processes the payment which also takes 3 minutes.
a) Suppose the hostess is paid $12/hour, the wait staff are paid $8/hour each, and the cooks are paid $15/hour each. In addition, it costs the restaurant about 30% of the hourly labor rate for overhead. What is the average cost of labor and overhead per order for the restaurant if average demand is 13 customers per hour?
b) Assuming the same pay rates as in (a) above, what will be the average cost of labor and overhead per order for the restaurant when it operates at full capacity?
Explanation / Answer
a.
Cost data
Heads
Calculation
Amount
Hostess fee (A)
$12/hour
Waiter fee (B)
$8 × 5
$40/hour
Cook fee (C)
$15 × 4
$60/hour
Labor rate per hour
A + B + C
$112
Add: Overhead
$112 × 30%
$33.6
Labor and overhead cost
$145.6
Number of order
= Number of customer =
13
Average labor and overhead cost per order
$145.6 ÷ 13
$11.2
Heads
Calculation
Amount
Hostess fee (A)
$12/hour
Waiter fee (B)
$8 × 5
$40/hour
Cook fee (C)
$15 × 4
$60/hour
Labor rate per hour
A + B + C
$112
Add: Overhead
$112 × 30%
$33.6
Labor and overhead cost
$145.6
Number of order
= Number of customer =
13
Average labor and overhead cost per order
$145.6 ÷ 13
$11.2
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