The following information has been prepared by the manager of the Market Restaur
ID: 2693151 • Letter: T
Question
The following information has been prepared by the manager of the Market Restaurant. It represents his best estimates of sales and various costs for the coming year. Using this information, prepare an operating budget for the Market Restaurant for the coming year. Food sales: food sales: $820,000 Beverage sales: $290,000 Cost of food: 36 percent of food sales Cost of beverage: 24 percent of beverage sales Variable salaries and wages: 20 percent of total salaries and wages Fixed salaries and wages: $102,000 Employee benefit: 25 percent of total salaries and wages Other controllable expenses: $95,000 Depreciation: $65,500 Interest: $55,000 Occupancy costs: $56,000Explanation / Answer
Sales %Sales
Food 820,000 73.87%
Beverage 290,000 26.13%
Total Sales 1110000 100.0%
Cost of Sales
Food 295200 35.0% (of food)
Beverage 69600 24.0% (of beverage)
Total Cost of Sales 364800 32.86%
Gross Profit 745200 67.14%
Controllable Expenses
Salaries and Wages 222000 20.0%
Employee Benefits 277500 25.0%
Other Controllable Expenses 95000 8.56%
Total Controllable Expenses 594500 53.56%
In Bef Occupancy Costs 150700 13.58%
Interest, Depreciation, and Income Taxes
Occupancy Costs 56000 5.045%
Interest 55000 4.95%
Depreciation 65500 5.9%
Total 176500 15.0%
Restaurant Profit -25800 -2.324%
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