Marie estimates that at the special price she will serve about 300 pizzas per

# Marie estimates that at the special price she will

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- Marie estimates that at the special price she will serve about 300 pizzas per week to about 250 customers (some customers will eat more than one pizza, given the lower price). - She also anticipates that variable cost per pizza will increase about 10% , because people will want more toppings. - Beverage sales will bear the same relationship to the number of customers that they do now when each customer eats one pizza. - The increase in the number of customers will require an increase in service staff during the special hours. Thus, wage costs will increase by 20% . Required: Evaluate the monetary effects of this lunch special plan. Pizza Beverage Total Sales 250guests*\$5=\$1,250 \$250 \$1,500 VC 450 /150*(1+10%)*300p=990 \$60/150g*250g=100 \$1,090 CM 260 150 \$410 Avoidable fixed costs – part-time wages 380 *(1+20%)=456 =Current Loss ( lunch hours) -46 Problem 3: The general manager of the Lakeview Restaurant has asked for your assistance on preparing the monthly budget for January 20X1. The following is expected 20X1, sales increase by 10% fixed costs increase by 5% The prior January actuals are as follows: Sales \$100,400 Expenses : Labor (F) 12,000 Labor (V) 18,000 Cost of Sales (V) 36,000 Supplies (V) 3,200 Energy (V) 2,620 Promotion (V) 1,300 Maintenance (F) 2,000
Maintenance (V) 1,200 Property Taxes (F) 800 Depreciation (F) 1,000 Rent (F) 850 Insurance (F) 625 Total Expenses 79,595 Net Income 20,805 Required: Prepare the budget for January 20X1. Sales \$100,400*1.1=\$110,440 Expenses : Labor (F) 12,000 Labor (V) 18,000 18,000/100,400*110,440=19,800 10% increase Cost of Sales (V) 36,000 39,600 Supplies (V) 3,200 3,520 Energy (V) 2,620 2,882 Promotion (V) 1,300 1,430 Maintenance (F) 2,000 Maintenance (V) 1,200 1,320 Property Taxes (F) 800 Depreciation (F) 1,000 Rent (F) 850 Insurance (F) 625 Total Fix cost 18,138.75 Total Expenses 86,690.75 Net Income 23,749.25 (12,000+2,000+800+1,000+850+625)*1.05=18,138.75

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• Spring '20
• Revenue, general manager