A financial feasibility study is being carried out for a proposed new 120-

seat restaurant. It will be open for both lunch and dinner from Monday through Saturday and for dinner only on Sunday. For the sake of simplicity, assume a 52-week year. Seat turnover and average food check figures are estimated as follows:

In addition, the restaurant has a small banquet room, and food sales revenue in this area is estimated at $14,000 a month. Alcoholic beverage revenue is estimated to be 12% of lunch food sales revenue and 30%
of all food sales revenue. In the banquet room, alcoholic beverage revenue is forecast to be 40% of food sales revenue in that area. Food cost is estimated at 40% of total food sales revenue, and beverage cost is 28% of total beverage sales revenue.
Wage cost for salaried personnel (manager, chef, hostess, head server, and cashier) is estimated at $300,000 per year. Wages for all other employees will be 15% of total annual restaurant sales revenue.
Employee benefits (vacations, meals, etc.) are estimated to be 10%
of total annual wages. Other operating costs are estimated at 12% of total annual wages and salaries. Undistributed costs are forecast to be $130,000 per year.
Prepare the restaurant’s pro forma income statement for the first year.
Ignore income tax.LO1

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Turnover Average Food Check Weekday lunch Weekday dinner Sunday dinner 1.50 $ 5.60 1.25 $10.50 1.75 $13.00