Zheng Chung is the managing owner of the Stillwater Grill. This year, 2010, was a good year

Question:

Zheng Chung is the managing owner of the Stillwater Grill. This year, 2010, was a good year for him. Now he is preparing his 2011 budget. Using the information Zheng believes will be true, help him complete the dollar and percentage amounts in the budget worksheet that follows, then answer the questions he has about next year.

Based upon his sales histories, sales projections, and cost records, Zheng predicts that in 2011 his operation will experience:

A 6% increase in food sales A 4% increase in beverage sales Salaries and wages that will increase 3.5%

Benefits that will increase 10%

An increase in all other operating expenses (except depreciation) of 2%

A depreciation schedule that calls for a $750 per month entry Interest payments for loans that will total $1,100 per month Tax payments that are estimated to be 25% of income before income taxes

No change in food or beverage product cost percentage THE STILLWATER GRILL BUDGET WORKSHEET FOR SEPTEMBER 2011 SALES:
Food Beverage Total Sales COST OF SALES:
Food Beverage Total Cost of Sales GROSS PROFIT:
Food Beverage Total Gross Profit OPERATING EXPENSES:
Salaries and Wages Employee Benefits Direct Operating Expenses Music and Entertainment Marketing Utility Services Repairs and Maintenance Administrative and General Occupancy Depreciation Total Operating Expenses Operating Income Interest income Before Income Taxes Income Taxes Net Income

a. What will be Zheng's total sales in 2011°

b. What will be Zheng’s total cost of sales income 2011?
2010 Actual 346,500 113,500 460,000 116,500 18,750 135,250 230,000 94,750 324,750 72,500 12,400 16,550 3,200 6,650 11,950 3,500 12,750 30,000 8,400 177,900 146,850 14,000 132,850 33,213 99,638 %
75.3%
24.7%
100.0%
33.6%
16.5%
29.4%
66.4%
83.5%
70.6%
15.8%
2.7%
3.6%
0.7%
1.4%
2.6%
0.8%
2.8%
6.5%
1.8%
38.7%
31.9%
3.0%
28.9%
7.2%
21.7%
2011 Budget %