"Wow!" I can't believe the size of the electricity bill this month," said Wendy. She was talking to Matt, the assistant manager of the Aussie Steakhouse in Phoenix, Arizona, where Wendy served as general manager.

"Is it higher than last month?" asked Matt.

"It's a lot higher," replied Wendy. "I thought it would be a little higher because it was really hot last month."

"So our usage was up?" asked Matt.

"Yes," said Wendy, "and the rate per kilowatt-hour we pay is up from last year, too. It seems like that rate goes up a little more every year."

"Is the bill so high it will affect our monthly bonus?" asked Matt. "I hope not," he continued, "because we had a great month last month, and I was really counting on the extra money in my next check."

"I don't know," said Wendy. "Let me get the calculator and we'll see."

1.What would be the likely effect on both the dollar amount and the cost of utilities as a percent of sales reported on the monthly P&L of the Aussie Steakhouse if there were:

a.An increase in the amount of electricity used in the restaurant?

b.An increase in the cost per unit (kilowatt-hour) of the electricity consumed?

c.An increase in the number of guests served by the restaurant?

2.In this scenario it appears that if the cost of other expenses in this restaurant is too high, its managers might not achieve their monthly bonus. Do you believe

the cost of electricity is a controllable or non-controllable operating expense?

3. Regardless of your answer to the previous question, what are at least three specific actions Wendy and Matt could take to address their rising electricity costs?