1. INCREASE BUDGET

2. DECREASE BUDGET

COMPLETE INCREASE AND DECREASE FOOD INCOME STATEMENTS

You own a restaurant that had the following results in the past year. The economy is growing at a rate of 5%. The local Colleges and hospitals are growing. We are expecting a long dry summer next year. Please Name your restaurant, state some brief outlines on its concept. You can assume the one in class. Then fill out the grey areas on the budget. On the grey areas of the budget, you need to fill out what you think the budget would be and what your numbers and percent totals would be in relation to that variable. Percent Dollars Dollars 1,013,600 386,400 1,400,000 MGMT Goals % 72.4% 71.0% 27.6% 29.0% 100.0% Grow 5% Sales Food Beverage Total Sales Cost of Sales Food Cost Beverage Cost Cost of Goods Sold Gross Profit 331,447 85,394 32.7% 22.1% 29.8% 32.0% 20.0% 416,841 983,159 70.2% Keep our strong focus on food but grow beverage so it outpaces revenue growth on beverages. Need to grow beverages so we can increase our gross margin. 403,200 96,600 Labour Salaries & Wages Employee Benefits Total Labour Costs Prime Cost Controllable Expenses Direct Operating Expenses 28.8% 6.9% 35.7% 65.5% 499,800 916,641 70,000 5.0% Music & Entertainment Marketing Utilities General & Administrative Repairs & Maintenance Total Controllable Expenses Income Before Fixed Costs 11,200 32,200 63,000 37,800 7,000 0.8% 2.3% 4.5% 2.7% 0.5% 15.8% 18.7% 221,200 262,159 Fixed Costs Occupancy Costs Interest Depreciation Total Fixed Costs Net Income 140,000 65,000 21,000 10.0% 4.6% 1.5% 16.1% 2.6% 226,000 36,159 Sales Dollars Percent MGMT Goals Dollars Why are you budgeting this? What actions will you take (i.e. Do a food giveaway promo, cut heat, hire a band.) Food is going to decline on sales, but we are going to look at capturing more sales from residents. Although we will decline will not be as bad. Going to try and keep this on pace as lots of our beverage sales are to be people who live nearby. Food 1,013,600 72.4% 67.0% 386,400 27.6% 33.0% 100.0% decline 11.2% 1,400,000 Beverage Total Sales Cost of Sales Food Cost Beverage Cost Cost of Goods Sold Gross Profit 32.0% 331,447 85,394 20.0% 32.7% 22.1% 29.8% 70.2% 416,841 983,159 403,200 96,600 28.8% 6.9% 35.7% 65.5% 499,800 916,641 Labour Salaries & Wages Employee Benefits Total Labour Costs Prime Cost Controllable Expenses Direct Operating Expenses Music & Entertainment Marketing Utilities 70,000 11,200 32,200 63,000 5.0% 0.8% 2.3% 4.5% 37,800 7,000 General & Administrative Repairs & Maintenance Total Controllable Expenses Income Before Fixed Costs 2.7% 0.5% 15.8% 18.7% 221,200 262,159 Fixed Costs Occupancy Costs Interest Depreciation Total Fixed Costs Net Income 140,000 65,000 21,000 10.0% 4.6% 1.5% 16.1% 2.6% 226,000 36,159