2. Tutti's Sandwich Shop has the following information regarding costs at various levels of monthly sales. Help Tutti separate her costs into fixed costs and variable costs so that she can predict and evaluate her costs at varying levels of guests served. January ($) February ($) March ($) Monthly Sales in Guests Served 10,000 16,000 20,000 Cost of Sales (Food Cost) 10,500 16,800 21,000 Salaries, Wages, and Benefits 15,000 15,600 16,000 Telephone 12,750 16,350 18,750 Rent on Building 2,400 2,400 2,400 Depreciation of Equipment 600 600 600 Utilities 1,000 1,300 1,500 Maintenance and Repairs 500 740 900 Administrative Costs 2,600 2,600 2,600 Item Cost of Sales (Food Cost) Salaries, Wages, and Benefits Telephone Rent on Building Depreciation on Equipment Utilities Maintenance and Repairs Administrative Costs Total $ Variable Cost per Guest $ Fixed Costs 0 14,000 6,750 500 a. Develop a total cost equation for Tutti that she can use at any volume of sales. Total Costs Fixed Costs + (Variable Cost per Guest x Number of Guests) Total Costs = x b. Determine if Tutti is controlling her costs in April as well as she did in January, February, and March. She sold sandwiches to 30,000 guests in April. Calculate her expected costs based on her actual number of guests. Expected costs based on the total cost equation: Total Costs= Fixed Costs + (Variable Cost per Guest x Number of Guests) 30,000 c. Her actual total costs in April were $81,500. Were her actual costs in April higher or lower than expected based on her total cost equation, and was this a favorable or unfavorable variance? Were actual costs higher or lower than expected? Were actual costs favorable or unfavorable? 3. Mark Chaplin is the manager of Carsen's Rib Joynt, a restaurant specializing in baby back ribs, but serving them in a very upscale atmosphere. Mark has nearly completed calculating his prime costs for the months of July, August, and September of this year. He is seeking to forecast his staff costs for the month of October. He knows the following information: Monthly Management costs Total benefits costs $42,000 20% Because his monthly management costs are fixed at $42,000 and his benefit costs are 20% of management and staffing expense, the cost of staff is the only labor-related cost he wants to estimate based on his forecasted volume. Complete Mark's prime cost recap sheet, answer the questions that follow, and then make the staff expense forecasts he needs to better predict his staff costs at the various number of guests served estimates he has identified. Carsen's Rib Joynt July August September NUMBER OF COVERS SALES Food 12,000 $302,500 Beverage $62,250 14,500 $410,500 $85,250 13,000 $350,750 $65,500 Total Sales COST OF SALES Food $105,875 Beverages $13,250 $143,650 $16,750 $122,750 $14,750 Total Cost of Sales LABOR Management (continued) Carsen's Rib Joynt (Continued) July August September Staff $127,000 $132,625 $130,000 Employee Benefits Total Labor PRIME COST $ (a) What is the operation's variable "staff" cost per guest? $ (b) What was the operation's total variable "staff" cost in July? (c) What is the fixed portion of "staff" costs? $ $ $ d. What will be the operation's total "staff" cost if the following numbers of guests are estimated to be served in October? Estimated Number of Guests Served Fixed Staff Costs ($) Variable Staff Costs ($) Total (Mixed) Staff Cost ($) 13,250 13,500 13,750 14,000 4. Betty Stout is the dining room manager at the Fairview hotel. Betty's restaurant is very busy when the 520-room hotel housing her restaurant experiences high levels of occupancy, but it is slower when the hotel's occupancy is reduced. From past history, Betty knows that service in her dining room is best when she schedules one server for every 50 rooms occupied. Thus, for example, on a Friday night when the hotel sells 380 rooms, Betty must schedule eight servers for Saturday morning (380 rooms sold/50 servers per room -7.6 servers). Each server scheduled by Betty will work a 6-hour shift and they are paid $17.00 per hour. Betty has just received next week's occupancy forecast from the hotel's director of sales (DOS). Help Betty complete her breakfast staffing worksheet to determine how many breakfast servers she must schedule each day next week, and then answer the questions that follow. Betty's Breakfast Server Worksheet Date Day of Week Rooms Available Occupancy Forecast (%) Number of Number of Servers per Servers Forecast Scheduled Server Server Cost per Occupied Cost ($) Room ($) 20-Oct Sunday 520 35.5 21-Oct Monday 520 60.0 22-Oct Tuesday 520 62.5 23-Oct Wednesday 520 68.0 24-Oct Thursday 520 86.5 25-Oct Friday 520 95.0 26-Oct Saturday 520 91.5 27-Oct Sunday 520 N/A Total (Spreadsheet hint: Use the ROUNDUP function for Number of Servers Scheduled.) a. On what day(s) will Betty schedule the fewest number of breakfast servers? b. On what day(s) will Betty schedule the greatest number of breakfast servers? c. On what day(s) will Betty's total cost of breakfast server staff be lowest? d. On what day(s) will Betty's total cost of breakfast server staff be highest? e. What will be Betty's estimated total breakfast server expense for the week? f. On what day will Betty's server cost per occupied room be lowest? g. On what day will Betty's server cost per occupied room be highest? h. Why is your answer to question (f) different from your answer to question (g) above? i. Can Betty sum the seven individual days "server cost per occupied room" then divide by seven to get her average server cost per occupied room (CPOR) for the week? Why or why not?