Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A financial feasibility study is being carried out for a proposed new 120-seat seat restaurant. It will be open for both lunch and dinner from

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

Turnover Average Food Check

Weekday Lunch 1.50 $5.60

Weekday Dinner 1.25 $10.50

Sunday Dinner 1.75 $13.00

In addition, the restaurant has a small banquet room, and food sales revenue enue 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 enue 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 ployees 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 tal 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

.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Practice Of Modern Internal Auditing

Authors: Lawrence B Sawyer

2nd Edition

0894130927, 978-0894130922

More Books

Students also viewed these Accounting questions

Question

Explain the differences between capacity, flow rate, and demand.

Answered: 1 week ago

Question

Would you prefer to overdiagnose or underdiagnose?

Answered: 1 week ago

Question

scnr cannot be resolved java

Answered: 1 week ago