Chapter 10, Question 11
The Wheatfield Valley golf course has been owned by the Miley family for two generations. Currently, it is managed by Cyrus Miley, a graduate of State University, where he majored in hospitality management. Last year was a good one for the golf course. Now Cyrus is preparing next year's operating budget. He has gathered a great deal of information to help him prepare the best budget possible. After carefully analyzing that information, Cyrus predicts that next year the course will experience: A 5 percent increase in food sales A 3 percent increase in beverage sales No change in food or beverage product cost percentage Salaries and wages (management and staff) that will increase 4.5 percent Employee benefits that will increase 10 percent An increase of 2.5 percent in each Other Expense category No change in Occupancy Costs and Depreciation & Amortization Interest payments of $1,000 per month Tax payments that are estimated to be 25 percent of income before income taxes Calculate this year's operating percentages for the food and beverage department on the budget worksheet provided, and then using his assumptions about next year, create Cyrus's new operating budget in dollars and percentages.
The Wheatfield Valley Golf Course
F&B Department
Budget Worksheet for Next Year
	This Year Actual $	%	Next Year Budget $	%
SALES
Food	$173,250.00
Beverage	56,750.00
Total Sales
COST OF SALES
Food	$58,250.00
Beverages	9,375.00
Total Cost of Sales
LABOR
Management	$9,000.00
Staff	27,250.00
Employee Benefits	6,200.00
Total Labor
PRIME COST
OTHER CONTROLLABLE EXPENSES
Direct Operating Expenses	$13,200.00
Utilities	5,975.00
General & Administrative Expenses	6,375.00
Repairs & Maintenance	1,750.00
Total Other Controllable Expenses
CONTROLLABLE INCOME
NON-CONTROLLABLE EXPENSES
Occupancy Costs	$15,000.00
Equipment Leases	0.00
Depreciation & Amortization	4,200.00
Total Non-Controllable Expenses
RESTAURANT OPERATING INCOME
Interest Expense	$12,000.00
INCOME BEFORE INCOME TAXES
Income Taxes	0.00
NET INCOME