Fernando's is a tiny sandwich shop just off the State University campus. Customers enter and place their orders at a small counter area. All orders are take-out because there is no space for dining in.

The owner of Fernando's, Luis Azaria, is attempting to construct a series of budgets. He has accumulated the following information:

A.	The average sandwich (which sells for $4.50) requires 1 roll, 4 ounces of meat, 2 ounces of cheese, 0.05 head of lettuce, 0.25 of a tomato, and a healthy squirt (1 ounce) of secret sauce.
B.	Each customer typically orders one soft drink (average price $1.50) consisting of a cup and 12 ounces of soda. Refills are free, but this offer is seldom taken advantage of because the typical customer carries out his/her sandwich and soda.
C.	Use of paper supplies (napkins, bag, sandwich wrap, cups) averages $1,650 per month.
D.	Fernando's is open for two 4-hour shifts. The noon shift on Monday through Friday requires two workers earning $10 per hour. The evening shift is only worked on Friday, Saturday, and Sunday nights. The two evening shift employees also earn $10 per hour. There are 4.3 weeks in a month.
E.	Rent is $575 per month. Other monthly cash expenses average $1,800.

Food costs are:

Meat	$7.00/lb
Cheese	$6.00/lb
Lettuce (a box contains about 24 heads)	$12.00/box
Rolls	$28.80/gross
Tomatoes (a box contains about 20 tomatoes)	$4.00/box
Secret Sauce	$6.40/gallon
Soda (syrup and carbonated water)	$2.56/gallon

In a normal month when school is in session, Fernando's sells 5,000 sandwiches and 5,000 sodas. In October, State U holds its homecoming celebration. Luis figures that if he adds a noon shift on Saturday and Sunday of homecoming weekend, October sales will be 30% higher than normal. To advertise his noon shifts during homecoming weekend, Luis will buy cups emblazoned with the State U Homecoming schedule. This will add $200 to paper costs for the month. Last year, he added two additional shifts, and his sales goal was realized.

	Required:
1.	Prepare a flexible budget for a normal school month.
2.	Prepare a flexible budget for October.
3.	Conceptual Connection: Do you think it was worthwhile for Luis to add the additional shifts for homecoming weekend last October?

Amount Descriptions

Refer to the list below for the exact wording of an amount description within your budgets.

Amount Descriptions
Cost of goods sold
Direct labor
Flexible budget variance
Food
Indirect labor
Other
Paper
Rent
Sandwiches
Soda
Total costs
Total revenue 1. Prepare a flexible budget for a normal school month. (Note: Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.) 2. Prepare a flexible budget for October. (Note: Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

Score: 56/100 Ferando's Flexible Budget For A Normal School Month 1 Revenue: 4Total revenue 5 Variable food costs: Food 7 Soda 8Monthly costs: 9 Paper 10 Rent 11 Other 12 Direct labor 13 Total costs 575.00 1.800.00