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For this Discussion, read the following scenario: During the pandemic that started in 2020, an owner and chef of a fine dining restaurant is finally

For this Discussion, read the following scenario:

During the pandemic that started in 2020, an owner and chef of a fine dining restaurant is finally able to re-open. The restaurant, Francescos Ristorante, named after its owner, is on the brink of bankruptcy. Francesco is desperately trying to determine how his restaurant can stay alive until the pandemic is over. New rules are limiting the number of people he can have seated at one table and the number of people in total allowed in the restaurant at one time. He is especially exasperated because the rules reduce and limit his revenue but there is no limit on how much landlords can charge. Rent, which is one of the restaurants highest monthly costs, is the same as before the pandemic.

Francesco is trying to design a floor plan to maximize the number of patrons the restaurant can serve and staying within the rules. He feels that if he knew his costs he would be able to calculate the number of meals required to not lose money and potentially even make a profit. This would help him determine how many tables and chairs would be required in his design. Francesco starts by making a list of the restaurants costs. Here is the list:

  • Rent
  • Electricity, water, gas
  • Food stock for meals such as meats, vegetables, pasta, spices, and desserts; Drinks and alcohol
  • Salaries for a manager and himself and hourly wages for cooks and servers
  • Food that had to be thrown out when the restaurant was forced to shut down
  • Masks for staff and for patrons that show up without masks
  • Extra cleaning supplies

Francesco starts adding up all the costs and struggles to determine how he can use this total to help him design the layout of the restaurant and run operations. Unfortunately, Francesco has lost contact with his accountant. A friend of yours, who knows Francesco, asks you to help and you agree to share your expertise.

For Discussion

  1. Describe the different types of costs to Francesco as they relate to his restaurant and his list of costs.
  2. Other than costs identify at least two other pieces of financial information that will be help Francesco plan his re-opening.

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