Gabriel Hinojosa owns Gabriels Tex-Mex Restaurant, an extremely popular, 250-seat establishment in a large California city. Gabriel has decided to offer a four-hour Sunday brunch buffet for his guests because he thinks he can achieve a guest count of 625 (21/2 turns). Last Sunday, June 1, he offered the buffet for the first time, and he charged $12.00 per guest. However, he only served 400 people. He believes he could attract more guests if he offered the buffet at a lower price. He collected information on last Sundays buffet product usage, and he used the ABC method to put his menu items into categories. His desired food cost percentage is 40 percent. Using the incomplete product usage report below, help him calculate important information.

(1) What is Gabriels total revenue on Sunday, June 1?

2) What is Gabriels total product cost?

(3) What is Gabriels cost per guest? (

4) After completing this analysis, what should be Gabriels selling price?

(5) If he uses this new selling price and he serves 625 guests next Sunday, June 8, will his total revenue increase? If so, by how much?

Unit Ending Amount Total Usage Total Cost Cost 6 $4.50 4.00 A 10 4 4.25 15 2.00 10 2.50 B 8 Buffet Product Usage (Sunday, June 1): Gabriel's Tex-Mex Restaurant Menu Item Beginning Category Unit Additions Amount Steak Fajitas A Ib. 20 60 Chicken Fajitas Ib. 15 70 Carne Asada A Ib. 10 50 Cheese Enchiladas B Ib. 2 80 Beef Enchiladas B Ib. 3 60 Enchiladas Verde Ib. 1 70 Chili Rellenos B Ib. 10 Tacos each 0 150 Bean Chalupas each 0 175 Tortilla Soup 2 10 Spanish Rice Ib. 5 70 Refried Beans Ib. 15 75 Sopapillas each 25 200 Total Product Cost 2.00 45 5 2.75 0.30 20 5 0.25 gal. 4 0.30 12 0.20 6 0.20 30 0.15 (2) Guests Served: 400 40% Desired Food Cost %: Desired Selling Price Based on Cost: Total Product Cost: Cost per Guest: (3) Revenues, 6/1: (1) Projected Revenues, 6/8: Difference: 5)