In the previous year, the manager of the Pacific Restaurant had been following the operating budget shown in column 1 of the worksheet below. For the upcoming year, the following changes are expected:

• Food sales will increase by 10 percent.
• Beverage sales will increase by 6 percent.
• Food cost percent and beverage cost percent will remain the same.
• Fixed salaries and wages$69,300 for this yearwill increase by $8,000.
• Variable salaries and wages will be 16 percent of expected food sales.
• Employee benefits will remain the same percentage of salaries and wages.
• Controllable expenses will increase by $12,000.
• Occupancy costs will increase by $5,000.
• Interest and depreciation will remain the same.

Given these anticipated changes, prepare an operating budget for the Pacific Restaurant for the upcoming year, using the budget worksheet below:

Budget Worksheet

Sales	Previous Year $	Change $	Upcoming year $
Food	630,000
Beverage	140,000
Total sales	770,000
Cost of Sales
Food	252,000
Beverages	35,000
Total costs	287,000
Gross Profit	483,000
Controllable Expenses
Total salaries and wages	173,250
Employee benefits	45,045
Other controllable expenses	82,000
Total Controllable Expenses	300,295
Income before Occupancy Costs, Interest, Depreciation, and Income Taxes	182,705
Occupancy Costs	64,000
Income before Interest, Depreciation, and Income Taxes	118,705
Interest	10,000
Depreciation	28,500
Total Interest & Depreciation	38,500
Restaurant Profit	80,205