& Laurie Llamos manages a Mexican restaurant in a rural Texas town. She wants to develop a comparative (horizontal) income statement so that she can compare the differences in her revenues, expenses, and profits from this year to last year. SALES Food Beverage Total Sales COST OF SALES Food Beverages Total Cost of Sales LABOR Management Staff Employee Benefits Total Labor PRIME COST OTHER CONTROLLABLE EXPENSES Direct Operating Expenses Music & Entertainment Marketing Utilities Administrative & General Expenses Repairs & Maintenance Total Other Controllable Expenses CONTROLLABLE INCOME Last Year (5) 3,025,618 622,649 997,622 132,370 269,262 628,277 138,828 171,114 3,228 61,342 103,314 93,628 48,429 This Year (5) 3,499,239 772,528 1,151,165 144,849 299,913 771,206 167,720 198,215 11,436 95,295 133,413 106,731 53,366 $ Variance % NON-CONTROLLABLE EXPENSES Occupancy Costs Equipment Leases Depreciation & Amortization Total Non-Controllable Expenses RESTAURANT OPERATING INCOME Interest Expense INCOME BEFORE INCOME TAXES Income Taxes NET INCOME 168,000 0 121,450 261,315 180,000 83,861 127,334 313,850 (1) Complete the above comparative Income statement following the USAR format. (10 points) (2) Laurie's goal was to increase her total sales by 15%. Did she achieve this goal? (2 points) (3) One of Laurie's plans to increase traffic into her restaurant and thus increase her sales was to hire a mariachi band to play at regular intervals during the meal service. This affected her music and entertainment expense. What was the percentage difference in music and entertainment expense? Do you think this had a positive or negative effect on sales? (4 points) (4) Laurie also wanted to increase her net income by 10%. Did she achieve this goal? (2 points)