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Question 2 You are the accountant for Bellyful Restaurant. Following are assumptions about sales for the coming month. . Bellyful Restaurant offers three basic meals:

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Question 2 You are the accountant for Bellyful Restaurant. Following are assumptions about sales for the coming month. . Bellyful Restaurant offers three basic meals: noodle bowls, egg rolls, and rice bowls. Each meal can be prepared with several different meats or with vegetables only. Costs and prices are similar for all varieties of each meal. Prices for noodles bowls are $4 each, egg rolls are $3 each, and rice bowls are $3.50 each. Estimated sales for the next month are 200 noodle bowls, 100 egg roll meals, and 500 rice bowls per day. PART 1: Revenues budget Required: (a) Prepare a revenue budget for the next month assuming it is 30 days long. (3 marks) (b) Discuss two (2) factors that affect the budgeted volumes of meals. (2 marks) PART 2: Direct materials budget The owner of Bellyful Restaurant studied the cost of direct materials for each type of meal. He estimates that noodle bowls use about $1 in direct materials, egg rolls use about $0.75, and rice bowls use about $0.90. Food is purchased daily to ensure high quality. Beginning and ending inventory amounts are minimal. Required: (a) Prepare a direct materials usage budget and a direct materials purchases budget. (4 marks) (b) Discuss reasons why actual costs might be different from budgeted costs in part (b). (2 marks) Suppose the prices of food ingredients increase. Identify possible ways the owner could keep food costs within the budget. Discuss drawbacks for each of your ideas. (2 marks) (c)

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