1. Rosa manages a fine-dining steakhouse in Chicago. She has had very high turnover with her hourly employees over the past several months because they say that she isnt paying competitive wages. Many are threatening to leave unless they get a raise.

She has determined that she can still remain competitive if she raises the hourly rate from $8/hr to $8.50/hr, an increase of 6.25%. Rosas current labor cost is 35%, and she feels as though 38% is the highest labor cost ratio she can maintain and still make a profit.

Help Rosa calculate the effect of a 6.25% increase in wages.

1. Can she give the employees what they want and still make a profit?

Week	Original Cost of Labor	Raise in Dollars	Total Cost of Labor	Sales	Labor Cost %
1	$10,650			$27,600
2	12,075			35,250
3	10,887			28,560
4	10,838			37,200
Total