ROUNF TO 2 DECIMAL PLACES AND SHOW WORK CALCULATIONS

1. The Wheatfield Valley golf course has been owned by the Miley family for two generations. Currently it is managed by Cyrus Miley, a hospitality management graduate. Last year was a good one for the golf course. Now Cyrus is preparing next years operating budget. He has gathered a great deal of information to help him prepare the best budget possible. After carefully analyzing that information, Cyrus predicts that next year the course will experience:

• A 5% increase in food sales
• A 3% increase in beverage sales
• No change in food or beverage cost %
• Salaries and wages (management and staff) will increase 4.5%
• Employee benefits will increase 10%
• Other Expense category will increase 2.5%
• No change in occupancy costs and depreciation & amortization
• Interest payments of $1000 per month
• Tax payments that are estimated to be 2.5% of income before income taxes

Calculate this years operating percentages for the food and beverage department on the budget worksheet provided, then using the assumptions for next year, fill in the last two columns for the new operating budget in dollars and percentages (5 points).

The Wheatfield Valley Golf Course
F&B Department
Budget Worksheet for Next Year
	This Year Actual $	%	Next Year Budget $	%
Sales
Food	$169,250.00
Beverage	$55,750.00
Total sales
Cost of Sales
Food	58,250.00
Beverages	9,375.00
Total cost of sales
Labor
Management	9,000.00
Staff	27,250.00
Employee benefits	6,200.00
Total labor
Prime Cost
Other Controllable Expenses
Direct operating expenses	13,200.00
Utilities	5,975.00
General & administrative expenses	6,375.00
Repairs & maintenance	1,750.00
Total Other Controllable Expenses
Controllable Income
Non-controllable expenses
Occupancy costs	15,000.00
Equipment leases	0.00		0.00
Depreciation & amortization	4,200.00		4,200.00
Total Non-Controllable Expenses
Restaurant Operating Income
Interest expense	12,000.00
Income Before Income Taxes
Income taxes	$14,106.25
Net Income