. . Revenue (food) $975,000 Revenue (beverage) $135,000 Food cost -31% of food revenue Beverage cost -22% of beverage revenue Labor cost (payroll) -34% of total revenue Employee benefits - 18% of labor cost (payroll) Other operating expenses - 14% of total revenue All fixed costs - 8% of total revenue Assume the ap . lows: . Food Food 32 Operations Budgeting and Cost-Volume-Profit Analysis b. The owner does not approve of the initial budget. Working together, the Implement marketing plans to increase the number of guests consuming Decrease payroll costs to 32% (but benefit costs will increase by 67 ore budget because of new payroll taxes not included in the original budget (Fixed costs will remain at the same dollar amount as in the original budget) manager believe they can accomplish the following: (guest check average = $ Increase beverage revenues by 8% over initial estimates . Decrease food costs to 30% . Decrease beverage costs to 20% Decrease operating expenses to 12% of total revenue Payre Direc Enter Adve Uuti Adr Rep Rer Red Ins Int DO In Unforese nificantl reductic Decemt c. What is the revised estimate of budgeted profit before tax? a. W b. A Problem 2 a The manager of the Spartanland Restaurant is developing the operating budget the net year using the following financial information from the current year: c. Current Year's Amount Next Year's Percentage Next You Increase (Decrease) Item Amounts The Food revenue $973,000 4% Beverage revenue $112,500 2% Food cost 36% 1% Beverage cost 23% (1%) Labor (including benefits) $298,000 (2%) Other operating costs 16% Fixed costs $70,000 a. What is the current year's budgeted profit (loss)? b. Develop next year's budget: indicate the profit (loss). same same