Resoulución de problemas 1, 2 y 3

PROBLEM 1
a) What is the initial budgeted profit (before tax) being planned by the Spartanland restaurant for the current year, given the following information?

• 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

b) The owner does not approve of the initial budget. Working together, the owner and manager believe they can accomplish the following:

• Implement marketing plans to increase the number of guests consuming food by an additional 12,000 (guest check average = $22.50)
• Increase beverage revenues by 8% over initial estimates
• Decrease food costs to 30%
• Decrease beverage costs to 20%
• Decrease payroll costs to 32% (but benefits costs will increase by 6% over the initial budget because of new payroll taxes not included in the original budget).
• Decrease operating expenses to 12% of total revenue
(Fixed costs will remain at the same dollar amount as in the original budget)

c) What is the revised estimate of budgeted profit before tax?

Answer a)
Total revenue: $ 1’110,000
Food cost : $ 302,250
Beverage cost: $ 29,700
Labor cost/ (payroll) $ 377,400
Employee benefits $ 67,932
Operating expenses $ 155,400
Fixed cost $ 88,800
Profit before taxes $ 88,518

• Implement marketing plans to increase the number of guests consuming food by an additional 12,000 (guest check average = $22.50)
• 12,000 X $22.50 = $270,000  inremento en food revenue
• Increase beverage revenues by 8% over initial estimates
• 135,000 X 0.08% = $10,800  incremento en beverage revenue
• $1’110,000 + $270,000 + $10,800 = 1’390,800  new total revenue
• Decrease food costs to 30%
• $975,000 + $270,000 = 1’245,000
• $1’245,000 X 30% = $373,500
• Decrease beverage costs to 20%
• 135,000 + 10,800 = $145,800  new beverage revenue
• $145,800 X 20% = $29,160
• Decrease payroll costs to 32% (but benefits costs will increase by 6% over the initial budget because of new payroll taxes not included in the original budget).
• $1,390,800 X 32% = $ 445,056
• employee benefits = $377,400 X 24% = $90,576
• Decrease operating expenses to 12% of total revenue
• $1,390,800 X 12% = $166,896
• Fixed costs will remain at the same dollar amount as in the original budget
• 88,800

Answer b)
Total revenue: $ 1,390,800

Food cost : $ 373,500
Beverage cost: $ 29,160
Labor cost/ (payroll) $ 445,056
Employee benefits $ 90,576
Operating expenses $ 166,896
Fixed cost $ 88,800
TOTAL EXPENSES $ 1’193,988

TOTAL REVENUE – TOTAL EXPENSES = PROFIT BEFORE TAXES
$ 1,390,800 - 1’193,988 = $196,812

PROFIT BEFORE TAXES – 15% TAXES: $ 167,290.2

PROBLEM 2

The manager of the Spartland restaurant is developing the operating budget for next year using the following financial information from the current year:

Item Current year’s Amount Next year’s percentage increase (Decrease) Next Year’s Amount
Food revenue $973,000 4% 38,920 $ 1,011,920
Beverage revenue $112,500 2% 2,250 $ 114,750
Food cost 36% $350,280 1% 3,502.8 $ 353,782.8
Beverage cost 23% $25,875 (1%) 258.75 $ 25,616.25
Labor (including benefits) $298,000 (2%) 5,960 $ 292,040
Other operating costs 16% $173,680 Same $ 173,680
Fixed costs $70,000 Same $ 70,000

a) what is the current year’s budgeted profit (loss)
Current year’s budgeted profit = $167,665
Total revenue = $1,085,500
Total cost = $917,835

b) Develop next year’s budget: indicate the profit (loss)
Total revenue = $1,126,670
Total cost = $915,119.05
Profit Before Taxes = $211,550.95


PROBLEM 3

Assume the approved food operations budget for the Hilotown Restaurant for 20X1 is as follows:
$ % OF REVENUE
Food revenue 1,400,000 100
Food cost 434,000 31
Payroll 364,000 26
Payroll taxes/ benefits 42,000 3
Direct operating expenses 112,000 8
Entertainment 14,000 1
Advertising 42,000 3
Utilities 70,000 5
Administrative/ general 56,000 4
Repairs/ maintenance 14,000 1
Real estate/ property taxes 70,000 5
Rent 28,000 2
Insurance 14,000 1
Interest expense 42,000 3
Depreciation 28,000 2
Income (profit) before taxes 70,000 5

Unforeseen problems beyond the control of the owner (ongoing terrorism alerts that have significantly reduced the tourist travel on which the restaurant relies) have caused a substantial reduction in revenue. In June (the restaurant operates on a calendar year [January-December] budget), the owner reforecasted revenues down to $1,100,000.

a) What will be the fixed costs under the new budget?
$182,000 the same as the original budget

b) Assuming the owner wants to maintain the original “bottom line” profit (income [profit] before taxes) of $70,000, how much in revenues will remain to be spent on variable costs?
Total revenue ($1,100,000) – Total fixed costs ($182,000) -- Profit before taxes (70,000) = Total variable cost ($858,000)

c) Assuming the owner is willing to break even on the restaurant’s operation, how much in revenues will remain to be spent on variable costs?
Net income (70,000) = Total revenues (1,110,000) -- Total variable costs (858,000) – Total fixed costs (182,000)