The owner does not approve the budget in question (1). The owner believes he can accomplish the following:
• Increase food revenue by increasing the number of guests consuming food by an additional 12,000 guests, with guest check average being $22.50
• Increase beverage revenues by8%
• Make food costs 30% from new food revenue
• Make beverage costs 20% from the new beverage revenue
• Make payroll costs 32% from the new revenue, but benefit costs will increase by6% over the initial amount (shown in question 1).
• Make other operating expenses 12% of new total revenue
• Fixed costs will remain at the samedollaramount as in the original budget in question 1
Question: What is the revised estimate of budgeted profit before tax?
USE THIS WORKSHEET TO CALCULATE REVISED PROFIT:
Revenue:
Food (original) $ _______
Additional food $ _______
New Food Revenue$ _______
Beverage (original) $ _______
Additional beverage 8% increase $ _______
New Beverage Revenue $ _______
New Total Revenue:$ _______
New Food Costs $ _______
New Beverage Costs $ _______
New Total Cost of Goods Sold$ _______
New Operating expenses:
New Payroll $ _______
New Benefits $ _______
New Other operating expenses $ _______
Total new operating expenses $ _______
Fixed costs $ _______
New Total costs$ _______
New Profit before Taxes $ _______
please give full explanation.
course : Cost control
