Question 1: Susie operates restaurant in the ski resort town of Asvail.

Place an X in

the variable expense column for those expenses that vary with sales. For expenses that do not vary with sales, place an X in the fixed expenses column.

Other Expenses Linen rental Piano rental Ice Insurance Pension plan payments Snow shoveling fees (parking lot) Paper products Kitchen equipment lease (mixer) Long-term debt payment Real estate tax

Variable Expense x x x

Fixed Expense

x x x x x x x

Question 2: Tutti owns a fine dining restaurant in a suburb of a major coastal city.

Calculate Tuttis sales consultant cost %.

Mixed Expense - Sales Consultant Month January February March April May June 6-Month Average Sales $81,000 80,000 88,000 92,000 110,000 108,000 559,000 Fixed Fee $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 1% Variable Expense $810 800 880 920 1,100 1,080 932 For period: 1/1 to 6/30 Total Expense $1,810 1,800 1,880 1,920 2,100 2,080 1,932 Cost % 2.23% 2.25% 2.14% 2.09% 1.91% 1.93% 2.07%

a. Tutti has decided that she cannot spend more than 2.2% of total sales for Tinas services. Based on the six-month average cost %, can Tutti afford to hire Tina for another six months? Answer: No, Tutti cannot hire for another six months. b. Last years average sales for the first six months was $80,000. Based on the sales data, did Tina do a good job at increasing sales? Answer: Yes, Tina has increased the sales.

Question 3: John owns and operates the End Zone Steakhouse. Place an X in the

controllable column for those operating expenses that Zeke could control. If he could not control the cost, place an X in the non-controllable column.
Other Expenses Real estate tax Menu printing Professional musicians Interest on long-term debt Charitable donations Cleaning supplies Flowers and decorations Licenses and permits Controllable x x x x x x x Noncontrollable x

Question 4: Shanna operates a lounge in an extremely popular downtown convention

hotel.
Expense % and Cost Per Guest Served - Bands Unit Name:Luigi's Lounge Number of Guests Served 1,425 Cost per Guest Served $0.98

Date 1/1

Band Tiny and the Boys

Band Expense $1,400

Lounge Sales $11,400

Cost % 12.3%

2/1 3/1 4/1

Shakin' Bill and the Billfolds La Noise The Hoppers

1,900 2,000 2,000

12,250 12,000 10,250

15.5% 16.7% 19.5%

1,980 2,005 2,100

$0.96 $1.00 $0.95

a. Compute both band expense percent and cost per guest served. Based on the cost % of the bands, which one should Shanna select for booking? Answer: Shanna should select the Hoopers. b. Would your answer change if you knew Shanna charged a $5 cover charge.
Number of Guests Served 1,425 1,980 2,005 2,100 Cover Charge Total per Cover Guest Charges $5.00 $5.00 $5.00 $5.00 $7,125 $9,900 $10,025 $10,500

Date 1/1 2/1 3/1 4/1

Band Tiny and the Boys Shakin' Bill and the Billfolds La Noise The Hoppers

Lounge Sales $11,400 $12,250 $12,000 $10,250

Total Sales $18,525 $22,150 $22,025 $20,750

No, because cost per guest will remain the same.

Question 5: Marjorie runs a 200-seat, white-tablecloth restaurant in an upscale

neighbourhood. Help her complete the six column cost per guest report. She has budgeted $0.60 per guest on average. How is she doing at controlling her costs?
Six-Column Cost per Guest - Laundry Service Unit Name: Marjorie's Number of Guests Served Today Date: 5/1 - 5/7

Weekday

Laundry Service Cost Today

To

To

Cost Per Guest Today

To Date

Date 1 2 3 4 5 6 7 Total $225 $204 $200 $240 $275 $300 $230 $1,674 $225 $429 $629 $869 $1,144 $1,444 $1,674 400 375 350 425 450 500 420 2,920

Date 400 775 1,125 1,550 2,000 2,500 2,920 $0.56 $0.54 $0.57 $0.56 $0.61 $0.60 $0.55 $0.57 $0.56 $0.55 $0.56 $0.56 $0.57 $0.58 $0.57 0.57

Her average cost per guest is $ 0.57, so she is below her set average. She is doing pretty good.

Question 6: Josiam operates the food service at Springdale Valley School system.

Based on last years bill, what was each kitchens electricity usage? a. Assuming no operating changes, how much more will be spent next year?
Number of Kwh Used Last Year Electricity Cost Last Year Estimated Electricity Cost for Next Year $7,360.00 $8,280.00 $11,040.00 $13,800.00 $40,480.00 Kwh Cost Estimate Next Year 0.092 0.092 0.092 0.092 0.092

Springdale Elementary Jefferson Elementary Clinton Middle School Tri-valley High School Total

School

$6,800.00 $7,650.00 $10,200.00 $12,750.00 $37,400.00

80,000 90,000 120,000 150,000 440,000

Answer: $ 3080.00 more will be spent next year.

b. Who are some of Josiams best resources for discovering ways to limit electricity usage in the kitchens? Answer: Springdale Elementary and Jefferson Elementary discovered more ways to limit electricity usage. Question 7: Enrique has located the perfect spot for his restaurant. Calculate the monthly lease amount for both options. Which lease option should Enrique choose? Why?
Option 1 Flat Fee per Square Foot $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 24 Option 2 Flat Fee per Five % Month of Sales $3,000 $3,250 $3,000 $2,750 $3,000 $3,250 $3,000 $3,500 $3,000 $4,000 $3,000 $3,500 $3,000 $3,500 $3,000 $4,250 $3,000 $4,500 $3,000 $4,750 $3,000 $5,500 $3,000 $6,750 $36,000 $49,500

Month Jan Feb Mar April May June July Aug Sept Oct Nov Dec Total

Sales Forecast $65,000 $55,000 $65,000 $70,000 $80,000 $70,000 $70,000 $85,000 $90,000 $95,000 $110,000 $135,000 $990,000

# of Square Feet 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000

Monthly Lease $ $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $72,000

Monthly Lease $ $6,250 $5,750 $6,250 $6,500 $7,000 $6,500 $6,500 $7,250 $7,500 $7,750 $8,500 $9,750 $85,500

Enrique must choose option 1 because paying per square feet lease is cheaper than paying flat fee per month of $ 3000.00.

Question 8: Libbey Hocking is the owner of the Hummingbird, an all-organic

restaurant featuring fresh salads and a variety of vegetarian entre dishes. Help Libbey get more information to assess her best purchase choice by completing the following product cost comparison worksheet.
Hummingbirds Glassware Purchase Worksheet

Product Durability

Price per Dozen 50.00 35.00 26.00

Number of Dozens 40 40 40

Total Cost

Highest Middle Lowest

Total Per Estimated Per Use Number Glass Uses Per Cost of Cost Glass Glasses 2,000 480 4.17 1000 0.00417 1,400 480 2.92 750 0.00389 1,040 480 2.17 500 0.00434

a. Based on cost per use only, which quality glass should Libbey purchase? Answer: Libbey should purchase middle quality glass. b. What non-purchase price factors might influence Libbeys choice of glassware? Answer: c. If you were Libbey, which product alternative would you select? Explain your answer. Answer: