Carreras Café is a Spanish restaurant in a college town. The owner expects that
ID: 2456583 • Letter: C
Question
Carreras Café is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be 50 percent below those served in May, because so many students leave for the summer. In May, the restaurant served 4,500 meals at an average price of $25.00. In the summer (June through August), the average price of a meal typically increases by 18 percent and the average food cost of a meal increases by 20 percent. Other costs are typically unchanged during the summer. The following cost information is available for May.
Prepare a budgeted income statement for June. (Do not round intermediate calculations.)
Carreras Café is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be 50 percent below those served in May, because so many students leave for the summer. In May, the restaurant served 4,500 meals at an average price of $25.00. In the summer (June through August), the average price of a meal typically increases by 18 percent and the average food cost of a meal increases by 20 percent. Other costs are typically unchanged during the summer. The following cost information is available for May.
Explanation / Answer
prepare the budgeted income statemnt of June.
Particulars Amount($) Calculation Revenues (2250*29.5) 66,375.00 (4500*0.5*25*1.18) Less: Service costs Food 6,480.00 10800*0.5*1.2 Labor 8,150.00 16300*0.5 Other variable costs 2,900.00 5800*0.5 Fixed service costs 9,200.00 Fixed Total manufacturing costs 26,730.00 Gross profit margin 39,645.00 Less: Marketing and Administrative Marketing(variable) 3,300.00 6600*0.5 Administrative 4,400.00 Fixed Total marketing and administrative costs 7,700.00 Operating profit 31,945.00