Problem 2 e manager of the Spartan Land Restaurant is developing the operating budget for nex ar using the following financial information from the current year: Current Year's Amount od revenue verage revenue od cost $973,000 $112,500 36% 23% verage cost bor (including benefits) $298,000 her operating costs 16% xed costs $70,000 Next Year's Percentage Increase (Decrease) What is the current year's budgeted profit (loss)? Develop next year's budget: indicate the profit (loss). 4% 2% 1% (1%) (2%) same same Next Year's Amount ($)
Problem 2 e manager of the Spartan Land Restaurant is developing the operating budget for nex ar using the following financial information from the current year: Current Year's Amount od revenue verage revenue od cost $973,000 $112,500 36% 23% verage cost bor (including benefits) $298,000 her operating costs 16% xed costs $70,000 Next Year's Percentage Increase (Decrease) What is the current year's budgeted profit (loss)? Develop next year's budget: indicate the profit (loss). 4% 2% 1% (1%) (2%) same same Next Year's Amount ($)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
100%
Do problem 2, a and b
Transcribed Image Text:.
.
Item
.
Decrease beverage costs to 20%
Decrease payroll costs to 32% (but benefit 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?
Problem 2
The manager of the Spartan Land Restaurant is developing the operating budget for next
year using the following financial information from the current year:
Current Year's
Amount
Operations Budgeting and Cost-Volume-Profit Analysis 141
Food revenue
Beverage revenue
Food cost
Beverage cost
Labor (including benefits)
Other operating costs
Fixed costs
Food revenue
Food cost
$973,000
$112,500
Entertainment
Advertising
Utilities
36%
23%
$298,000
16%
$70,000
a. What is the current year's budgeted profit (loss)?
b. Develop next year's budget: indicate the profit (loss).
Problem 3
Payroll
Payroll taxes/benefits
Direct operating expenses
Next Year's Percentage
Increase (Decrease)
Assume the approved food operations budget for the Hilotown Restaurant for 20X1 is as
follows:
4%
2%
1%
$
1,400,000
434,000
364,000
42,000
112,000
14,000
42,000
770.000
(1%)
(2%)
same
same
Next Year's
Amount ($)
% of Revenue
100
38833889
31
26
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education