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wn. The owner expects that the number of meals rved in June will be 40 percent below those rved in May, because so many students leave for e summer. In May, the restaurant served 4,200 eals at an average price of $15.00, In the summer

wn. The owner expects that the number of meals rved in June will be 40 percent below those rved in May, because so many students leave for e summer. In May, the restaurant served 4,200 eals at an average price of $15.00, In the summer

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Carreras Café is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be 40 percent below those served in May, because so many students leave for the summer. In May, the restaurant served 4,200 meals at an average price of $15.00. In the summer (June through August), the average price of a meal typically increases by 25 percent and the average food cost of a meal increases by 10 percent. Other costs are typically unchanged during the summer. The following cost information is available for May. Service costs (variable with respect to meals) Variable service costs (with respect to meals) Food costs $ 11,550 Labor 16,800 Other variable costs 5,750 Fixed service costs 9,600 Total service costs $ 43,700 Marketing and administrative costs Marketing (variable with respect to meals) 6,300 Administrative (fixed) 5,000 Total marketing and administrative costs $ 11,300 Total costs $ 55,000 Required: Prepare a budgeted income statement for June.
Transcribed Image Text:Carreras Café is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be 40 percent below those served in May, because so many students leave for the summer. In May, the restaurant served 4,200 meals at an average price of $15.00. In the summer (June through August), the average price of a meal typically increases by 25 percent and the average food cost of a meal increases by 10 percent. Other costs are typically unchanged during the summer. The following cost information is available for May. Service costs (variable with respect to meals) Variable service costs (with respect to meals) Food costs $ 11,550 Labor 16,800 Other variable costs 5,750 Fixed service costs 9,600 Total service costs $ 43,700 Marketing and administrative costs Marketing (variable with respect to meals) 6,300 Administrative (fixed) 5,000 Total marketing and administrative costs $ 11,300 Total costs $ 55,000 Required: Prepare a budgeted income statement for June.
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