cost contorl
paunoh
ch09.xlsQ 1
| Chapter 9, Question 1 | ||||
| Lucir's P&L | ||||
| Last Year | % | This Year | % | |
| SALES: | ||||
| Food | $2,647,415 | $2,675,889 | ||
| Beverage | 498,119 | 965,660 | ||
| Total Sales | ||||
| COST OF SALES: | ||||
| Food | 855,104 | 1,074,420 | ||
| Beverage | 104,005 | 115,879 | ||
| Total Cost of Sales | ||||
| GROSS PROFIT: | ||||
| Food | 1,792,311 | 1,601,469 | ||
| Beverage | 394,114 | 849,781 | ||
| Total Gross Profit | ||||
| OPERATING EXPENSES: | ||||
| Salaries and Wages | 769,319 | 785,487 | ||
| Employee Benefits | 118,996 | 122,994 | ||
| Direct Operating Expenses | 146,669 | 145,357 | ||
| Music and Entertainment | 2,767 | 8,386 | ||
| Marketing | 52,579 | 69,883 | ||
| Utility Services | 88,555 | 97,836 | ||
| Repairs and Maintenance | 41,510 | 39,135 | ||
| Administrative and General | 80,252 | 78,269 | ||
| Occupancy | 144,000 | 132,000 | ||
| Depreciation | 49,812 | 61,498 | ||
| Total Operating Expenses | ||||
| Operating Income | ||||
| Interest | 104,100 | 93,378 | ||
| Income Before Income Taxes | ||||
| Income Taxes | 235,146 | 343,150 | ||
| Net Income |
&L&12Chapter 9
Q 1
Should she receive a raise?
Answer:
Q 2
| Chapter 9, Question 2 | |||||
| Faye's Condensed P & L | |||||
| Last Year | Adjusted Sales and Labor (for Last Year) | This Year | Variance | Variance % | |
| Sales | $1,865,000 | $2,315,000 | |||
| Cost of food | 615,450 | 717,650 | |||
| Cost of labor | 540,850 | 671,350 | |||
| Other expenses | 428,950 | 486,150 | |||
| Total Expenses | |||||
| Profit |
&L&12Chapter 9
Q 2
Q 3.a.
| Chapter 9, Question 3.a. | ||||
| Rudolfo's Food Expense Schedule | ||||
| Last Year | % of Food Sales | This Year | % of Food Sales | |
| Food Sales | $2,836,517 | $3,087,564 | ||
| Cost of Food Sold | ||||
| Meats and Seafood | $386,734 | $445,982 | ||
| Fruits and Vegetables | 122,915 | 165,178 | ||
| Dairy | 71,951 | 52,858 | ||
| Baked Goods | 20,985 | 29,731 | ||
| Other | 323,778 | 303,927 | ||
| Total Cost of Food Sold |
&L&12Chapter 9
Q 3.a.
Q 3.b.
| Chapter 9, Question 3.b. | |||||
| Rudolfo's Food Inventory Turnover | |||||
| Inventory Category | This Year Beginning Inventory | This Year Ending Inventory | Average Inventory Value | Cost of Food Consumed | Inventory Turnover |
| Meats and Seafood | $21,476 | $17,489 | $445,982 | ||
| Fruits and Vegetables | $1,708 | $1,015 | $165,178 | ||
| Dairy | $772 | $372 | $52,858 | ||
| Baked Goods | $160 | $131 | $29,731 | ||
| Other | $10,538 | $11,035 | $303,927 | ||
| Total |
&L&12Chapter 9
Q 3.b.
Rudolfo’s inventory turnover target for this year was 32 times. Did he meet his target? If not, what may have caused this? (Assume cost of food sold, part a, and cost of food consumed, part b, are the same for Rudolfo’s).
Answer:
Q 4
| Chapter 9, Question 4 | |||||
| This Year's Results | Next Year's Budget | ||||
| Location | This Year's Cost of Labor | This Year's Revenue | Projected Cost of Labor | Projected Revenue | Projected Labor Cost % |
| Pensacola | $285,000 | $980,500 | |||
| Daytona | $197,250 | $720,000 | |||
| Fort Myers | $235,500 | $850,250 | |||
| Tampa | $279,750 | $921,750 | |||
| Miami | $1,190,250 | $3,720,000 |
&L&12Chapter 9
Q 4
Q 5
| Chapter 9, Question 5 | ||||||||
| Revenue | Expense | Profit | # of Units | Revenue per Unit | Expense per Unit | Profit per Unit | Profit Margin % | |
| 2 Years Ago | $6,500,000 | $600,000 | ||||||
| Last Year | 9,900,000 | 800,000 | ||||||
| This Year | 13,500,000 | 1,010,000 |
&L&12Chapter 9
Q 5
Would you advise Ron to buy the company? Why or why not?
Answer:
Q 6
| Chapter 9, Question 6 | ||
| Telco Industries Food Services Department | ||
| Meals Served Last Year | % of Total Meals Served | |
| NUMBER OF MEALS SERVED: | ||
| Cafeteria | 104,250 | |
| Executive Dining Room | 12,150 | |
| Total Served | ||
| Total Cost $ | Per Meal Cost $ | |
| COST OF SALES: | ||
| Cafeteria | $248,750 | |
| Executive Dining Room | 48,450 | |
| Total Cost of Sales | ||
| OPERATING EXPENSES: | ||
| Salaries and Wages | 244,440 | |
| Employee Benefits | 61,110 | |
| 401(k) Match | 25,350 | |
| Administrative and General Expense | 46,669 | |
| China/ Glass Replacement | 12,767 | |
| Paper Products | 52,579 | |
| Other Direct Operating Expenses | 46,669 | |
| Utilities | 96,000 | |
| Repairs and Maintenance | 21,510 | |
| Equipment Rental | 1,500 | |
| Total Operating Expenses |
&L&12Chapter 9
Q 6
a. How much more did it cost (cost of sales) Basil to serve a meal in the Executive Dining Room than it did in the employee cafeteria? Why do you think that would be so?
Answers:
b. Basil’s modified P&L combines all wage and salary-related costs when calculating cost per meal served. Why do you think he elected to not allocate labor costs between the two serving areas? How could he do so?
Answers:
c. Assume you were on the Board of Directors of Telco. How would decide how much more money you should allocate to Basil’s area next year to account for rising food prices? Who would you expect to provide you with the information you need to make an informed decision about the appropriate size of the increase?
Answers:
