Cost Control

Q 1

Chapter 7, Question 1
Week Original Cost of Labor Raise in Dollars Total Cost of Labor Sales Labor Cost %
1 $10,650 $27,600
2 12,075 $32,250
3 10,887 $28,650
4 10,383 $37,200
Total
&L&12Chapter 7 Q 1
Can she give the employees what they want and still make a profit? Answer:

Q 2

Chapter 7, Question 2
Operating Results for Joe Bob’s
Week Number of Guests Served Labor Hours Used
1 7,000 4,000
2 7,800 4,120
3 7,500 4,110
4 8,000 4,450
Total 30,300 16,680
Question 2.a.
Average Guest Check $12
Average Wage per Hour $8
Total Sales
Total Labor Cost
Productivity Measurement Productivity Standard
Labor Cost Percentage
Sales per Labor Hour
Labor Dollars per Guest Served
Guests Served per Labor Dollar
Guests Served per Labor Hour
Question 2.b.
Labor Category % of Labor Hours Used Labor Hours Sales per Labor Hour
Meat Production 25%
Bakery Production 15%
Salad Production 10%
Service 20%
Sanitation 20%
Management 10%
Total 100%
Question 2.c.
Day Forecasted Number of Guests Served Guests Served per Labor Hour Standard Labor Hours Budget
1 900
2 925
3 975
4 1,200
5 1,400
6 1,600
7 1,000
Total 8,000
&L&12Chapter 7 Q 2

Q 3

Chapter 7, Question 3
Six-Column Labor Cost Percentage
Unit Name: Mikel’s Steak House Date: 3/1 – 3/7
Cost of Labor Sales Labor Cost %
Weekday Today To Date Today To Date Today To Date
1 $950 $2,520
2 $1,120 $2,610
3 $1,040 $2,720
4 $1,100 $2,780
5 $1,600 $3,530
6 $1,700 $4,100
7 $1,300 $3,910
Total
&L&12Chapter 7 Q 3
Mikel wants to keep his labor cost % at 37%. Given the results of his six-column daily productivity report for the first week of March, will he be able to achieve his labor cost % standard if he continues in the same manner for the remainder of the month? If not, what actions can he take to reduce both his fixed and variable labor-related expense? Answer:

Q 4

Chapter 7, Question 4
Servers: Guests Per Labor Hour
Buspersons: Guests Per Labor Hour
Volume/Staff Forecasting for Saturday
The Baroness
Time Forecasted Number of Guests Served Server Hours Needed Busperson Hours Needed
11:00 – 12:00 85
12:00 – 1:00 175
1:00 – 2:00 95
2:00 – 3:00 30
3:00 – 4:00 25
4:00 – 5:00 45
5:00 – 6:00 90
6:00 – 7:00 125
7:00 – 8:00 185
8:00 – 9:00 150
9:00 – 10:00 90
10:00 – 11:00 45
Total 1,140
&L&12Chapter 7 Q 4
How often in the night should Jeffrey check his volume forecast in order to ensure that he achieves his labor productivity standards and thus is within budget at the end of the evening? Answer:

Q 5

Chapter 7, Question 5
Sales Labor Cost Labor Cost Percent
Week Budget Actual % of Budget Budget Actual % of Budget Budget Actual
1 $2,500 $2,250 $875 $900
2 1,700 1,610 595 630
3 4,080 3,650 1,224 1,300
4 3,100 2,800 1,085 1,100
5 2,600 2,400 910 980
Total
&L&12Chapter 7 Q 5
Do you feel that Steve has significant variations from budget? Why do you think Steve’s boss assigned Steve a lower labor cost % goal during week 3? How do you feel about Steve’s overall performance? What would you do if you were Steve’s boss? If you were Steve? Answer:

Q 6

Chapter 7, Question 6
Sales Cost of Labor Labor Cost %
California
Store 1 $91,000.00 $34,500.00
Store 2 $106,500.00 $38,750.00
Store 3 $83,500.00 $31,500.00
Total
Oregon
Store 1 $36,800.00 $12,250.00
Store 2 $61,000.00 $18,750.00
Store 3 $52,000.00 $17,500.00
Total
Washington
Store 1 $47,500.00 $14,750.00
Store 2 $46,500.00 $15,000.00
Store 3 $45,500.00 $15,000.00
Total
Nevada
Store 1 $53,000.00 $17,250.00
Store 2 $56,000.00 $18,500.00
Store 3 $55,100.00 $17,250.00
Total
Region
&L&12Chapter 7 Q 6
Can Jordan compute the average labor cost percentage for her region by summing the labor cost percentages of the four states and dividing by four? Why or why not? How is the overall labor cost percentage for her region computed? Answer:

Q 7

Chapter 7, Question 7
Hours Worked Pay Per Hour Pay Per Week Weeks in a Year Pay Before Benefits Benefits Annual Pay with Benefits
Alternative 1
Total
Alternative 2
Alternative 3
Total
&L&12Chapter 7 Q 7
Which of these three courses of action will cost the facility the most money? The least? If you were Ravi, which of these alternatives would you implement? Why? Answer:

Q 8

Chapter 7, Question 8
Hour Available Seats Guests Served Check Average Revenue RevPASH Allowable Cost Based on 30% Labor Cost
5- 6 p.m. 50
6- 7 p.m. 100
7- 8 p.m. 150
8- 9 p.m. 175
9-10 p.m. 125
10-11 p.m. 75