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 |
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