Problem -
The manager of the Spartanland restaurant is developing the operating budget for next year using the following financial information from the current year:
|
Item
|
Current Year's Amount
|
Next Year's Percentage Increase (Decrease)
|
Next Year's Amount ($)
|
|
Food revenue
|
$973,000
|
4%
|
-
|
|
Beverage revenue
|
$112,500
|
2%
|
-
|
|
Food cost
|
36%
|
1%
|
-
|
|
Beverage cost
|
23%
|
(1%)
|
-
|
|
Labor (including benefits)
|
$298,000
|
(2%)
|
-
|
|
Other operating costs
|
16%
|
same
|
-
|
|
Fixed costs
|
$70,000
|
same
|
-
|
a. What is the current year's budgeted profit (loss)?
b. Develop next year's budget: indicate the profit (loss)?