Numbers can be estimated. Need mainly with finding a Client's billing unit... and variable costs needed to create/supply one billing unit..
Variable Cost Analysis: What is the variable per unit cost to produce their good or service for a restaurant?
1. What is your client’s billing unit? (E.g. hourly, per table served, per item/case sold, per monthly rent, per visit, per procedure, per cart checkout, per ticket sold, etc.)
2. What are the variable costs needed to create/supply one billing unit? (E.g. if service to an average table in a client’s proposed restaurant takes .8 hours of labor at $14/hr. including payroll taxes; $2.30 in throwaways, and $7.80 in food & beverage costs; then the average billing unit cost is $21.30.) Note: This analysis is done for purposes of managerial insight. However, IRS rules require that the COG amount, stated on a return, not include the business’s own labor costs.
3. What is the per unit packaging cost? For a service, packaging can include uniforms, table set-up, presentation materials, friendly services, short wait time, etc.
4. What is the per unit transactions cost? If sales are to be paid by credit card, assume that each sale will cost you 9% of the sales amount. (From where do they get that 5% cash back?)
5. State the variable cost of producing one billable unit.