Jupiter's Pizzeria & Billiards is a sports-minded pub with pizza, a large beer selection, pool tables and a handful of arcade games. Jupiter's Pizzeria & Billiards had budgeted revenues for last year of $41,500, and budgeted expenses of $31,250. The pub’s sales last year were $43,100 and its expenses totaled $30,700.
The estimates made by the Jupiter's Pizzeria & Billiards manager are as follows:
Jupiter's Pizzeria & Billiards’ sales will increase by 3.2% this year.
Jupiter's Pizzeria & Billiards’ expenses will increase by 2.4% this year.
Jupiter's Pizzeria & Billiards’ manager assumes a target food cost of 30%.
Jupiter's Pizzeria & Billiards’ manager forecasts the labor cost for this year will be $9,400, and she assumes last year’s payroll allocation of 8.75% will not change.
What should Jupiter's Pizzeria & Billiards’ managers budget for payroll allocations?