BHTM425_Chapter10_End of Chapter Exercises (1)

School of Business
Department of Hospitality and Tourism Management

BTM425_Chapter 10: Planning for Profit
End-of-chapter Exercises
Formulas:
- Selling Price - Product Cost = Contribution Margin per Menu Item
- Total Sales - Total Product Costs = Total Contribution Margin
- Total Contribution Margin / Number of Items Sold = Average Contribution Margin per
- A × B × C × D = Goal Value Where A = 1 - Food Cost % B = Item Popularity C = Selling
Price D = 1 - (Variable Cost % + Food Cost %)
- Total Sales - Variable Costs = Contribution Margin
- Selling Price - Variable Cost/Unit = Contribution Margin/Unit
- SP/Unit - VC/Unit = CM/Unit
- SP% - VC% = CM%
- 100% - VC% = CM%
- Fixed Costs / Contribution Margin % = Break-Even Point in Sales
- Fixed Costs / Contribution Margin per Unit (Guest) = Break-Even Point in Guests Served
- After-Tax Profit / (1 - Tax Rate) = Before-Tax Profit
- Fixed Costs + Before-Tax Profit / Contribution Margin % = Sales Dollars to Achieve
Desired After-Tax Profit
- Fixed Costs + Before-Tax Profit / Contribution Margin per Unit (Guest) = Guests to Be
Served to Achieve Desired After-Tax Profit
- Minimum Labor Cost / 1-Minimum Operating Cost = MSP
- Minimum Labor Cost / 1 - (Food Cost % + Variable Cost %)
- Total Sales / Available Seats = Sales per Seat
Trim Size: 8.5 in X 11 in c10.indd 06:39:54:PM 11/26/2014 Page 357
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Key Terms and Concepts

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Test Your Skills

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Menu Analysis Worksheet
Number Selling Total Item Total Item Contribution Total Contribution Food
Menu Item Sold Price Sales Cost Cost Margin Margin Cost %
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Food Cost Matrix
High Food Cost %

(Above %)
Low Food Cost %

(Below %)
Low Popularity High Popularity

(Below sales) (Above sales)
Contribution Margin Matrix
High Contribution Margin

(Above $ )
Low Contribution Margin

(Below $ )
Low Popularity High Popularity

(Below sales) (Above sales)
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Goal Value Analysis Data
Food Cost % Number Selling Variable Cost %

Item (in decimal form) Sold Price (in decimal form)
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5FTU:PVS4LJMMT 359
Goal Value Analysis Results
“A” “B” “C” “D”

Food Cost % Number Selling Variable Cost % Goal
Item (in decimal form) Sold Price (in decimal form) Value
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Results of Changes Made to Chalupa Dinner
“A” “D”
Food Cost % “B” “C” Variable Cost %
Item (in decimal form) Number Sold Selling Price (in decimal form) Goal Value
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5FTU:PVS4LJMMT 361
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Last Year Budget
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Yardstick Standards for Labor

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% Cost % Cost
Weekly Sales Estimate
to Total to Total
Category Cost Sales $17,000 $18,000 $19,000 $20,000 $21,000
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Budget with Employee Benefits Increases
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Budget Increase Increase Increase Increase
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Cost of Employee

Benefits
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Budget Surplus/ $ 105,000

Deficit
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5FTU:PVS4LJMMT 363
Annual Budget for This Year

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Guests Served Selling Price Beverage Cost
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Guests Served Selling Price Beverage Cost
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Forecasted Beverage Revenue and Expense Forecast: Knight Kap
Guests Selling Beverage Total Beverage Total Beverage Beverage

Served Price Cost Revenue Cost Cost %
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Total
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5FTU:PVS4LJMMT 365
The Wheatfield Valley Golf Course

F&B Department
Budget Worksheet for Next Year
This Year Next Year

Actual $ % Budget $ %
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BHTM425_Chapter10_End of Chapter Exercises (1)

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BHTM425_Chapter10_End of Chapter Exercises (1)

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School of Business

Department of Hospitality and Tourism Management

Key Terms and Concepts

Test Your Skills

Menu Analysis Worksheet

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b. 6TJOHUIFSFTVMUTPG#POJTPTNFOVBOBMZTJTXPSLTIFFU JOQBSUB àMMJO

Food Cost Matrix

High Food Cost %

Low Food Cost %

Low Popularity High Popularity

Contribution Margin Matrix

High Contribution Margin

Low Contribution Margin

Low Popularity High Popularity

Goal Value Analysis Data

Food Cost % Number Selling Variable Cost %

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Goal Value Analysis Results

“A” “B” “C” “D”

Results of Changes Made to Chalupa Dinner

Per Unit (Guest) Percentage

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b. 6TJOHUIFJOGPSNBUJPOGSPNQBSUB DBMDVMBUFUIFGPMMPXJOH Spreadsheet

Per Unit (Guest) Percentage

Last Year Budget

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Yardstick Standards for Labor

Budget with Employee Benefits Increases

Current 5% 10% 15% 20%

Cost of Employee  

Budget Surplus/ $ 105,000

Annual Budget for This Year

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Per Unit (Guest) Percentage

Guests Served Selling Price Beverage Cost

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Projected Changes (Percentage Increases or Decreases)

Guests Served Selling Price Beverage Cost

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Cost of Employee

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