Question

In: Accounting

Information need from Case 3 for the year end December 31, 2007 need for this question....

Information need from Case 3 for the year end December 31, 2007 need for this question.

Total sales revenue: $639,111

Food operations sales revenue: $458,602 and Beverage operations sales revenue: $180,509

Average check for food and beverages: $9.59 Average check for food: $6.88 Average check for beverages: $2.71

In the case at the end of Chapter 3, you calculated the average food and beverage check for the 4C Company’s 84-seat restaurant in Year 2004. The restaurant was open for 52 weeks, 6 days a week for lunch, and 5 days a week for dinner. An analysis of sales checks indicated that the average turnover was 1.5 times for lunch and 1.25 times for dinner. Lunch contributes about 45 percent of total sales revenue and dinner, 55 percent. Total beverage sales revenue is 20 percent at lunch and 80 percent at dinner. a. Calculate the average lunch and average dinner checks for food and beverages.

This is how I think you solve the question. Is this correct?

Ave Lunch Check = (45% * $639,111) / (84 seats * 1.5 * 312days) = $7.3158 then of this $7.3158, 20% is from beverage sales and 80% is from food sales therefore:

Average lunch beverage check = $7.3158 * .2 = $1.46

Average lunch food check = $7.3158 * .8 = $5.85

Ave Dinner check = (55% * $639,111) / (84 seats * 1.25 * 260days) = $12.87586 then of this $12.87586, 80% is from beverage sales and 20% is from food sales therefore:

Average dinner beverage check = $12.87586 * .8 = $10.30

Average lunch food check = $12.87586 * .2 = $2.57

Solutions

Expert Solution

The ask is to find following :

  • Average Check for Food at LUNCH
  • Average Check for Food at DINNER
  • Average Check for Beverages at LUNCH
  • Average Check for Beverages at DINNER

To arrive at the above the formula will be as tabulated hereunder :

Total Sales Revenue = 639111 out of which

Lunch Revenue = 45% = 639111*45% = 287600

Dinner Revenue = 55%= 639111*55% = 351511

Working (A)

Total Beverage Revenue split between Lunch and Dinner is 20% and 80% meaning

Beverage Revenue at Lunch = 180509 * 20% = 36102

Beverage Revenue at Dinner = 180509 * 80% = 144407

Working-(B)

Total Revenue from Lunch = Lunch Revenue from Food + Lunch Revenue from Beverage or , 287600 = Lunch Food Rev + 36102 or Lunch Food Rev =  287600 - 36102 = 251498

Working-(C)

Therefore Food Revenue at Dinner = Total Foods Revenue - Food revenue at Lunch = 458602-251498=207104

Working - (D)

Total Lunches = 52 * 6 * 84 * 1.5 = 39312

Total Dinners = 52 * 5 * 84 * 1.25 = 27300

Therefore the desired rates are as hereunder :

Average Check at LUNCH (F&B combined) = (251498+36101)/(39312) = 7.32

Average Check at DINNER (F&B combined) = (207104+144407)/(27300) = 12.88

ekkarill92 answered 1 year ago
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