Question

As a restaurant owner, why would it be important to pay attention to Labor, and cost of goods sold?

Im creating a Master Budget from a business owner's perspective and Im needing help with this part of my Master Budget

Answer 1

Being a restaurant owner it is very important to pay attention on labour and cost of good sold as, their cost are the very basic cost of a restaurant business.

Labour costs are required to be budgeted as these are all these are variable costs and keeps on changing as per the business requirement.
Cost of goods sold are very important in considering the profits of the business. These are also required to be registered and budgeted as it father helps in making the flexible/master budget of the organisation.
Master budget is formed after considering various other budgets like purchase budget, labour cost budget, raw material budget, sales budget etc.
Master budget is created after various other budgets such as financial budgeted statement, cash forecast and financial plan.
Also master budget is a central planning tool and it judges the overall performance of the organisation.

Master budget also helps in keeping a track on organizations various costs and helps in reduction of such costs.

So, keeping the above functions of Master budget in mind it should be prepared no matter for which business in master budget is being prepared.