#1: This week, we look at Budgeting.
#2: We will look at the major types of budget and particularly focus on operating budget. Especially, we will take a close look at operating budget in three parts: forecasting revenue, expenses, and profits.
#3: This is my note – Budgeting is a kind of planning to determine a financial plan for a certain period time. There are three types of budget: operation(operating), capital, and cash budget.
#4: Particularly, operating budget is a projected financial plan for a specific period time. Basically it forecasts revenue, expenses, and profits. The budget outlines financial targets related to sales and costs. It helps managers plan for the financial activities taking place in the operations.
#5: There are …show more content…
Revenue can be forecasted by Day part. Which means a restaurant can look at separate sales for breakfast, lunch, or dinner.
#12. Based on what we look at revenue forecast, please solve problems for revenue forecast for each department and then get total revenue also average sales per customers. Then you need to compare the values with actual revenue to answer to the questions. The solutions are included in notes page.
#13. Now we move on to Budget expenses. Recall the income statement, there are three major categories of costs for a restaurant or foodservice operation: food (and beverage) costs, labor costs, and other operating costs.
First, food cost can be forecasted if you know forecasted sales and set desired food cost percentage, using the formant of food cost percentage = Cost of food ÷ Food revenue, covered in chapter 3. Look at the example in your textbook or notes page. As you see, desired food cost percentage is the key element in forecasting food cost
#14. Labor cost includes three parts: managers’ salary (fixed), employees’ hourly wage (variable), and benefit costs.
As we looked in Chapter 3, prime costs includes labor and food costs because it can account for 50% or more of total …show more content…
Occupancy expenses include rent, insurance, property taxes, depreciation, and amortization. As you see most occupancy expenses are fixed costs.
#24. Finally we move on to budgeting for profit. Simply, if you know total forecasted revenue and forecasted expenses, you should be able to get forecasted profits. (Expected profit/loss = Budgeted revenue – Budgeted expense). This is what most companies are interested in. To determine if a company can make appropriate profit, it needs to evaluate the expected profit by comparing it with previous data. Also, you can evaluate it by getting profit percentage forecast by diving profit forecast by revenue forecast.
#25. Also managers can compare with standards, targets, or other similar business through the benchmarking process.
If you want to know what forecasted profit per guest will be, you can get it by dividing forecasted profit by the forecasted number of guests served. (Profit per Guest Served = Profit ÷ the number of guests) served See the example in notes page from the textbook.
#26. This is a question to summarize what we looked at today, to get total budgeted revenue and profit percentage and profit per guest. Please work on this question by yourself first and then check your answers with the
#2: We will look at the major types of budget and particularly focus on operating budget. Especially, we will take a close look at operating budget in three parts: forecasting revenue, expenses, and profits.
#3: This is my note – Budgeting is a kind of planning to determine a financial plan for a certain period time. There are three types of budget: operation(operating), capital, and cash budget.
#4: Particularly, operating budget is a projected financial plan for a specific period time. Basically it forecasts revenue, expenses, and profits. The budget outlines financial targets related to sales and costs. It helps managers plan for the financial activities taking place in the operations.
#5: There are …show more content…
Revenue can be forecasted by Day part. Which means a restaurant can look at separate sales for breakfast, lunch, or dinner.
#12. Based on what we look at revenue forecast, please solve problems for revenue forecast for each department and then get total revenue also average sales per customers. Then you need to compare the values with actual revenue to answer to the questions. The solutions are included in notes page.
#13. Now we move on to Budget expenses. Recall the income statement, there are three major categories of costs for a restaurant or foodservice operation: food (and beverage) costs, labor costs, and other operating costs.
First, food cost can be forecasted if you know forecasted sales and set desired food cost percentage, using the formant of food cost percentage = Cost of food ÷ Food revenue, covered in chapter 3. Look at the example in your textbook or notes page. As you see, desired food cost percentage is the key element in forecasting food cost
#14. Labor cost includes three parts: managers’ salary (fixed), employees’ hourly wage (variable), and benefit costs.
As we looked in Chapter 3, prime costs includes labor and food costs because it can account for 50% or more of total …show more content…
Occupancy expenses include rent, insurance, property taxes, depreciation, and amortization. As you see most occupancy expenses are fixed costs.
#24. Finally we move on to budgeting for profit. Simply, if you know total forecasted revenue and forecasted expenses, you should be able to get forecasted profits. (Expected profit/loss = Budgeted revenue – Budgeted expense). This is what most companies are interested in. To determine if a company can make appropriate profit, it needs to evaluate the expected profit by comparing it with previous data. Also, you can evaluate it by getting profit percentage forecast by diving profit forecast by revenue forecast.
#25. Also managers can compare with standards, targets, or other similar business through the benchmarking process.
If you want to know what forecasted profit per guest will be, you can get it by dividing forecasted profit by the forecasted number of guests served. (Profit per Guest Served = Profit ÷ the number of guests) served See the example in notes page from the textbook.
#26. This is a question to summarize what we looked at today, to get total budgeted revenue and profit percentage and profit per guest. Please work on this question by yourself first and then check your answers with the