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Title: Nirav Patel Hoboken | Direct Operating Expenses and Management Salaries


1
Direct Operating Expenses and Management Salaries
Nirav Patel Hoboken
2
Definition
ANALYZING AN INCOME CASH FLOW STATEMENT
  • To control cost, managers need to be able to
    calculate the net profit, or loss. The Income
    cash flow statement is the financial document
    showing a company's income, expenses and cash
    balance over a given period . ?

3
Food Sales
  • Include revenue from food, coffee, tea, milk,
    juices and other non-alcoholic items typically
    part of a meal. If there is no alcoholic beverage
    service, soft drinks would also be included in
    this category. ?

4
Beverage Sales
  • Beverage Sales includes wine, liquor, beer and
    soft drinks. ?

5
Food Cost
  • Food Cost includes food, coffee, tea, milk and
    soft drink expenses associated with the service
    of meals. (generally between 25 35 of food
    sales). ?

6
Beverage Cost
  • Beverage Cost includes beverage expenditures
    associated with the sale of all wines, liquors
    and beers. (generally between 15 25 of
    beverage sales). ?

7
Other Income
  • Other Income includes cover charges, banquet room
    rental, sundry sales, vending sales, telephone
    commissions, salvage sales and other
    miscellaneous revenue items. ?

8
Employee Wages
  • Employee wages includes all positions including
    categories such as, host, server bus person,
    cook, dishwasher, storeroom clerk and bartenders
    wages except restaurant managers. ?

9
Management Salaries
  • Management salaries includes restaurant manager
    salary. ?

10
Employee Benefits
  • Employee Benefits include social security taxes,
    unemployment taxes and state health insurance
    tax. It also includes insurance (such as
    worker's compensation and health coverage),
    employee meals and other benefits. ?

11
Direct Operating Exp.
  • Direct Operating Expense includes uniforms,
    laundry, tableware and linen, utensils, kitchen
    fuel, supplies, menus, contract cleaning, flowers
    and decorations, auto expense, licenses and
    permits and other expenses. ?

12
Music Entertainment
  • Music and Entertainment Expense includes
    musicians, entertainers, royalties and other
    costs.
  • In a dining situation, the entertainment should
    complement the overall atmosphere. In some type
    of facilities, the entertainment may be a major
    reason why people come in.
  • The cost of entertainment must produce a revenue
    increase greater than the cost. (see graph) ?

13
Marketing
  • Marketing Expense includes selling and promotion
    costs, advertising, public relations, franchise
    fees and other expenses incurred to make the
    public aware of the restaurant. (should be around
    3 from total FB sales, and 6 for the first
    year). ?

14
Utilities
  • Utilities Expense includes electricity, gas,
    water and sewer services. It excludes fuel used
    to operate the kitchen. ?

15
Repairs Maintenance
  • Repairs and Maintenance Expense includes
    supplies, materials and contracted work
    associated with maintaining the building and
    grounds. ?

16
Administrative
  • Administrative Expense includes overhead items
    required to run the business, but not directly
    related to the service of the customer. Items
    included are office supplies, postage, computers
    and software, telephone, travel, general
    insurance, credit card commissions, collection
    fees, cash shortages, and other administrative
    costs. ?

17
Rent
  • Rent is the amount paid for the use of a
    premises. (should not exceed 5 to 8 of total
    FB sales). ?

18
Interest
  • Interest Expense is the periodic charge for the
    use of funds loaned by a bank or other lender. ?

19
KDV
  • KDV is the Turkish Tax based on total food
    beverage sales plus other income. ?

20
Refund
  • Refund is the periodic back payment of funds
    loaned by a bank or other lender. ?

21
Exercise A1
22
Exercise A1 ( result)
23
Exercise A1 ( result)
24
Exercise A2
25
Exercise A2 ( result)
26
Exercise A2 ( result)
27
Break-even Point
ANALYZING AN INCOME CASH FLOW STATEMENT
  • To control cost, managers need to be able to
    calculate the breakeven point. The simple
    definition of a breakeven point is the volume of
    sales or guest needed daily for a business to
    generate zero profit. Formula

28
Exercise A1 ( result)
29
Break-even Point
ANALYZING AN INCOME CASH FLOW STATEMENT
  • Calculate the breakeven for the exercice A2

30
Exercise A2 ( result)
31
Exercise A3
32
Exercise A4
33
Forecasting Yearly Sales
ANALYZING AN INCOME CASH FLOW STATEMENT
34
Forecasting Monthly Sales
ANALYZING AN INCOME CASH FLOW STATEMENT
35
Exercise D1
ANALYZING AN INCOME CASH FLOW STATEMENT
36
Exercise D1 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
37
Exercise E1
ANALYZING AN INCOME CASH FLOW STATEMENT
38
Exercise E1 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
39
Exercise D2
ANAaLYZING AN INCOME CASH FLOW STATEMENT
40
Exercise D2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
41
Exercise E2
ANALYZING AN INCOME CASH FLOW STATEMENT
42
Exercise E2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
43
Exercise F2
ANALYZING AN INCOME CASH FLOW STATEMENT
44
Exercise F2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
45
Exercise F2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
46
Exercise F2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
47
Exercise E1
ANALYZING AN INCOME CASH FLOW STATEMENT
  • The cost of entertainment must produce a revenue
    increase greater than the cost. Consider the
    following sample

48
Mid Term 2005 Spring - A
ANALYZING AN INCOME CASH FLOW STATEMENT
49
Mid Term 2005 Spring - B
ANALYZING AN INCOME CASH FLOW STATEMENT
50
Mid Term 2005 Spring - C
ANALYZING AN INCOME CASH FLOW STATEMENT
51
Mid Term 2005 Spring - D
ANALYZING AN INCOME CASH FLOW STATEMENT
52
Mid Term 2005 Spring A
53
Mid Term 2005 Spring B
54
Mid Term 2005 Spring C
55
Mid Term 2005 Spring D
56
Thank You
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