1. (4 Marks) Complete the following Income Statement to include the percentages. Note: Total Sales is the base (100%)

Sales	$	$	%
Food Sales	$437,920
Beverage Sales	$344,080
Total Sales		$782,000
Cost of Sales
Cost of Food Sold	$153,272
Cost of Beverages Sold	$103,224
Total Cost of Sales		$256,496
Gross Margin		$525,504
Operating Expenses
Labour	$289,340
Rent	$140,000
Other fixed costs	$57,400
Total Expenses		$486,740
Operating Income		$38,764

1. (12 Marks)
2. Using the previous Income Statement as a guide, complete the income statement on the following page assuming that total sales revenue will increase.

• The percentage increase will be based on the first 3 numbers of your student number. For example, if your student number is 199 201 200, the percentage increase will be 19.9%.

So based on that increase your new sales revenue would increase by $782,000 x 0.199 = $155,618. This means in this example Sales would be $782,000+$155,618 = $937,618. This would be set at 100% in the new income statement.

• Food sales and Beverage sales would increase in terms of dollars but remain at the same percentage of total sales.
• Cost of food and cost of beverages sold percentages will remain the same. The percentages will remain the same, but the dollar amounts will increase since sales would have increased.
• Fixed costs will remain the same.
• Payroll or Labour costs are considered variable, meaning they are based on total sales. Apply the labour cost percentage you calculated in question 1, to the total Sales in question 2 to calculate Total Labour expenses.

Sales	$	$	%
Food Sales
Beverage Sales
Total Sales
Cost of Sales
Cost of Food Sold
Cost of Beverages Sold
Total Cost of Sales
Gross Margin
Operating Expenses
Labour
Rent
Other fixed costs
Total Expenses
Operating Income

1. Calculate the breakeven level of sales

1. (14 Marks)
2. Complete the menu engineering chart on the following page, and classify all the menu items.

• There are three missing numbers from this chart that you need to complete first. You are not provided with the number sold for three menu items, Corned Beef, Chicken Wings, and Spring Rolls
• Similar to question 2 we will use your student number to input these missing numbers. For this question the first 3 numbers of your student number will be the actual number of Corned Beef sold, the middle 3 numbers will be the actual number of chicken wings sold, and the last 3 numbers of your student number will be the actual number of Spring rolls sold.
• For example, if your student number is 199 201 200, Corned Beef sold will be 199, Chicken wings will be 201, and Spring rolls will be 200

1. Once the chart is completed, make your recommendations. In this section you must be specific with your analysis specific to this menu. Do not simply write out the definitions of the item classifications, or generic recommendations obtained by an internet search. If you suggest new prices to certain items, state them and why you are changing them. If you want to redesign the menu, show the new menu and why you are placing the items in different order. If you want to remove certain items and replace them, state reasons why, and what items you will add to the menu.

Menu Item	Number Sold	Menu Mix %	Menu Price $	Item Food Cost $	Item CM $	Gross Margin $	CM Category	MM% Category	Classification
Corned Beef			8.95	3.25
Tuna Salad	328		7.95	2.32
Club Sandwich	420		12.00			3234
Hot Turkey	192		10.95	2.78
Chicken Wings			8.50	4.75
Veggie Platter	156		9.50	1.75
Beef Lasagna	182		14.95	9.50
Linguine	255			8.25	5.75
Spring Rolls			8.95	3.75
Ribeye Steak	160		29.00	18.12
Clams Casino	270			17.40		1917
Lobster	180		27.15		4.15
Total
						Avg. CM $			Avg. Menu Mix%

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