1. Complete the following.

1. 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 $882,000 x 0.199 = $175,518. This means in this example Sales would be $882,000+$175,518 = $1,057,518. 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 due to the fact that 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.

Solution:

Sales	$	$	%
Food Sales	485,100		55%
Beverage Sales	396,900		45%
Total Sales		882000	100%
Cost of Sales
Cost of Food Sold	184338		20.9%
Cost of Beverages Sold	99,225		11.25%
Total Cost of Sales		283563	32.15%
Gross Margin		598,437	67.85%
Operating Expenses
Labour	326,340		37%
Rent	120,000		13.605%
Other fixed costs	47,400		5.3741%
Total Expenses		493,740	55.98%
Operating Income		104,697	11.870%

2. Calculate the breakeven level of sale

my student number is 135617215