Instructions for Costs and Budgeting

An in-depth look at business costs, budgeting, and benefits is beyond the scope of this course. We will simply learn a few basic concepts and practice some math around them.

Fixed Costs in running a business are costs that do not change no matter what the circumstances are. Some examples of fixed costs are rent or mortgage, insurance, salaries, interest payments, and property taxes.

Variable Costs go up or down depending on the circumstances of your business. Some examples of variable costs are food, hourly labor wages, and utilities. Variable costs generally go up when your business volume goes up.

For Semi-Variable Costs, part of the cost does not change for any reason, but part of the cost does change depending on the circumstances. A good example of a semi-variable cost is payroll. Labor costs for managers who are on salary stay the same no matter what the business volume is, but hourly labor wages go up when business volume goes up. So in the overall payroll, part of the costs stay the same, and part of the costs fluctuate with business.

Benefits for employees need to be taken into account when making a budget. Some examples of benefits are: paid time off, health insurance (which might include vision or dental), retirement, disability, wellness programs, and tuition reimbursement.

The homework assignment and quiz will simply look at some numbers related to the above concepts.

Assignment

Purpose

Outcomes

Instructions

Tips for Success

Costs and Budgeting Assignment

1) If a monthly mortgage payment is $1,891.42, how much should you budget for the year?

2) If your restaurant manager has a salary of $42,000 per year, and she is paid on the 15th and the 30th of each month, how much will her base pay be for each paycheck?

3) If you are planning to spend 5% of your budget on the lease, and your lease payment is $11,200 a month, what is your total restaurant budget for the month?

4) Property taxes for your restaurant for the year will be $13,500. If you pay property taxes twice a year, how much will you pay in each payment?

5) If your servers receive wages of $13.69 per hour, how much in base wages will one server make if he works a 50-hour week?

6a) If you want to make a profit of 30% on the food you serve, and it costs $29.61 to make a particular dinner, how much profit would you want to make on that dinner?

b) How much should you charge for that dinner to make 30% profit?

7a) If your utilities bill goes up 20% in October from the bill in September, and the bill in September was $965, how much did it go up in the month of October?

b) What was the utilities bill in the month of October?

8a) If your food costs in February were $38,450, and in March they were $41,235, how much did they increase in the month of March?

b) What percent of February’s costs was the increase in food costs?

9) If a line cook gets 40 hours of paid time off in a year, and is paid $15 an hour, how much will this benefit cost you?

10a) If health insurance costs $267 per month per employee, how much will you pay per month if you have 15 employees?

b) How much will you pay for these employees for a full year?

11a) If disability insurance for an employee costs $468 per year, how much will the monthly payment be?

b) What will you pay per month if you cover 20 employees?