Gary is the cafeteria manager at the Sunshine Community Hospital. He is reviewing the sales and cost records for the months of June and July. His manager has provided him with food and labor cost control standards for the cafeteria so that Gary can accurately analyze this information.Sunshine Community Hospital Public Cafeteria Cost Control StandardsFood cost percentage should be lower than 32 percent.Labor cost percentage should be between 24 and 26 percent. Table is attached.What is the cafeteria’s labor cost percentage for June? What is the cafeteria’s labor cost percentage for July? Which costs were outside acceptable standards during for June? For July? What recommendations should Gary propose to control costs in the upcoming months? inbobealTextTEXTvalenciacollege.instructure.comcours.Sunshine Community Hospital Public Cafeteria Sales and Cost RecorJuneJulySales$19,700 $16,900OpeningJune 1 July 1inventory13,000 14,105ClosingJune 30 July 31inventory14,105 17,105Food purchases8,0006,500Labor expenses5,000 5,000

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Answered: Gary is the cafeteria manager at the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Gary is the cafeteria manager at the Sunshine Community Hospital. He is reviewing the sales and cost records for the months of June and July. His manager has provided him with food and labor cost control standards for the cafeteria so that Gary can accurately analyze this information.

Sunshine Community Hospital Public Cafeteria Cost Control Standards

Food cost percentage should be lower than 32 percent.

Labor cost percentage should be between 24 and 26 percent.

Table is attached.

What is the cafeteria’s labor cost percentage for June?

What is the cafeteria’s labor cost percentage for July?

Which costs were outside acceptable standards during for June? For July? What recommendations should Gary propose to control costs in the upcoming months?

inbo
beal
Text
TEXT
valenciacollege.instructure.comcours.
Sunshine Community Hospital Public Cafeteria Sales and Cost Recor
June
July
Sales
$19,700 $16,900
Opening
June 1 July 1
inventory
13,000 14,105
Closing
June 30 July 31
inventory
14,105 17,105
Food purchases
8,000
6,500
Labor expenses
5,000 5,000

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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