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noble june 2011 question 2 i dont know how to solve can you help me sir
thank you i n advanceThis is question 3 of June 2011 – not question 2.
Have you watched the free lectures for Paper F5, and therefore do you know what a flexed budget is? You have watched the example of preparing a flexed budget?
The original budget is based on serving 1,200 meals, whereas they actually served 1,560 meals. So you have to re-do the budget as though there were 1,560 meals being served. All variable costs and revenues will increase when changing from 1,200 to 1,560. All fixed costs will remain the same.
You have the answer – if you have any specific problems with any part of the answer then do ask again.
i had watched video
but finding difficulty in understanding and calculating
can you help me how to calculate this
2 5 6 points
staff wages and energy cost – explainin revenue calculation we add 1560*(45+35) why do we divide this by 2
2 The restaurant offers two meals: Meal A, which costs $35 per meal and Meal B, which costs $45 per meal. In
addition to this, irrespective of which meal the customer orders, the average customer consumes four drinks each
at $2·50 per drink. Therefore, the average spend per customer is either $45 or $55 including drinks, depending
on the type of meal selected. The May budget is based on 50% of customers ordering Meal A and 50% of
customers ordering Meal B.5 When the number of orders per day does not exceed 50, each member of hourly paid staff is required to work
exactly six hours per day. For every incremental increase of five in the average number of orders per day, each
member of staff has to work 0·5 hours of overtime for which they are paid at the increased rate of $12 per hour.
You should assume that all costs for hourly paid staff are treated wholly as variable costs.
6 Energy costs are deemed to be related to the total number of hours worked by each of the hourly paid staff, and
are absorbed at the rate of $2·94 per hour worked by each of the eight staff.(2) Staff wages
Average number of orders per day = 1,560/(6 days x 4 weeks) = 65 per day.
Therefore extra orders = 15 per day.
8 staff x 1·5 hours x 6 days x 4 weeks = 288 extra hours.
At $12 per hour = $3,456 extra wages.
Total flexed wages = $9,216 + $3,456 = $12,672.(5) Energy costs
Standard total hours worked = (8 x 6) x 6 days x 4 weeks = 1,152 hours.
Extra hours worked = 288 (working 2).
Total hours = 1,152 + 288 = 1,440.
At $2·94 per hour = $4,234.Revenue: when flexing the budget we use 1560 meals in total. Note (2) says that the budget was 50% order meal A and 50% order meal B. So when we flex we have 50% of 1560 (1560/2) for each meal.
Wages: In the original budget the average number of orders is 50 per day. When we flex, the average number of orders goes up to 65 per day. For every 5 extra orders, they need to work an extra 0.5 hours; so for 15 extra (65-50) they need to work an extra 15/5 x 0.5 = 1.5 hours. There are 8 staff; working extra 1.5 hours; for 6 days; for 4 weeks; and they are paid $12 an hour for the extra hours. So the wages are higher than what was budgeted by 8 x 1.5 x 6 x 4
Energy: Because the number of hours worked is more than in the original budget, the energy cost is higher than the original budget by the extra hours multiplied by the rate of 2.94 per hour.
(PS You do not need to type out the whole question or answer because I have them in front of me 🙂 )
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may i know why
Total flexed wages = $9,216 + $3,456 = $12,672. for staff wages ?It is the budgeted wages from the question plus the extra $3,456 extra wages as explained in the workings that San has typed out above.
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I understand .. thank you
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