Final Exam Study Guide Exam 1 What Farr said to know from review know the basic ratios Profit margin Cost of good sold Occupancy rate Labor costs Average daily rate Cost of goods sold with certain item o Golf clubs o Food items Rack rate standard or highest hosted rate o Should never sell your place for higher than host rate Line item for green fee revenue benchmark income statement balance sheet and statement of cash flow largest expenses are labor and costs of goods sold retained earnings o Ex golf resort 60 occupancy covers covers per person menu mixes breakeven most of the stuff from exam 1 is from the ratio slides debt ratio Notes return of equity o Profit Sales Expenses o Profit Margin profit sales o RevPar Room Revenue Total Rooms Available or Occupancy x Average Room Rate o o Department Profit all of depatrment s rev all department exp o House profit or gross operating profit total department profit total of all exp departments OR Total Depart Profits Support Center Costs o Net House Profit house profit fixed expenses o COGS Costs of Goods Sales Ex Beer Sales 500 19 95 Wine Sales 2500 33 825 Liquor sales 2925 32 936 Totals sales 5925 and 1856 o 1856 5925 31 3 COGS o Labor Cost variable labor fixed labor sales Ex Food sales 10 000 Food Cost 4 100 Fixed Labor Costs 1 200 Variable Labor Costs 2 800 2800 1200 10 000 40 o Food Cost Total Food Cost Total food Rev o Covers Per Hour Total covers of operating hours Ex 300 4 75 covers per hour Per Day Tot covers of days in operation Per Server tot covers total servers o Forecasting o Benchmarks Most important numbers rooms sold covers rounds of golf COGS in Private club for food 50 Resort COGS for food 40 Golden Corral COGS for food 20 o Sales Mix sales of Item A Total Sales o Occupancy Rate Rooms Sold Rooms Available o Average Daily Rate Room Rev Rooms Sold o Breakeven Point Fixed Costs Sales Price Variable Costs Ex monthly fixed costs to maintain lodge is 50 000 Lodges sell for 300 night Variable costs 60 night 50 000 300 60 50 000 240 209 rooms to break even o Return on Member s Equity Net Profit Total Member s Equity o Debt Ratio Liabilities Member Equity o Variance Actual Budget o Inventory Turnover Cost of Invent sold avg invent Ex 10 000 in food sales 40 COGS 800 Avg Invent given value 10 000 x 40 4 000 in food sales 4000 800 5 invent turnover Exam 2 What Farr said to know from the review alot from Dr Yang prime cost if other cost categories increased by 40 whats the new if the desired profit is 15 what is the ideal total expense o 15 of the total revenues budgeted profit no questions on production projected revenue what financial statement includes o assests o liabilities o revenue and expenses Questions from Exam 2 Ciara s Hot House DESCRIPTION Revenue Food and Beverage Costs Labor Costs Other Costs Total Expenses Profits Use Chart above for Questions 1 5 1 000 000 400 000 375 000 60 000 835 000 165 000 100 40 37 5 6 83 5 16 5 If Farr ever asks a question about Ciara or Halle Berry they are ALWAYS the answer 1 How much is the prime cost from Ciara s Hot House a Answer 775 000 b How to get it a Answer 141 000 i Prime cost Food and Beverage Cost Labor cost 2 If the other cost category increases by 40 how much would profits for Ciara s increase assuming that all other items do not change 3 If the desired profit is 15 what is the ideal total expense b How to get it a Answer 850 000 b How to get it i Ideal expense Revenue Desired Profit 4 If the budget for food and beverage cost drops to 300 000 and the budget for total revenue remains at 1 000 000 what is the new Food and Beverage cost as of sales a Answer 30 b How to get it i 300 000 1 000 000 5 If revenue is expected to increase by 3 and total is expected to increase by 2 what is the budgeted profit for the next year a Answer 178 300 b How to get it 1 030 000 851 700 i 1 000 000 x 03 30 000 so add 30 000 to 1 000 000 to get ii 835 000 x 02 16 700 so add 16 000 to 835 00 to get iii Then take 1 030 000 851 700 178 300 6 Who is in charge of product specification a Answer Seller Supplier Formulas From Dr Yang s Slides Actual Food Costs Opening Inventory Purchases Ending Inventory Food Cost Actual Food Cost Sales Revenue Forecast Sales Last Year Sales Last Year x increase estimated Guest Count Forecast Guest Count Last Year x increase estimated Average Sales Per Guests Revenue Guest Count Revenue Desired Profit Ideal Expense Prime Cost F B Cost Labor Cost Receiving Inventory Procedures o Set a Proper Delivery Schedule o When items purchased are delivered have the delivery person put the order in the receiving area of the kitchen The receiving area must be large enough o Be sure to have the copy of the purchasing order and specifications Check the delivery quality against the spec o Check the delivery quantity and quality against both invoice and the purchase order quality Count and weigh the items and check the temperature product o Compare the prices on the invoice to those on the purchase order to ensure that they match o If everything is in order sign the invoice Purchase Order original copy sent to VENDOR o A second copy goes to the receiving area o A third copy is retained by management Exam 3 Average Daily Room rate YTD Did we meet budget of ADR Trend analysis chart from last Thursday Personal finance o Mutual fund o Stocks Corporate financial statements 1 2 questions Revenue management Know that realized means actualized actually got it Be able to look at a balance sheet pick out what s wrong analyze it and figure out what MOST LIKELY caused it o How we performed the budget good or bad Notes The objective of Revenue Management is to sell the right product to the right customer at the right time for the right price thereby maximizing revenue from a company s products and services o In practice setting prices according to predicted demand levels so that price sensitive customers who are willing to purchase at off peak times can do so at favorable prices while price insensitive customers who want to purchase at peak times still can 4 Antecedents 1 Relatively fixed Capacity 2 Perishable Inventory 3 Appropriate Costing Structure 4 Demand that is variable or uncertain How to Decipher a Balance Sheet o Add the Total Revenue and subtract total expenses and that net profit o Then take the net profit subtract the prepaid expenses and …