Question

Carreras Café is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be 40 percent below those served in May, because so many students leave for the summer. In May, the restaurant served 5,100 meals at an average price of $15. In the summer (June through August), the average price of a meal typically increases by 40 percent and the average food cost of a meal increases by 10 percent. Other costs are typically unchanged during the summer. The following cost information is available for May.

Service costs (variable with respect to meals)
Variable service costs (with respect to meals)
Food costs	$	11,200
Labor		16,100
Other variable costs		6,300
Fixed service costs		8,700
Total service costs	$	42,300
Marketing and administrative costs
Marketing (variable with respect to meals)		6,700
Administrative (fixed)		4,100
Total marketing and administrative costs	$	10,800
Total costs	$	53,100

Required:

Prepare a budgeted income statement for June. (Do not round intermediate calculations.)

Answer 1