Boulevard Sandwiches Inc B Case Solution

Therefore, in a flexible budget number of units sold is calculated by dividing the per-unit cost of lunch by 40% of the gross sales. Similarly, for dinner, the number of units sold was deducted. The variable cost was determined based on the number of units sold. Food cost, operating expenses for lunch was higher than planned. The flexible budget allows comparing the actual expenses with the budget if the budget would have made for the actual quantity.

2. What were the factors that contributed to the difference between actual revenues and planned revenues for 2018? Analyze and quantify the impact on profit

Firstly, the actual average gross sale per unit of dinner was $11 as compared to $10.5 in the planned budget. The difference of $0.5 allowed the actual revenues to increase. The reason for this increase could be that there is a fewer number of customers but the order quantity was high. Meaning that few customers ordered a greater amount of food thereby increasing the average gross sale per unit. Moreover, the total customer count was higher than the planned budget which also contributes to the increase in revenues. The restaurant had planned for 3,850 customers however the actual number of customers was 4,025.