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Charley's Family Steak House Case Solution
| Solution Id | Length | Case Author | Case Publisher |
|---|---|---|---|
| 602 | 317 Words (2 Pages) | E. Richard Brownlee | Darden School of Business : UV1747 |
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The Charley’s Family Steak house was business of serving the customers with various delicious meals at the time of Lunch and dinner. This company did not initiate the meal program for the breakfast time. The company’s owner Charles Turner was prospecting to increase the volume of sales and hence they would generate greater profits. The Management made a comprehensive operating plan for the fiscal year 2008. This plan contained the projected value of respective accounts of the previous year (2007). The first account that comes in the operating plan is the Food Cost which is the 55% of the Gross sales of the year 2008. Labor cost is fixed for year 2008. The operating expense for the year 2008 is 8% of the gross sales.
Following questions are answered in this case study solution:
-
Explanation of the accounts presented in 2008
-
Projected Profit for year 2008 when meals are reduced to 3700.
Charley s Family Steak House Case Analysis
The advertising budget for the year 2008 was declared to be 3.5% of the gross sales. Apart from this the miscellaneous expense is fixed. The depreciation of expense is declared as $1200 per month, which results in the annual expense of $24000.The insurance expense is $9400 was considered to keep constant. The license fee for the year 2008 is supposed to be increased by 4%. The total profit to be generated at the end of year 2008 after satisfying all the cost was projected to be $105334.
2. Projected Profit for year 2008 when meals are reduced to 3700.
|
Projected Profit for 2008 |
|
|
Gross Sales |
$ 1,227,183 |
|
Net sales |
$ 1,168,534 |
|
Food |
$ 674,950 |
|
Labor |
$ 24,000 |
|
Operating Expense |
$ 98,175 |
|
Contribution |
$ 3,192,842 |
|
|
|
|
Advertising |
$ 42,951 |
|
Miscellaneous |
$ 3,000 |
|
Depreciation |
$ 24,000 |
|
Insurance |
$ 9,400 |
|
License and Fees |
$ 11,700 |
|
Rent (Base) |
$ 72,000 |
|
Rent (Overage) |
$ - |
|
Management |
$ 95,000 |
|
|
|
|
Profit |
$ 2,934,790 |
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