#### Question Details

##### (Solution) - Carreras Caf is a Spanish restaurant in a college town

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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 4,200 meals at an average price of \$15.00. In the summer (June through August), the average price of a meal typically increases by 25 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$11,550
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,800
Other variable costs . . . . . . . . . . . . . . . . . . . . . . . 5,750
Fixed service costs. . . . . . . . . . . . . . . . . . . . . . . . 9,600
Total service costs . . . . . . . . . . . . . . . . . . . . . . \$43,700
Marketing (variable with respect to meals) . . . . . 6,300
Administrative (fixed) . . . . . . . . . . . . . . . . . . . . 5,000
Total marketing and administrative costs . . . . \$11,300
Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$55,000
Required
Prepare a budgeted income statement for June.

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