Asked by: Edit Goldsternbusiness and finance sales
What are the fixed costs of a restaurant?
Last Updated: 11th May, 2020
- Fixed costs include rent, mortgage, salaries, loan payments, license fees, and insurance premiums.
- Variable costs include food, hourly wages, and utilities.
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Similarly, it is asked, what are variable costs for a restaurant?
Fixed costs would include rent, franchise fees, and licenses (e.g. Restaurant operator license). Variable costs would include food, salaries, marketing, and taxes.
Likewise, what are some examples of fixed and variable costs? Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output. Examples of variable costs include labor and the cost of raw materials, while fixed costs may include lease and rental payments, insurance, and interest payments.
Consequently, what are examples of fixed costs?
Here are several examples of fixed costs:
- Amortization. This is the gradual charging to expense of the cost of an intangible asset (such as a purchased patent) over the useful life of the asset.
- Interest expense.
- Property taxes.
How do you calculate restaurant expenses?
Check out the example below to see this food cost percentage formula in action:
- Beginning Inventory = $15,000.
- Purchases = $4,000.
- Ending Inventory = $16,000.
- Food Sales = $10,000.
- Food Cost Percentage = (15,000 + 4,000 – 16,000) ÷ 10,000.
- Food Cost Percentage = 3,000 ÷ 10,000.
- Food Cost Percentage = 0.30 or 30%