Chapter 19 — Self-Check Quiz

Twenty-six questions. Multiple choice and short answer. Answer key in the collapsed block at the bottom — write your answers down before you open it. All wage figures are illustrative.

Multiple choice

1. Labor cost percentage properly includes all of the following EXCEPT:

• a) the owner's salary, if the owner works in the business
• b) employer payroll taxes
• c) workers' compensation insurance
• d) the food cost of shift meals served to staff

2. Bellwether's fixed labor floor — salaries, payroll taxes on those salaries, workers' compensation, and benefits — is:

• a) \$150,000, or 9.7% of sales
• b) \$191,895, or 12.4% of sales
• c) \$252,000, or 16.3% of sales
• d) \$570,461, or 36.8% of sales

3. Sales per labor hour (SPLH) is a poor tool for comparing two different restaurants because:

• a) it does not include salaried hours
• b) it moves with check average, so a higher-priced restaurant looks more productive
• c) it cannot be computed weekly
• d) it ignores overtime

4. Bellwether's dinner staffing crosses a large step at 111 covers. Between 110 and 130 covers, each additional cover costs approximately:

• a) 0.36 labor hours
• b) 0.68 labor hours
• c) 1.38 labor hours
• d) 2.10 labor hours

5. A restaurant's labor percentage improved from 34% to 31% last month. The MOST likely explanation you should rule out first is:

• a) the manager scheduled better
• b) sales were higher, and the denominator moved
• c) wages fell
• d) the fixed floor decreased

6. The chapter recommends reading a labor variance in this order:

• a) percentage, then dollars, then hours
• b) dollars, then percentage, then hours
• c) hours, then dollars, then percentage
• d) percentage, then hours, then dollars

7. Bellwether's second Friday in October — the grill cook no-show — produced a net wage effect of:

• a) a \$168 cost
• b) a \$103.50 cost
• c) a \$12 saving
• d) a \$116.70 cost

8. The single most important reason the chapter says that Friday went wrong is:

• a) the grill cook did not show up
• b) the sous chef was already on a double
• c) the schedule was written to a 120-cover band on a night with 142 on the books
• d) the 40-top was booked at 6:30

9. Bellwether's Sunday brunch runs 48.5% labor. Closing it would:

• a) improve the annual labor percentage by about 1.1 points
• b) worsen the annual labor percentage by about 1.1 points
• c) leave the annual labor percentage unchanged
• d) improve labor percentage but worsen prime cost

10. A split shift is:

• a) two employees sharing one position across a week
• b) one employee working two separated blocks in a single day with unpaid time between
• c) a shift that crosses the workweek boundary
• d) a shift where an employee works two stations at once

11. A cut order should specify:

• a) clock times for each cut
• b) objective conditions that trigger each cut
• c) the manager's discretion, so the floor can respond to the room
• d) the labor percentage target for the night

12. The chapter says you should cut the END of a shift and never the beginning because:

• a) closing tasks are less important than opening ones
• b) a station that starts behind stays behind for the whole service
• c) pre-service hours are paid at a lower rate
• d) guests notice late cuts more than early starts

13. Employer payroll taxes at Bellwether run about 9.2% of wages. FUTA and SUTA behave differently from FICA because they:

• a) are paid by the employee
• b) are charged on a capped amount per employee, making them effectively a per-head cost
• c) apply only to salaried positions
• d) are waived for restaurants under 25 employees

14. An overtime hour for Bellwether's \$21.00 hearth cook costs, all-in:

• a) \$31.50
• b) \$23.43
• c) \$35.16
• d) \$42.00

15. Bellwether's peak kitchen line is four stations, and the hearth caps the kitchen at approximately:

• a) 110 covers a night
• b) 123 covers a night
• c) 144 covers a night
• d) 168 covers a night

16. Chapter 4 modeled Bellwether's labor as \$252,000 fixed plus 16.0% of sales. Built bottom-up, the errors were:

• a) fixed too low, variable too low
• b) fixed too high, variable too low
• c) fixed too high, variable too high
• d) fixed too low, variable too high

17. Weeks 14–52 must average about 30.2–30.3% labor because:

• a) labor is seasonally cheaper after the first quarter
• b) Q1 ran 66.6% prime cost and consumed more than its share of the annual prime-cost budget
• c) the plan assumes a wage reduction in week 14
• d) covers rise faster than hours after the ramp

18. The chapter's verdict on reaching 30.2% labor in weeks 14–52 by scheduling alone is:

• a) achievable with a disciplined cut order
• b) achievable if overtime is eliminated
• c) not achievable; scheduling discipline is worth roughly 1.2 points of the 5.8-point gap
• d) not achievable under any combination of levers

Short answer

19. Bellwether's base operating week produces \$27,130 of sales on 453.5 hourly hours and 695 covers. Compute SPLH and CPLH.

20. A restaurant pays \$412,000 in wages, \$37,900 in payroll taxes, \$11,200 in workers' compensation, and \$14,900 in benefits, on \$1,380,000 of net sales. Compute labor cost percentage.

21. Explain why a manager who reads only the labor percentage will cut hours on the wrong days. Use week 31's split between the hours effect and the sales effect.

22. Bellwether's plan funds 344 hourly hours a week in weeks 14–52 and the staffing guide needs 453.5. Name four specific positions or shifts that would have to disappear to close that gap, and say what the resulting Saturday looks like.

23. A night runs hotter than forecast and the manager is deciding whether to call in a server for four hours at roughly \$42 all-in. Give the arithmetic that usually favors the call, and name the two non-financial reasons managers avoid it.

24. State the three structural levers that could close the last 2.3 points of Bellwether's labor gap, and say which one leaves the business better rather than smaller.

25. The October Friday's labor report showed an improvement. List three costs that night generated that appear on no report the restaurant produces.

26. Why does the chapter insist you state your denominator in writing every time you quote a labor percentage? Give the three denominators available at Bellwether and the percentage each produces for the same \$10,970 of weekly labor.