The general manager will receive a salary of $65,000 a year. There will be two shift managers at $42,000 a year. The two kitchen managers salary will be $51,000 a year. The total salary payout of these 3 positions will be $244,000 per year. Bonuses for these management positions should be between $475-$12,500, profit sharing of $0-$12,000, and commissions of $110.00-$15,000. The range of all related payroll expenses should be between $247,197.99-$285,402.
- Low attendance at the Emirates Stadium is 15,000 attendees with 50 people per hour being served at Di Stefano.
- Medium attendance at the Emirates Stadium is 45,000 attendees with 75 people per hour being served at Di Stefano.
- High attendance at the Emirates Stadium is 82,000 attendees with 150 people per hour being served at Di Stefano.
- A typical day is 8 hours so on a low attendance day, I would only need 6 servers, 1 busser, 1 bartender, 1 hostess, 2 dishwashers, 1 prep cook, and 2 sous chefs per hour.
- The rationale for the staffing I used, was based on a high attendance like a restaurant in a convention center. People need to move fast and eat quick, so for Di Stefano, in a low attendance rate (50 people) will be needed 7 servers, 1 busser, 2 bartenders and 1 hostess. In a medium attendance rate (85 people) will be needed 8-9 servers, 2 bussers, 4 bartenders and 2 hostesses. In a high attendance rate (150-175 people) will be needed 10 servers, 4 bussers, 6 bartenders and 4 hostesses.
Payroll Expense Budget for Part-Time Hourly Service
|Servers||7||$224,000.00||9||$288,000.00||10||$ 320,000.00||$ 832,000.00|
|Bussers||1||$ 34,000.00||2||$ 68,000.00||4||$ 136,000.00||$ 238,000.00|
|Bartenders||2||$ 68,000.00||4||$136,000.00||6||$ 204,000.00||$ 408,000.00|
|Hostess||1||$ 32,000.00||2||$ 64,000.00||4||$ 128,000.00||$ 224,000.00|
|Prep Cook||1||$ 37,000.00||2||$ 74,000.00||4||$ 148,000.00||$ 259,000.00|
|Dishwasher||2||$ 63,000.00||3||$ 94,500.00||5||$ 157,500.00||$ 315,000.00|
|Sous Chef||2||$ 80,000.00||2||$ 80,000.00||4||$ 160,000.00||$ 320,000.00|
|Total Payroll||$538,000.00||$804,500.00||$1,253,500.00||$ 2,596,000.00|
|Days Worked Per Year (250 days)|
|Annual Wage||Amount||Daily Pay|
|Servers||$ 32,000.00||$ 128.00|
|Bussers||$ 34,000.00||$ 136.00|
|Bartenders||$ 34,000.00||$ 136.00|
|Hostess||$ 32,000.00||$ 128.00|
|Prep Cook||$ 37,000.00||$ 148.00|
|Dishwasher||$ 31,500.00||$ 126.00|
|Sous Chef||$ 40,000.00||$ 160.00|
Strategies for Effectively Managing Payroll Expenses
- Consolidation of the Payroll Process and Minimizing Payment Cycles
The company can consolidate its payments in order to reduce the cost of follow-up. Generally, there is always a lot of wastage of time used in tracking whether all employees have been paid, when their salaries are due, and if all deductions such as income tax or loans have been made. To avoid this problem, the company can consolidate all the payment processes for all its workers.
In addition, the company can reduce the payment cycles (Carnovale 67-81). A reduction of the payment cycles will enable the Di Stefano Company to easily track its payments and any errors it may have made in its payments.
- Outsourcing of Payment Service
The business can also outsource the salary payment service. Currently, there are companies that specialize in the processing of payments and making all appropriate legal deductions in relation to employee’s salaries. In this case, these companies file taxes, deduct loans and any other appropriate fees (Carnovale 67-81). The outsourcing of the payment processing service can enable the company to focus on its main activity, which is offering meals and beverages. Since outsourcing is done at a fee, the company must ensure the benefits of outsourcing outweigh its service cost.
Section 4: Department Income Statement
Attached Excel File
Section 5: The Operating Cycle of Cost Controls
An operation cycle is also known as a cash conversion cycle and it refers to the activities that a manufacturer must undertake in order to convert his/her products to cash (Carnovale 67-81). In this case, it refers to all the steps from the acquisition of raw materials till the sale of the finished product.
In the hotel business, the cash conversion will entail the following steps: ordering necessary ingredients for the meals to be prepared, receiving the purchased order, storing the purchases, retrieving the stored items for preparation, selling the prepared meals, and recording all sales.
Table Presentation of Operating Cycle of Cost Controls Showing Challenges in Each Activity and Policy.
The ordering process is important for the success of a business since it determines the quality of purchased items and the cost of all inputs (Cheng and Chen 51-65). In this regard, a business must have a competitive ordering process to ensure that it is supplied with high-quality items at the lowest possible price (Cheng and Chen 51-65).
|· Ensuring that competitive bidders are awarded the order. There may be cases of corruption, where unqualified may win these tenders by bribing the procurement officers.
||· Implement stringent procurement measures to avoid and prevent any form of corruption (Cheng and Chen 51-65).
This stage refers to the process of a company acquiring the items it has purchased from its suppliers. Generally, the items supplied by suppliers must match those that were in the local purchase order (LPO).
|· Ensuring that the items that have been supplied are of the quality and quantity indicated in the LPO (Cheng and Chen 51-65).
· Ensuring that the items are delivered within the agreed time.
|· Managers must always counter-check the delivered items against the LPO to ensure they are the exact products in terms of quality and number that the company ordered.|
Storage is the process of safely keeping the purchased items. In this case, perishable products should be kept in the deep freeze and grains and cereals should be stored in a safe dry room.
|· There is always a risk of damage of stored products due to poor storage, especially for perishables, or because of damage by rodents.
· There is also a risk of theft of stored items due to poor storage procedures and supervision of warehouses.
|· The inventories in the stores should be properly recorded so that the company can have a record of all the items in the warehouse.
· There should be a restriction of persons who are eligible to enter the warehouse in order to reduce the risks of theft.
Issuance refers to the process where the inventory in the store is issued to the kitchen staff for preparation of various customers’ orders. Di Stefano Co. must have a proper record keeping method to ensure that only the requested products by the kitchen department have been issued from the store department.
|· The main challenge in this step is that of the kitchen staff colluding with personnel in the store’s department and stealing from the company by exaggerating the kitchen requirements.
· There is also a challenge of poor record keeping, which makes it difficult for the company to trace the purchases.
|· Di Stefano Company should require that both the store and kitchen department must keep accurate records of the items issued and received respectively. The manager should expect that these records should be identical since they represent the items used by the kitchen department.|
Production refers to the process of the company converting the ingredients into finished products through procedures such as cooking.
|· The main challenge for the company is on wastage. The company should control on the volumes of ingredients, electricity, gas, and cooking oil used in the preparation of meals to avoid waste.
· Ensuring that only the right quality of items are used in the preparation of meals so that the restaurant’s meals have a consistent flavor.
|· The business should have a structured menu and volumes of ingredients used in the preparation of each meal. This list will ensure there is consistency in the volumes of ingredients used in the preparation of meals (Hesping and Schiele 138-150).
This refers to the process of the company presenting the purchased items to the customer. The company must ensure that all payments are received and all sales must be accounted for.
|· The main challenge in this stage is theft when the cashier fails to record and account for all sales (Hesping and Schiele 138-150).
|· The business should ensure that all sales are receipted. The issuance of receipts for all sales will minimize the risks of the cashier failing to account for all sales.
The business must ensure there is a proper recording of all activities for proper accounting. Generally, the proper recording will enable the company to identify its inventory, sales, and waste levels. In addition, it will also enable it to trace any missing items or unaccounted for the transaction (Hesping and Schiele 138-150).
|· The main challenge for this process is the failure of some employees to make records of all activities they conduct in the company.
||· Di Stefano Company must make a recording of all transactions a compulsory activity. To enforce this policy, it can put heavy penalties for individuals who fail to make records of any transaction.|
Carnovale, Steven et al. “Network Connectedness in Vertical and Horizontal Manufacturing Joint Venture Formations: A Power Perspective.” Journal of Purchasing and Supply Chain Management, vol. 23, no. 2, 2017, pp. 67-81.
Cheng, Jao-Hong and Chen, Mu-Chung. “Influence of Institutional and Moral Orientations on Relational Risk Management In Supply Chains.” Journal of Purchasing and Supply Chain Management, Vol. 22, no. 2, 2016, pp. 69-154.
Hesping, Frank and Schiele, Holger. “Purchasing Strategy Development: A Multi-Level Review.” Journal of Purchasing and Supply Chain Management, vol.21, no. 2, 2015, pp. 138-150.