Labor cost normally represents 35% of the sales dollar

Business Jun 23, 2021

Labor cost normally represents 35% of the sales dollar. If a restaurant expects to pay $4,200 in labor cost this week, what is the amount of sales needed to maintain a 35% labor cost?

Expert Solution

Computation of Amount of Sales needed to maintain a 35% labor cost:

Given,

Labor Cost = $4,200 which represent 35% of Sales Dollars

So,

Amount of Sales = $4,200/35% = $12,000

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