Final answer:
To determine if labor is exceeding a restaurant's goals, managers can use key performance indicators (KPIs) such as labor cost percentage and sales per labor hour.
Step-by-step explanation:
Identifying if Labor is Exceeding Restaurant Goals
To determine if labor is exceeding a restaurant's goals, managers can use key performance indicators (KPIs) such as labor cost percentage and sales per labor hour. Labor cost percentage is calculated by dividing the total labor cost by total sales and multiplying by 100. If the labor cost percentage exceeds the target set by the restaurant, it indicates labor is exceeding the goal. Sales per labor hour is calculated by dividing total sales by the total labor hours worked. If the sales per labor hour decreases below the desired level, it suggests labor is exceeding the goal.
For example, if a restaurant's target labor cost percentage is 30%, but the actual labor cost percentage comes out to be 35%, it indicates that labor expenses are higher than anticipated, exceeding the goal. Similarly, if the sales per labor hour for a specific period decreases from $100 to $80, it suggests that labor is exceeding the goal as sales generated per labor hour have decreased.