Hamburger Minimum Wage
To make things easy, Tom and Carol only sell hamburgers, one size of fries, and one size of soft drink. You get your choice of cola or diet cola, nothing else.
The restaurant is open from 10 AM until 10 PM every day of the week except Sunday. That is 12 hours per day. Each year the restaurant is closed from July 01 to July 15 so that everyone may have a vacation.
The restaurant is also closed Thanksgiving and Christmas Day.
This means that the restaurant is open approximately 300 days per year.
300 days times 12 hours = 3,600 hours per year. Tom and Carol work all of those hours. So together Tom and Carol work 7,200 hours per year.
The name of the burger place is Tom and Carol’s Burger Dude, a very creative name.
Tom and Carol have two employees, Billy-Bob and Charlene. Both of them work 40 hours per week for the 50 weeks a year that Tom and Carol’s Burger Place is open.
2 Employees X 40 Hours per week is 80 hours per week.
50 weeks per year times 80 hours per week is 4,000 hours per year.
Billy Bob and Charlene make minimum wage.
Minimum wage is $7.25 per hour.
$7.25 per hour times 4,000 hours per year is $29,000 per year.
Tom and Carol must pay payroll taxes as well as the cost of uniforms, etc. for Billy Bob and Charlene. To make matters simple, we will ignore those things.
To keep things simple, we are going to say that the restaurant is 3,000 square feet and that the rent is $1 per square foot per month. This is a very cheap rent at $3,000 per month.
$3,000 per month times 12 months is $36,000 per year rent.
We are going to give Tom and Carol a break on utilities. Electricity, Water, Sewage, Gas, Phone, and Garbage Pick Up are only going to cost them $5,000 per month total.
$5,000 per month for utilities times 12 months is $60,000 per year.
Tom and Carol must pay insurance on the restaurant to cover accident and theft, as well as to pay claims for people too stupid to know that coffee is hot and wet floors are slippery. The insurance company is very cheap. They only charge Tom and Carol $12,000 per year.
$12,000 per year insurance.
Things break in a restaurant. Ovens break, coolers go bad, and other things just go wrong. When a Tom and Carol are lucky. They only have to spend $1,000 per month for repairs and replacements. This includes spoilage, loss, theft, and wastage.
$1,000 per month spoilage, maintenance, loss, and wastage for 12 month is $12,000 per year.
Each year Tom and Carol have to pay legal fees to make sure everything stays legal. They also have to pay an accountant. Then, there are registration fees with the state, county, and city. The estimate is $50,000 per year.
$50,000 per year for legal, accounting, and registration
There are always things that come up. Just to keep these miscellaneous expenses simple, we will say that they come to $1,000 per year.
Tom and Carol have not paid themselves yet. They have not supported any charities yet. Every small business is confronted almost every day with a worthwhile charity. The baseball team needs to be sponsored. The Boy Scouts need money. The local schools all need to have sponsors for their yearbook.
We will assume that Tom and Carol donate $25,000 per year to local charities. This now brings the total outlay to $225,000 per year and Tom and Carol still have not made a single penny.
|Wages ||29,000 |
|Rent ||36,000 |
|Utilities ||60,000 |
|Insurance ||12,000 |
|Maintenance and Loss||12,000 |
|Legal fees, Accounting, State Fees, Licenses etc.||50,000 |
|Miscellaneous Expenses||1,000 |
|Total yearly expenses||225,000 |
Cost to Make Burger Meal
|Hamburger Patties ||.60 |
|Hamburger Buns ||.20|
|Fixin's (lettuce, tomato, onion, pickle, etc. ||.50 |
|Conidments (Duke's Mayonnaise, ketchup, etc. ||.25 |
|Cooking ||.10 |
|Fries ||.30 |
|Soft Drink ||.25 |
|Oil, salt, and other ingredients ||.30 |
|Paper products (cup, lid, bag, wrapper, fry bag, etc.) ||.50 |
|Total Cost to make burger meal ||3.00 |
© 2008-2016 McClendon Enterprises
Website name: Redneck MBA
Article Name: Hamburger Minimum Wage
Author: David E. McClendon Sr.
Editor: Suzanne G. McClendon
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