Caribbean Internet Cafe

795 Words Dec 18th, 2014 4 Pages
1

Caribbean Internet Café

Performance Management and
Control, ACC 287.5
David E. Platt, Ph.D.

Caribbean Internet Café
Primary Case-Study Objectives

2





Observe the diversity of business measurement issues.
Introduce fundamental costing issues.
Identify strategic and non-financial issues that are critical for decision making.

Caribbean Internet Café
Cost Summary

3



Here is a listing of costs to be incurred (pg. 3-4). How can we organize this data in a useful way?

Equipment
Waiter-tutors
Manager
Building lease
Utilities
Utility deposit
Internet link
Internet service
Insurance
Advertising, mktg, promo
Pre-opening advertising
Other up-front costs
Miscellaneous admin/main

Usage
Qty
Unit from Exhibit 1
180 hrs/wk
1 per month
1
…show more content…
Jamaica $
One-Time Costs
Utility deposit
Pre-opening advertising
Other up-front costs
Total

Least

Most



J$

J$

7,000
20,000
120,000
147,000

Fixed Costs
Waiter-tutors
J$
Advertising, mktg, promo J$
Miscellaneous admin/main J$
Utilities
J$
Insurance
J$
Manager
J$
Internet link
J$
Building lease
J$
* Loan interest
J$

40
10,000
50,000
15,000
10,000
40,000
10,000
30,000
1,250,000

Cost
Unit

per hour (x 180 x 52) per month per month per month per month per month per month per month at 10% "concessionary rate"

What about investment in equipment?

Annualized

J$
J$
J$
J$
J$
J$
J$
J$
J$

374,400
120,000
600,000
180,000
120,000
480,000
120,000
360,000
125,000

Caribbean Internet Café
Fixed Costs

6



Depreciation is annual fixed cost.
Investment
General equipment
Hardware and software
Furniture and artwork
China and flowers
Total (exhibit 1)

J$

J$

Jamaica $
Fixed Costs
Waiter-tutors
Advertising, mktg, promo
Miscellaneous admin/main
Utilities
Insurance
Manager
Internet link
Building lease
* Loan interest
** Depreciation
Total

J$40
J$10,000
J$50,000
J$15,000
J$10,000
J$40,000
J$10,000
J$30,000
J$1,250,000

Est 'd Life (yrs)

573,250
407,750
340,000
105,000
1,426,000

Annualized

5 J$
3
10
2
J$

Cost
Unit
per hour (x 180 x 52) per month per month per month per month per month per month per month at 10% "concessionary rate" from above

114,650
135,917
34,000
52,500
337,067

Annualized
374,400
120,000
600,000
180,000
120,000
480,000
120,000
360,000
125,000

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