Caribbean Internet Cafe

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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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