Effects Of Opening The Catering Business

Use of the flexible budget shows the budgeted operating income given the actual sales. When you compare the flexible budget to the actual budget you are able to compare the total sales and cost incurred given the same units sold. The sales price variance, which is the actual sales less the flexible budgeted sales, was $14,700 favorable. This means that actual sales were higher than budgeted sales at that usage. This is attributable to the increase in service price from $25 to $26.40. Price variance for material usage was $2,100 over the flexible budget projection. This could be attributed to overuse or waste of materials. As expected, the direct labor price variance was $3,375 lower than the flexible budget amount. This is attributed to the manager’s effective use of labor. Operating expenses were also higher than the flexible budget

1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.

Because the absorption-costing model only deducts the fixed manufacturing overhead costs for units sold in the current period, the COO was able to show an increase in profits between 2002 and 2003. What the COO failed to report to the stakeholders on the 2003 income statement was the outstanding fixed manufacturing overhead costs for the remaining 35,000 units

Another concern identified, is the utilities expense budget for utilities in Year 9 which is $150,000. This amount is identified as a fixed amount and is unrelated to actually production activities and manufacturing efficiency. Considering that production levels and activity fluctuates throughout the year, the budget for utilities should be a variable item. An example; from Year 7 to Year 8, the utilities expenses increase by $15,000 and with this detection, ways to reduce this expense should be investigate. Another concern is a duplicated line item under the Selling, General, and Administrative Budget for Utilities and Utilities and Services. Another issue for concern, Total Variable Cost was reported to be lower; however was not enough for the lack of sales combined with an increase in advertising and transportation which resulted in an overall negative result. The low Net Sales directly impacted the Contribution Margin which decreased by $49,397. Overall, these concerns indicate the need for a flexible budget with variance analysis.

You use a perpetual inventory system and value the inventory using FIFO. Prior to making adjusting year-end entries you valued the inventory at the lower-of-cost or-market. Justify why you valued the inventory at lower-of-cost or-market.

The standard costs and variances for direct materials, direct labor, and factory overhead for the month of May are as follows:

In this analysis, we included the overhead expense for 1972-1977 because as the project begins to gain a foothold in the market it will acquire a larger market share and will become a larger portion of General Foods’ overall dessert sales. Also, the agglomerator and excess capacity was charged

In this table, it reflects the changes in fixed plant overhead from $420,000 to $378,000. The company still has the fixed selling and administrative expense per quarter of $118,000. The new company fixed overhead is now at $496,000 from the past $538,000 ($42,000) change from past to

Nevertheless, the majority of customers are very satisfied with the amount of serving along with the quality of their meal as well as the price paid. The strategy of being a low priced high value added has seen problems due to lack of customers which is affecting the bottom line drastically. This inevitable circumstance has put a hold on operations and started an investigation upon various neighboring competitors and their own strategies.

Is there a way to estimate the cost of services and product to customers such that Stuart’s Branded Foods can be competitive in their market? Use the illustrations of the two customers to demonstrate your approach. What would be the selling price per kit or per cup for each customer?

b. The inventory write down recorded, as an expense by the company is $4.4 million. It is measured at lower of cost and net realizable value. Cost is measured by weighted average using standard cost method or

...................................................10 Alternative 3 – Review Existing Locations..........................................................................................11 Alternative 4 – Expansion through Franchise Operations.....................................................................11 Alternative 5 – Expand Catering Segment ...........................................................................................12 Recommendations and Action Plans .......................................................................................................12 Recommendations ..............................................................................................................................12 Action Plans .......................................................................................................................................13 Contingency Plan ...................................................................................................................................14 Attachments ...........................................................................................................................................15 Exhibit 1.............................................................................................................................................15 Exhibit 2.............................................................................................................................................16

Short-Term: To build and maintain sales in the current catering market it serves while controlling its sales and marketing overheads

The cost factor is one of the major concerns for Benihana’s growth. Each new unit costs $300,000. In order to reduce the startup cost, Benihana must find revisit its operating model and re-evaluate what is the most important to the customers. Looking back at exhibit 4, majority of respondents valued quality and taste of the food, service and preparation of food. These are the qualities that truly separate Benihana from other restaurants. Changing Benihana’s staffing model, including training, and the use of materials and labor from Japan, will most certainly minimize new unit cost.

Who’s Cookin’ is a catering business that launched in 1975 that serves customers with great food and service for their event needs. Operating in 5 different locations in South East Brisbane, the business is looking to expand to 10 different locations across other cities in the near future. Who’s Cookin’ has however been gradually declining over the past few years as the business is obsolete when it comes to customers wanting efficient and time-saving solutions when ordering for catering services. The business have manual cashiers that take a lot of time to use for cashiers, and have no reliable resources to store data of orders when filing. In order for the business to improve and update, a bank loan of $100,000 has been applied from Who’s Cookin’ to transform the business with 21st century technology to potentially own the latest Information and Communications Technology (ICT), Information Systems (IS), and Computer Based Information Systems (CBIS). This enhancement will allow Who’s Cookin’ to have digitalized cash registers, computer devices for storing important business data, fund local TV advertisements, and even sustain funding a website and phone application for customers to order online. The business will run more time efficiently if the company technology was improved. It would also increase productivity and improve customer satisfaction overall.