Problem 4 104 Chapter 3ProblemsProblem 1The total ingredient (food) cost in a recipe is $4.73; the manager desires a 37.5-percent foodcost. What is the base selling price of the item using the ingredients mark-up method?Should the manager price the item in the above example at the base selling price youcalculated? Why or why not?Problem 2The chef has precosted the recipe for an entrée and a sauce, which is one item on the menu,the food cost is $6.34. A prime ingredient multiplier of 3.72 has been established. What is thebase selling price when the prime ingredient mark-up method is used?Problem 3The Prairie Town Grill does not serve alcoholic beverages. Its operating budget reveals thefollowing:RevenueFood costNon-food costsProfitNumber of guestsGuest check averageContribution margin$1,375,000$585,000$710,000$80,000161,580$8.51$790,000 (revenue - food costs)Using the above information, calculate the base selling price of a menu item with a totalingredient cost of $4.85 using:a. The contribution margin pricing method.b. The ratio pricing method.c. The simple prime costs method (note: the non-food costs include $426,250 in laborcosts).Problem 4The manager uses the mark-up with accompaniment cost method to establish a base sellingprice. What is that price when the entrée cost is $2.12, the plate cost is $1.70, and the mark-upmultiplier is 2.1?Problem 5The manager of the University Square Bistro has the following operating data available:RevenueFood costLabor costOther non-food costsDesired profitNumber of guests$1,187,000$403,580 (includes entrée costs of $274,434)$367,970$316,550 (excludes labor)$98,900107,900The Menu: The Foundation for Control 105Use the above information to establish the base selling price of a menu item with alternativepricing methods. Note: the item to be priced has a food cost of $4.57 (entrée cost = $3.12;plate cost = $1.45)a. What is the approximate base selling price using the ingredients mark-up method?b. What is the approximate base selling price using the prime ingredient mark-upmethod?What is the approximate base selling price using the mark-up with accompanimentcosts method?d. What is the approximate base selling price using the contribution margin pricingmethod?e. What is the approximate base price using the ratio pricing method?f. What is the approximate base selling price using the simple prime costs method?Problem 6Complete the menu engineering worksheet on the following page. Suggest strategies toeffectively manage each item after the worksheet is completed.

Solution As per the Q&A guideline only first question is answered Introduction Mark up…

Problem 1 The total ingredient (food) cost in a recipe is $4.73; the manager desires a 37.5-percent food Should the manager price the item in the above example at the base selling price you cost. What is the base selling price of the item using the ingredients mark-up method calculated? Why or why not? Problem ?

Problem 1 The total ingredient (food) cost in a recipe is $4.73; the manager desires a 37.5-percent food Should the manager price the item in the above example at the base selling price you cost. What is the base selling price of the item using the ingredients mark-up method calculated? Why or why not? Problem ?

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter27: Lean Principles, Lean Accounting, And Activity Analysis

Section: Chapter Questions

Problem 27.1APR

See similar textbooks

Similar questions

Question • S7.25 Zan Azlett and Angela Zesiger have joined forcesto start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processingexperience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates oflettuce and then sorting, washing, slicing, preserving, and finallypackaging the prepared lettuce. Together, with help from vendors,they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think alargely manual process will have monthly fixed costs of $37,500and variable costs of $1.75 per bag. A more mechanized processwill have fixed costs of $75,000 per month with variable costs of$1.25 per 5-pound bag. They expect to sell the shredded lettucefor $2.50 per 5-pound bag.a) What is the break-even quantity for the manual process?b) What is the revenue at the break-even quantity for the manualprocess?c) What is…
Question • S7.25 Zan Azlett and Angela Zesiger have joined forcesto start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processingexperience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates oflettuce and then sorting, washing, slicing, preserving, and finallypackaging the prepared lettuce. Together, with help from vendors,they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think alargely manual process will have monthly fixed costs of $37,500and variable costs of $1.75 per bag. A more mechanized processwill have fixed costs of $75,000 per month with variable costs of$1.25 per 5-pound bag. They expect to sell the shredded lettucefor $2.50 per 5-pound bag.a) What is the break-even quantity for the manual process?b) What is the revenue at the break-even quantity for the manualprocess?c) What is…
Lean principles for a restaurant The management of Grill Rite Burger fast-food franchise wants to provide hamburgers quickly to customers. It has been using a process by which precooked hamburgers are prepared and placed under hot lamps. These hamburgers are then sold to customers. In This process, every customer receives the same type of hamburger and dressing (ketchup, onions, mustard). If a customer wants something different, then a special order must be cooked to the customers requirements. This requires the customer to wait several minutes, which often slows down the service line. Grill Rite has been receiving more and more special orders from customers, which has been slowing service down considerably. A. Is the Grill Rite service delivery system best described as a push or pull system? Explain. B. How might you use lean principles lo provide customers quick service, yet still allow them to custom order their burgers?
AIP 4.1 Target Costing and Product Mix LO 4The Peter Paint Company makes water- and oil-based paints for houses. Recently, the firm has been investigating other opportunities. One possibility is producing ‘finger paints’ for children. Finger paints are considerably different from house paints, since they must be designed and produced to be easily washable. The marketing people at Peter Paint believe that there is an opportunity to enter this new market. They estimatethat the company could sell 1 million units of finger paints annually for $1 per unit. Questiona. How should Peter Paint use this information in making a decision to add finger paints to its product mix?
1.Make or Buy A restaurant bakes its own bread for a cost of $148 per unit (100 loaves), including fixed costs of $33 per unit. A proposal is offered to purchase bread from an outside source for $98 per unit, plus $8 per unit for delivery. Prepare a differential analysis dated July 7 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. 2. Replace Equipment A machine with a book value of $246,600 has an estimated six-year life. A proposal is offered to sell the old machine for $216,500 and replace it with a new machine at a cost of $282,700. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $49,400 to $39,500. Prepare a differential analysis dated October 3 on whether to continue with the…
Question 2: Zeroll Ice Cream company produces and sells premium ice cream cones in Coles supermarkets. The following table shows selling price and cost information of ice cream cones: Price per cone: $ 5.00 Variable cost per cone:Ingredients $1.35Direct labour $0.45Overhead $0.20Fixed cost per month $3,000Required: a. Calculate the breakeven point in units and in dollars. Click or tap here to enter text.b. The company’s general director has determined a target profit of $6,000 for next year. Given the price and cost information above, what are the required sales in units and in dollars for the company to achieve this target? Click or tap here to enter text.c. Calculate Zeroll’s new break-even point (in units and in dollars) for each of the following independent scenarios:  Selling price decreases by $0.50 per cone. Click or tap here to enter text. Fixed costs decrease by $300 per month. Click or tap here to enter text. Variable costs increase by $0.50 per cone Click or tap here to…
Ch. 7 Incremental Analysis Pg 461 Self Practice Please solve the following questions and provide and explanation. Thank you "Big Tent Company has received a special order for 10,000 units at a discount price of $100 each. The product sells for $150, has the following manufacturing costs: " Cost Per Unit Direct Materials $40 Direct Labor $ 20 Variable Manufacturing Overhead $ 20 Fixed Manufacturing Overhead $30 Totaul Unit Cost $110 1) Assume Big Top has enough extra capacity to fill the order without affecting the production or sale of it's product to regular customers. If Big Top accepts offer, what effect will the roder have on the company's short-term profit? 2) If Big Top is at full capacity, what price would be needed to cover all incremental costs, including opportunity costs?
Problem 1 a Reuben’s Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the effect on profit be? Relevant Costs Materials $0.24 Labor $0.40 Variable Overhead $0.16 Fixed Overhead (30% of $.20) $0.06 - Total Cost (30,000 Rolls Per Year) - Offer by Supplier $0.90 Total Cost (30,000 Rolls Per Year) - Continue Manufaturing $- Purchase from Supplier $- Increase/Decrease in Profit $-
Lean principles for a restaurant The management of Grill Rite Burger fast-food franchise wants to provide hamburgers quickly to customers. It has been using a process by which precooked hamburgers are prepared and placed under hot lamps. These hamburgers are then sold to customers. In This process, every customer receives the same type of hamburger and dressing (ketchup, onions, mustard). If a customer wants something different, then a special order must be cooked to the customers requirements. This requires the customer to wait several minutes, which often slows down the service line. Grill Rite has been receiving more and more special orders from customers, which has been slowing service down considerably. A. Is the Grill Rite service delivery system best described as a push or pull system? Explain. B. How might you use lean principles lo provide customers quick service, yet still allow them to custom order their burgers?
Ch. 7 Learn Smart Problem Please answer and solve and explain the problem below, please "Product ABC has a contribution margin per unit of $10.00. Each unit of ABC requires 5 minutes of machine time. Product XYZ has a contribution margin per unit of $15 and each unit requires 10 minutes of machine time. If the company's restraint is machne hours, to maximize profit they should first fill the demand for which product?"
QUESTION 4 (TOPIC 8) Nuraz Sdn Bhd (NSB) manufactures modern vase in northern areas and the price per unit is RM50. Currently, company uses absorption costing and the owner is considering to change the reporting method to variable costing. Thus, he asked the accountant to show the difference in income using both methods. To do so, the accountant rely on the information below: Production 70,000 units Beginning finished goods inventory 17,500 units Sales RM3,125,000 Direct materials RM840,000 Direct labor RM630,000 Variable manufacturing overhead RM280,000 Variable selling and administrative expenses RM700,000 Fixed manufacturing overhead RM350,000 Fixed selling and administrative RM700,000 REQUIRED: 1. Calculate ending finished goods inventory (in RM) using: Absorption costing. Variable costing. 2. Without preparing income statement, calculate the different in income reported under absorption costing and variable…
Q. 8 Which following costs need to be considered for both make or buy options? O. Fixed overhead O. Variable overhead O. Rental revenue Q. 9 What is the per unit cost to purchase from the vendor? Round to the nearest penny. Q. 10 Based on your analysis, the CreativeStationary Co. should make the product in-house or buy them from the vender? O. Make O. Buy Do (Q8,9,10 plz)