Concept explainers
Objectives of the
Domino’s Pizza L.L.C. operates pizza delivery and carry-out restaurants. The annual report describes its business as follows:
We offer a focused menu of high-quality, value-priced pizza with three types of crust (Hand- Tossed. Thin Crust, and Deep Dish), along with buffalo wings, bread sticks, cheesy bread. CinnaStix®, and Coca-Cola® products. Our band-tossed pizza is made from fresh dough produced in our regional distribution centers. We prepare every pizza using real cheese, pizza sauce made from fresh tomatoes, and a choice of high-quality meat and vegetable toppings in generous portions. Our focused menu and use of premium ingredients enable us to consistently and efficiently produce the highest-quality pizza.
Over the 41 years since our founding, we have developed a simple. cost-efficient model. We offer a limited menu, our stores are designed for delivery and carry-out, and we do not generally offer dine-in service. As a result, our stores require relatively small, lower-rent locations and limited capital expenditures.
How would a master budget support planning, directing, and control for Domino's?
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Chapter 22 Solutions
CENGAGENOW 6 TERMS ACCESS CARD 27TH ED.
- Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria's owner has determined that the shop has two major cost drivers the number of pizzas sold and the number of deliveries made. The pizzeria's cost formulas appear below: Pizza ingredients Fixed Cost Cost per per Month Pizza $ 4.50 $ 5,930 Cost per Delivery Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 620 $640 $ 408 $1,890 $740 $0.40 $ 3.20 $ 0.20 $ 1.60 In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November appear below. Actual Results Pizzas Deliveries Revenue 1,690 210 Kitchen staff Delivery person $27,600 Pizza ingredients $ 7,390 $ 5,870 Utilities. $ 890 $ 672 $ 988 $ 408 $ 1,890 $ 796 Delivery vehicle Equipment depreciation Rent Miscellaneous…arrow_forwardRest Inn provides four-star accommodations for the vacation traveler. It is located just off a major interstate freeway. There are three other competing motels at the same exit. Hotel management is preparing its budget for the busiest three-month period of the year, June through August. To differentiate themselves from the competition, Rest Inn provides a complimentary spa package for each guest stay that includes specialty shampoo, conditioner, soap, lotion, toothpaste, lavender essential oil, slippers, earplugs, and a sleep mask. Rest Inn purchases the spa package from a local vendor that puts the Rest Inn private label on the products. The hotel follows a policy of purchasing enough spa packages to ensure that 40% of next month’s bookings are in the current month’s ending inventory. Rest Inn’s sales budget for guest stays for the next quarter is as follows: June 2,100 guest stays July 2,300 guest stays August 1,900 guest stays How many spa packages should Rest Inn…arrow_forwardMilano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offeringtake-out and free home delivery services. The pizzeria’s owner has determined that the shop has two majorcost drivers—the number of pizzas sold and the number of deliveries made. Data concerning the pizzeria’scosts appear below:Fixed Cost Cost per Cost perper Month Pizza DeliveryPizza ingredients ............... $3.80Kitchen staff ....................... $5,220Utilities ............................... $630 $0.05Delivery person .................. $3.50Delivery vehicle ................. $540 $1.50Equipment depreciation ..... $275Rent ................................... $1,830Miscellaneous .................... $820 $0.15In November, the pizzeria budgeted for 1,200 pizzas at an average selling price of $13.50 per pizzaand for 180 deliveries.Data concerning the pizzeria’s operations in November appear below:Actual ResultsPizzas ................................... 1,240Deliveries…arrow_forward
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- Why Does It Matter? MACS CUSTOM CATERING, Eugene, Oregon Macs Custom Catering, an award-winning catering business located in Eugene, Oregon, specializes in providing only the best for you and your guest. Macs Custom Catering has been in business for over 30 years and is experienced in providing catering services at weddings, corporate events, and large sit-down events. It offers several signature buffet options, including Northwest Bounty, Hawaiian Luau, and Italian Fest. Imagine that you have been hired to set up the accounting system for a catering business such as Macs. What accounts would be included in the chart of accounts? As you list the accounts, identify the type of account. Is the account an asset, a liability, or owners equity?arrow_forwardBuffalo BBQ Restaurant is trying to become more efficient in training its chefs. It is experimenting with two training programs aimed at this objective. Both programs have basic and advanced training modules. The restaurant has provided the following data regarding the two programs after two weeks of implementation: Training Program A Training Program B New chef # 1 2 3 4 5 6 7 8 9 10 Hours of basic training 24 26 26 19 25 22 23 29 29 21 Hours of advanced training 6 7 8 12 9 3 2 0 1 4 Number of chef mistakes 14 15 14 15 13 5 7 9 4 6 a. Compute the following performance metrics for each program: (1) Average hours of employee training per chef, rounded to one decimal place. (2) Average number of mistakes per chef, rounded to one decimal place.arrow_forwardAnalyze El Pollo Loco Holdings, Inc. El Pollo Loco Holdings, Inc. (LOCO), Spanish for “The Crazy Chicken,” operates almost 500 restaurants, approximately 40% of which are company-owned and the rest are franchises. El Pollo Loco combines the culinary traditions of Mexico and California, creating unique menu items such as their signature Chicken Avocado Burrito. The company aims to improve profitability, in part, by simplifying operations to make it easier for employees and franchisees to run the restaurants. Recent data (in millions) for company-operated and franchised restaurants are as follows: Line Item Description Company-Operated Franchised Revenues $374 $29 Operating income 62 1 Invested assets 79 2 a. Determine the profit margin for each segment. Round to one decimal place. Line Item Description Profit margin Company-Operated fill in the blank 1% Franchised fill in the blank 2% b. Determine the investment turnover for each segment. Round to two decimal…arrow_forward
- Zara Catering Enterprise (ZCE) provides catering services for customers around Selangor, Malaysia. The services are categorized into two segments namely, (1) Budget package and (2) Premium package. Information on the menu for the two packages are as below: Budget Package Menu Cost Premium Package Menu Cost RM RM White rice 1.00 2 choices of rice White rice/ briyani/ nasi minyak 2.00 Fried chicken 3.50 2 choices of main dishes Chicken/ meet/ fish 7.00 Vegetable 1.00 2 choices of vegetables 2.00 Fruit 1.00 2 choices of fruits 2.00 Drinks 1.00 Beverages 1.00 Dessert 0.50 Desserts 1.00 ZCE uses job order costing method in calculating its cost of providing services based on customers’ orders. Labors are paid on the daily basis when ZCE have…arrow_forwardResource Usage Model, Special Order Ehrling, Inc., manufactures metal racks for hanging clothing in retail stores. Ehrling was approached by the CEO of Carly's Corner, a regional nonprofit food bank, with an offer to buy 350 heavy-duty metal racks for storing canned goods and dry food products. While racks normally sell for $245 each, Carly's Corner offered $75 per rack. The CEO explained that the number of families they served had grown significantly over the past two years, and that the charity needed additional storage for the donated food items. Since Ehrling is operating at 80 percent of capacity, and Ehrling employees have "adopted" Carly's Corner as their annual charity, the company wants to make the special order work. Ehrling's controller looked into the cost of the storage racks using the following information from the activity-based accounting system: Activity Rate** Unused Quantity Activity Driver Capacity Demanded* Fixed Variable Direct materials Number of racks 350 $82…arrow_forwardResource Usage Model, Special Order Ehrling, Inc., manufactures metal racks for hanging clothing in retail stores. Ehrling was approached by the CEO of Carly’s Corner, a regional nonprofit food bank, with an offer to buy 350 heavy-duty metal racks for storing canned goods and dry food products. While racks normally sell for $245 each, Carly’s Corner offered $75 per rack. The CEO explained that the number of families they served had grown significantly over the past two years, and that the charity needed additional storage for the donated food items. Since Ehrling is operating at 80 percent of capacity, and Ehrling employees have “adopted” Carly’s Corner as their annual charity, the company wants to make the special order work. Ehrling’s controller looked into the cost of the storage racks using the following information from the activity-based accounting system: Activity Rate** Activity Driver UnusedCapacity QuantityDemanded* Fixed Variable Direct materials Number of racks 0…arrow_forward
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