I’m working on a accounting Essay and need a sample draft to help me understand better.
Restaurants offer a variety of menu items which have different sizes,ingredients, packaging, and demand. In addition, made-to-orderrestaurants go one step further and may have different renditions of thesame menu items based on how a customer orders them. Take for example,Chipotle Mexican Grill, for the same price, steak tacos could be”crispy” or “soft”, may have white, brown, or no rice, may or may notcontain one of three types of salsa, could have cheese or sour cream orneither, and may or may not have lettuce, black or pinto beans, or othervegetables. Combinations for that one menu item are virtually endless!
Profit margins in the restaurant industry are small, and operating costs are high.
Varianceson budgeted amounts can be unwelcome interrupters in this businessmodel. Variance analysis and budget planning are essential for survivalin the business. This project option will allow you to apply yourknowledge of financial analysis to the restaurant industry to problemsolve and plan for the future.
- Select a nationally recognized fast casual restaurant chain that offers made-to-order menu items, except a restaurant primarily engaged in making pizza. Some examples would be Chipotle Mexican Grill, Five Guys, Noodles Co., Panera Bread, and Dunkin Donuts.
- For the restaurant chain you have selected, you will need toresearch and locate company information, menus, and financialinformation to assist you with the requirements of this project.
- Not every chain will have the same financial information available,so it may be necessary to generate your own “fictitious” data in orderto complete the required tasks. If you do create data, be VERY CLEAR inyour computations which data is taken from publicly availableinformation (provide the sources) and which data has been generated byyou.
- Choose 1 menu item from the menu of the restaurant. Familiarizeyourself with the product including the ingredients, processing method,general selling price in your area, packaging requirements (ifapplicable), and accessories (straw, sweetener, fork/knife, condiments,etc.). In Module 3, you will be submitting this information as part ofyour Portfolio Project milestone.
- You have been notified by your purchasing department that theavailability of one of the substantial ingredients of your menu item isimpacted by an unusually cold and snowy winter for a period of at least 6months. The cost of the ingredient will now increase by 30%. Thisunexpected supply chain issue has created havoc for budgeted profits andcosts. Create a “before and after” computation scenario to show how theimpact of this change will impact operating income assuming all othervariables remain constant. (See textbook Exhibit 14-1 for a samplecomputation format.)
- In a business with slim margins, 30% is tough to absorb even on ashort run basis. How might your company be able to react to the change?Are there opportunities to: offset this extra cost with a priceincrease, maintain gross margin, or offer the product to consumers atthe same price currently? Model alternatives and present yourcalculations and solution in a supporting table included in your paper.
- A good reliable labor force is tough to find for the fast-casualrestaurant industry. During the summer, the company has an easier timefinding help, but when school is in session, many students areunavailable for employment. Thus, the company occasionally has toincrease wages in order to attract employees. Assume the company has toincrease pay by $1.25 per hour over minimum wage for the foreseeablefuture. Use the same “before” scenario from 3.a. and run an “after”scenario for the increased wages to show the impact on operating income.
- In a Microsoft Word document, develop a project for this companythat will require the purchase of additional equipment, in a short-termdecision-making scenario. Research the cost of this equipment anddevelop an expectation regarding the cost savings for the company.Describe it fully and compute an incremental analysis for the company.Present your calculations in a supporting table included in your paper.
Your paper should meet the following requirements:
- Minimally 7-10 pages in length (not including the title page and the reference page).
- Assignment should follow APA guidelines with respect to use of subheadings, 1″ margins, and double spacing.
- References should include your textbook plus 2 additional credibleacademic references. All sources used, including your textbook must bereferenced; paraphrased and quoted material must have accompanyingcitations and cited per APA guidelines.
- Use of CSU Global Library is necessary.