Comprehensive Decision Making

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I’m studying for my Accounting class and don’t understand how to answer this. Can you help me study?

Restaurants offer a variety of menu items which have different sizes, ingredients, packaging, and demand. In addition, made-to-order restaurants go one step further and may have different renditions of the same 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 not contain one of three types of salsa, could have cheese or sour cream or neither, and may or may not have lettuce, black or pinto beans, or other vegetables. Combinations for that one menu item are virtually endless!

Profit margins in the restaurant industry are small, and operating costs are high.
Variances on budgeted amounts can be unwelcome interrupters in this business model. Variance analysis and budget planning are essential for survival in the business. This project option will allow you to apply your knowledge of financial analysis to the restaurant industry to problem solve and plan for the future.

  1. 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.
    1. For the restaurant chain you have selected, you will need to research and locate company information, menus, and financial information to assist you with the requirements of this project.
    2. Not every chain will have the same financial information available, so it may be necessary to generate your own “fictitious” data in order to complete the required tasks. If you do create data, be VERY CLEAR in your computations which data is taken from publicly available information (provide the sources) and which data has been generated by you.
  2. Choose 1 menu item from the menu of the restaurant. Familiarize yourself with the product including the ingredients, processing method, general selling price in your area, packaging requirements (if applicable), and accessories (straw, sweetener, fork/knife, condiments, etc.). In Module 3, you will be submitting this information as part of your Portfolio Project milestone.
  3. You have been notified by your purchasing department that the availability of one of the substantial ingredients of your menu item is impacted by an unusually cold and snowy winter for a period of at least 6 months. The cost of the ingredient will now increase by 30%. This unexpected supply chain issue has created havoc for budgeted profits and costs. Create a “before and after” computation scenario to show how the impact of this change will impact operating income assuming all other variables remain constant. (See textbook Exhibit 14-1 for a sample computation format.)
    1. In a business with slim margins, 30% is tough to absorb even on a short run basis. How might your company be able to react to the change? Are there opportunities to: offset this extra cost with a price increase, maintain gross margin, or offer the product to consumers at the same price currently? Model alternatives and present your calculations and solution in a supporting table included in your paper.
  4. A good reliable labor force is tough to find for the fast-casual restaurant industry. During the summer, the company has an easier time finding help, but when school is in session, many students are unavailable for employment. Thus, the company occasionally has to increase wages in order to attract employees. Assume the company has to increase pay by $1.25 per hour over minimum wage for the foreseeable future. Use the same “before” scenario from 3.a. and run an “after” scenario for the increased wages to show the impact on operating income.
  5. In a Microsoft Word document, develop a project for this company that will require the purchase of additional equipment, in a short-term decision-making scenario. Research the cost of this equipment and develop 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 credible academic references. All sources used, including your textbook must be referenced; paraphrased and quoted material must have accompanying citations and cited per APA guidelines.
  • Use of CSU Global Library is necessary.

ACT460 Mod 8 PP

ACT460 Mod 8 PP

Criteria Ratings Pts

This criterion is linked to a Learning OutcomeContent

50.0 to >40.0 pts

Meets Expectation

Demonstrates strong or adequate knowledge of cost accounting; correctly represents knowledge from the readings and sources.

40.0 to >30.0 pts

Approaches Expectation

Some significant but not major errors or omissions in demonstration of knowledge.

30.0 to >20.0 pts

Below Expectation

Major errors or omissions in demonstration of knowledge.

20.0 to >0 pts

Limited Evidence

Fails to demonstrate knowledge of the materials.

50.0 pts

This criterion is linked to a Learning OutcomeRequirements

50.0 to >40.0 pts

Meets Expectation

The Portfolio includes all of the required components, as specified in the assignment.

40.0 to >30.0 pts

Approaches Expectation

The Portfolio includes most of the required components, as specified in the assignment.

30.0 to >20.0 pts

Below Expectation

The Portfolio includes some of the required components, as specified in the assignment.

20.0 to >0 pts

Limited Evidence

The Portfolio includes few of the required components, as specified in the assignment.

50.0 pts

This criterion is linked to a Learning OutcomeDecision-Making

50.0 to >40.0 pts

Meets Expectation

Demonstrates strong or adequate thought and insight in decision making regarding cost accounting.

40.0 to >30.0 pts

Approaches Expectation

Some significant but not major errors or omissions in decision making.

30.0 to >20.0 pts

Below Expectation

Major errors or omissions in decision making.

20.0 to >0 pts

Limited Evidence

Fails to demonstrate decision making.

50.0 pts

This criterion is linked to a Learning OutcomeSynthesis and Evaluation

50.0 to >40.0 pts

Meets Expectation

Demonstrates strong or adequate synthesis and evaluation of course concepts in cost accounting.

40.0 to >30.0 pts

Approaches Expectation

Some significant but not major errors or omissions in synthesis and evaluation.

30.0 to >20.0 pts

Below Expectation

Major errors or omissions in synthesis and evaluation.

20.0 to >0 pts

Limited Evidence

Fails to demonstrate synthesis and evaluation.

50.0 pts

This criterion is linked to a Learning OutcomeSources

30.0 to >24.0 pts

Meets Expectation

Cites and integrates at least three credible sources.

24.0 to >18.0 pts

Approaches Expectation

Cites and integrates two credible sources.

18.0 to >12.0 pts

Below Expectation

Cites and integrates one credible source.

12.0 to >0 pts

Limited Evidence

Cites and integrates no credible sources.

30.0 pts

This criterion is linked to a Learning OutcomeApplication of Source Material

35.0 to >28.0 pts

Meets Expectation

Sources well or adequately chosen to provide substance and perspectives on the issue; knowledge from the course linked properly to source material.

28.0 to >21.0 pts

Approaches Expectation

Some significant but not major problems with selection and linkage of sources.

21.0 to >14.0 pts

Below Expectation

Major problems with selection and linkage of sources.

14.0 to >0 pts

Limited Evidence

Source selection is seriously flawed; no linkage to knowledge from the course.

35.0 pts

This criterion is linked to a Learning OutcomeOrganization

20.0 to >16.0 pts

Meets Expectation

Project is clearly organized, well written, and in proper essay format, including an introduction, body, and conclusion. Conforms to project requirements.

16.0 to >12.0 pts

Approaches Expectation

Small number of significant but not major flaws in organization and writing; is in proper essay format. In a minor way does not conform to project requirements.

12.0 to >8.0 pts

Below Expectation

Major problems in organization and writing; does not completely follow proper essay format. In a significant way does not conform to project requirements.

8.0 to >0 pts

Limited Evidence

Project is not well organized or well written and is not in proper essay format. Does not conform to project requirements.

20.0 pts

This criterion is linked to a Learning OutcomeGrammar and Style

20.0 to >16.0 pts

Meets Expectation

Strong sentence and paragraph structure; few or no minor errors in grammar and spelling; appropriate writing style; clear and concise with no unsupported comments.

16.0 to >12.0 pts

Approaches Expectation

Small number of significant but not major errors in grammar and spelling; generally appropriate writing.

12.0 to >8.0 pts

Below Expectation

Inconsistent to inadequate sentence and paragraph development; work needed on grammar and spelling; does not meet program expectations.

8.0 to >0 pts

Limited Evidence

Poor quality; unacceptable in terms of grammar and/or spelling; inappropriate writing style that interferes with clarity.

20.0 pts

This criterion is linked to a Learning OutcomeDemonstrates proper use of APA style

20.0 to >16.0 pts

Meets Expectation

Project contains proper APA formatting, according to the CSU-Global Guide to Writing and APA, with no more than one significant error.

16.0 to >12.0 pts

Approaches Expectation

Few errors in APA formatting, according to the CSU-Global Guide to Writing and APA, with no more than two to three significant errors.

12.0 to >8.0 pts

Below Expectation

Significant errors in APA formatting, according to the CSU-Global Guide to Writing and APA, with four to five significant errors.

8.0 to >0 pts

Limited Evidence

Numerous errors in APA formatting, according to the CSU-Global Guide to Writing and APA, with more than five significant errors.

20.0 pts

Total Points: 325.0

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