Business application, Managerial Accounting

Assignment Help:

Conceptual understanding: defining in identifying relevant information


Business application - Dave burgers is in the fast food restaurant business. One component of it's marketing strategy is to increase sales by expanding and foreign markets. It uses both financial and nonfinancial quantitative and qualitative information when deciding whether to open restaurants abroad. Big decided to open a restaurant in Prague(Czech Republic) five years ago. The following information help the managers in making that decision:

Financial quantitative information
- operating information
-estimated food, Labor, and other operating costs(E. G., Taxes, insurance, utilities, and supplies)
-Estimated selling price for each food item.
-Capital investment information.
- Cost of land, building, equipment, and furniture.
-Financing options and amounts.


Nonfinancial quantitative information
-Estimated daily number of customers, hamburgers to be sold, employees to work.
-High traffic time periods.
- Income of people living in the area.
-Ratio of population to number of restaurants in the market area.
-Traffic counts in front of similar restaurants in the area.

Qualitative information
-Government regulations, taxes, duties, tariffs, political involvement in business operations.
-Property ownership restrictions.
-Site visible inability.
-Accessibility of store location.
-Training process for local managers.
-Hiring process for employees.
-Local customs and practices.


Big Burgers has hired you as a consulant and given you an income statement comparing the operating incomes of its five restaurants in Eastern Europe. You have notices that the Prague location is operating at a loss (including unallocated fixed costs) and must decide whether to recommend closing that restaurant.


Review the information used in making the decision to open the restaurant. Identify the type of information that would also be relevant in deciding whether to close the restaurant. What additional information would be relevant in making your decision?

 


Related Discussions:- Business application

CVP, What is cvp?

What is cvp?

Factoring, Receivable management is a specialized activity and needs variou...

Receivable management is a specialized activity and needs various time and effort on the part of the firm. Collection of receivables frequently poses problems, mainly for small and

Compute the value of share of a company, Compute the value of share of a co...

Compute the value of share of a company? A company paid dividend amounting to Rs. 0.75 each share during the last year. The company is supposed to pay Rs. 2.00 per share throug

Linear Programming, Explain with examples five areas where linear programmi...

Explain with examples five areas where linear programming can be applied in Managerial accounting

Explain the stock turnover ratio, Stock turnover ratio  Meaning: thi...

Stock turnover ratio  Meaning: this ratio establishes a relation ship between costs of goods sold and average inventory. Objective: the objective of component of this r

Capital budgeting – planning investments, Project C would involve a current...

Project C would involve a current outlay of $50,000 on equipment and $15,000 on working capital. The investment in working capital would be increased to $21,000 at the end of the f

Determine the zero bases budgeting according to leonard mere, Determine the...

Determine the Zero bases budgeting According to Leonard mere According to Leonard mere,  ZBB is a technique which complements and links the existing planning budgeting and revi

Difference between marginal costing and absorption costing, Question: A...

Question: A friend of yours is revising for his examination in management accounting and needs some help from you. He asks you the following questions. Write brief notes on eac

Job-order costing, #quesXERCISE 3-15 Departmental Overhead Rates [LO1, LO2,...

#quesXERCISE 3-15 Departmental Overhead Rates [LO1, LO2, LO3] Diewold Company has two departments, Milling and Assembly. The company uses a job-order costing system and computes a

Difference between direct labour and indirect labour, Difference between Di...

Difference between Direct labour and Indirect labour Direct labour:- Labour which plays an active and direct part in the production of a particular commodity is called di

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd