3. Basil Bakal is the newly appointed food and beverage director at Telco Industries. Telco creates and markets software apps developed for use with iPods. The company has 500 employees and operates its own cafeteria and executive dining room, where it daily offers free lunches to all employees. (17 points) Basil's employee cafeteria serves between 375 and 425 lunches per day. Approximately 50 more meals per day are served in the executive dining room. Basil has created his own modified version of a P&L for use in his operation. Calculate the percentages of meals served in the employee cafeteria and executive dining room and the costs per meal served, and then answer the questions that follow. A. How much more did it cost (cost of sales per meal) Basil to serve a meal in the executive dining room than it did in the employee cafeteria? Why do you think that would be so? Answer: Why: B. Basil's modified P&L combines all labor costs when calculating cost per meal served. Why do you think he elected not to allocate labor costs between the two serving areas? How could he do so? Answer: How: C. Assume you were on the board of directors of Telco. How would you decide how much more money you should allocate to Basil's area next year to account for rising food prices? Who would you expect to provide you with the information you need to make an informed decision about the appropriate size of this increase? Answer: Who: 3. Basil Bakal is the newly appointed food and beverage director at Telco Industries. Telco creates and markets software apps developed for use with iPods. The company has 500 employees and operates its own cafeteria and executive dining room, where it daily offers free lunches to all employees. (17 points) Basil's employee cafeteria serves between 375 and 425 lunches per day. Approximately 50 more meals per day are served in the executive dining room. Basil has created his own modified version of a P&L for use in his operation. Calculate the percentages of meals served in the employee cafeteria and executive dining room and the costs per meal served, and then answer the questions that follow. A. How much more did it cost (cost of sales per meal) Basil to serve a meal in the executive dining room than it did in the employee cafeteria? Why do you think that would be so? Answer: Why: B. Basil's modified P&L combines all labor costs when calculating cost per meal served. Why do you think he elected not to allocate labor costs between the two serving areas? How could he do so? Answer: How: C. Assume you were on the board of directors of Telco. How would you decide how much more money you should allocate to Basil's area next year to account for rising food prices? Who would you expect to provide you with the information you need to make an informed decision about the appropriate size of this increase? Answer: Who
