Question
Although the two restaurants are separate, they share a common kitchen. The principal costs in the kitchen are fixed, about 75%, with about 25% being
Although the two restaurants are separate, they share a common kitchen. The principal costs in the kitchen are fixed, about 75%, with about 25% being variable. The kitchen costs are currently allocated half (50%) to each restaurant. Total kitchen costs for each month were $36,000. Information from each restaurant for the last two months is as follows: One Month Prior Splashburger Soggyslice Customers served 1,500 9,000 Revenue $30,000 $90,000 Direct restaurant costs (not $17,500 $35,000 including allocated kitchen costs) Two Months Prior Customers served 8,000 1,000 Revenue $90,000 $30,000 Direct restaurant costs (not $50,000 $25,000 including allocated kitchen costs) Additional Information:
footage of restaurant 3,000 4,000 Number of Employees 17 15 Number of dining tables 45 55 Number of point of sale systems 7 2 The manager of Splashburger is saying the current allocation model for kitchen costs is unfair. Her bonus is based on the restaurants profit and she says she should only be paying for her volume, not a fixed 50%.Show all calculations on excel.
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