Case Scenario 2 Tina Martello, RS is responsible for completing a profit and loss statement for Happy Valley School Child Nutrition program at the end of each month. In early June, as she calculates food costs for May, she realizes that the cost of food used has increased although the number of meals has not. Further investigation shows that monthly inventories shows costs have risen dramatically. Cost of Food Used March April (15 serving days) (20 serving days) $4456 $4506 $16500 $16890 $4506 $4180 May (21 serving days) $4180 $17135 $3500 Beginning Inventory Purchases Ending Inventory Cost of Food Used Number of Meals Food Cost per Meal 7, 360 6 ,400 7,728 Tina sets up a meeting with John, the storeroom clerk, and Maggie, the Production Supervisor to discuss her findings and concerns. Tina asks John to explain how he takes end-of-the month inventories, John explains that he does not have time to take a complete inventory because he's had to fill in for several employees recently, and that he did his best based on how much time he has. He explains that he makes sure to always check the expensive stuff. Tina then asks Maggie to explain what she does with leftover food, and how she handles ordering products. Maggie explains that she frequently cleans out the freezers and throws out items that have expired. She also said that she threw out some items from the refrigerators recently too, because they looked bad. Hearing all this, Lisa decides to go back to her office to think about it before addressing this issue with Maggie and John. On her way back to the office, she notices another employee carrying a partially full black plastic back towards his car. Scenario 2 Questions 1. Calculate the cost of food used for each month. 2. Calculate the food cost per meal for each month 3. If Lisa is reimbursed $2.25 per meal by the state, calculate the monthly food cost percentage? 4. If the department goal is to break-even, is Lisa meeting this goal currently? 5. Calculate the profit and loss for each month? 6. What is the beginning inventory for June? 7. What are some possible reasons for the higher food cost? (Explain your response and justify your response) 8. What are 3-4 things Tina should address with her employees to solve this problem? Case Scenario 2 Tina Martello, RS is responsible for completing a profit and loss statement for Happy Valley School Child Nutrition program at the end of each month. In early June, as she calculates food costs for May, she realizes that the cost of food used has increased although the number of meals has not. Further investigation shows that monthly inventories shows costs have risen dramatically. Cost of Food Used March April (15 serving days) (20 serving days) $4456 $4506 $16500 $16890 $4506 $4180 May (21 serving days) $4180 $17135 $3500 Beginning Inventory Purchases Ending Inventory Cost of Food Used Number of Meals Food Cost per Meal 7, 360 6 ,400 7,728 Tina sets up a meeting with John, the storeroom clerk, and Maggie, the Production Supervisor to discuss her findings and concerns. Tina asks John to explain how he takes end-of-the month inventories, John explains that he does not have time to take a complete inventory because he's had to fill in for several employees recently, and that he did his best based on how much time he has. He explains that he makes sure to always check the expensive stuff. Tina then asks Maggie to explain what she does with leftover food, and how she handles ordering products. Maggie explains that she frequently cleans out the freezers and throws out items that have expired. She also said that she threw out some items from the refrigerators recently too, because they looked bad. Hearing all this, Lisa decides to go back to her office to think about it before addressing this issue with Maggie and John. On her way back to the office, she notices another employee carrying a partially full black plastic back towards his car. Scenario 2 Questions 1. Calculate the cost of food used for each month. 2. Calculate the food cost per meal for each month 3. If Lisa is reimbursed $2.25 per meal by the state, calculate the monthly food cost percentage? 4. If the department goal is to break-even, is Lisa meeting this goal currently? 5. Calculate the profit and loss for each month? 6. What is the beginning inventory for June? 7. What are some possible reasons for the higher food cost? (Explain your response and justify your response) 8. What are 3-4 things Tina should address with her employees to solve this