Clayman's Delicious Treats is a gourmet dessert restaurant in New York. Sharron Clayman, the sole proprietor, expanded to a second location in Buffalo, 3 years ago. Recently, Clayman decided to enroll in a PhD program and retire from active management of the individual restaurants but continues to oversee the entire company. She hired a manager for each restaurant. (Click the icon to view the additional information.) Read the requirements. In 203, each had sales of $950,000. The Buffalo restaurant is still pricing lower than the New York restaurant to establish a customer base. Variable expenses run 65% of sales for the New York restaurant and 70% of sales for the Buffalo restaurant. Each manager is responsible for the rent and some other fixed costs for his or her restaurant. These costs amounted to $105,000 for the New York restaurant and $85,000 for the one in Buffalo. The difference is primarily due to lower rent in Buffalo. In addition, several costs, such as advertising, legal services, accounting, and personnel services, were centralized. The managers had no control of these expenses, but some of them directly benefited the individual restaurants. Of the $335,000 cost in this category, $125,000 related to New York and $160,000 to Buffalo, where most of the additional cost in Buffalo is due to the cost of extra advertising to build up its customer base. The remaining $50,000 was general corporate overhead. Requirements 1. Prepare income statements for each restaurant and for the company as a whole. Use a format that allows easy assessment of each manager's performance and each restaurant's economic performance. 2. Using only the information given in this exercise do the following: a. Evaluate each restaurant as an economic investment. b. Evaluate each manager. Get more help - Clayman's Delicious Treats is a gourmet dessert restaurant in New York. Sharron Clayman, the sole proprietor, expanded to a second location in Buffalo, 3 years ago. Recently, Clayman decided to enroll in a PhD program and retire from active management of the individual restaurants but continues to oversee the entire company. She hired a manager for each restaurant. (Click the icon to view the additional information.) Read the requirements. In 203, each had sales of $950,000. The Buffalo restaurant is still pricing lower than the New York restaurant to establish a customer base. Variable expenses run 65% of sales for the New York restaurant and 70% of sales for the Buffalo restaurant. Each manager is responsible for the rent and some other fixed costs for his or her restaurant. These costs amounted to $105,000 for the New York restaurant and $85,000 for the one in Buffalo. The difference is primarily due to lower rent in Buffalo. In addition, several costs, such as advertising, legal services, accounting, and personnel services, were centralized. The managers had no control of these expenses, but some of them directly benefited the individual restaurants. Of the $335,000 cost in this category, $125,000 related to New York and $160,000 to Buffalo, where most of the additional cost in Buffalo is due to the cost of extra advertising to build up its customer base. The remaining $50,000 was general corporate overhead. Requirements 1. Prepare income statements for each restaurant and for the company as a whole. Use a format that allows easy assessment of each manager's performance and each restaurant's economic performance. 2. Using only the information given in this exercise do the following: a. Evaluate each restaurant as an economic investment. b. Evaluate each manager. Get more help
