Question
Company Background: Daily Grind Coffeehouse was founded in 2007 by two friends who love nothing more than a hot cup of joe. The company has
Company Background:
Daily Grind Coffeehouse was founded in 2007 by two friends who love nothing more than a hot cup of joe. The company has always prided itself on putting quality firstfrom the beans they brew to the knowledge and friendliness of people who serve it. Their goal has always been to be the coffee shop that makes the absolute best cup of coffee in town. They strongly believe in fair trade and donate 5% of their profits to support the communities of their farming partners. The founders are co-CEO of the company. Their professional backgrounds comprise marketing and corporate law.
Over the last 10 years, Daily Grind has managed to grow from a single storefront to a local coffee chain with eleven brick-and-mortar locations within California. Daily Grind Coffeehouses are decorated with a retro-industrial vibe. They feature art and signage that tells the story of their crop-to-cup process and educate customers on various coffee-related topics. This privately-held LLC offers premium coffee beverages and breakfast items.
Each of their cafs average $2,750 in sales per day, with some locations performing much higher than others depending on location, square footage and whether or not they have a drive-thru (all but two locations do). The average transaction is $5.74. Last year, Daily Grind saw $10,900,000 in total revenue.
You are the new Chief Financial Officer who oversees the accounting department for Daily Grind, including its corporate office and all eleven locations. Your team is responsible for evaluating strategic decisions for the company and making recommendations to the co-CEOs, who fully depend on you for your accounting knowledge and professional experience. Your advice and input provide direction for the company so that Daily Grind can continue to grow its profits and ultimately expand nationally.
Prompt
Based on your reading of the companys background and Chapters 16 and 17, Job Order and Process Cost Systems, please determine whether the accounting department of Daily Grind should use a job order or process cost system to account for the beverages made and sold. Support your opinion with the facts that you read about in Chapters 16 and 17.
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