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McDonald's uses operating costing for its restaurant operations. In November 2040, the company incurs $100,000,000 in costs distributed as follows: Store Operations: $50,000,000 Food and

McDonald's uses operating costing for its restaurant operations. In November 2040, the company incurs $100,000,000 in costs distributed as follows:

  • Store Operations: $50,000,000
  • Food and Beverage: $40,000,000
  • Administration: $10,000,000

Requirements:

  • Classify each cost as fixed or variable.
  • Perform a service costing analysis for store operations and food and beverage.
  • Prepare a cost allocation schedule.
  • Analyze the impact of cost allocation on service pricing and profitability.
  • Recommend strategies to enhance service delivery and cost management.

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