Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The exam MUST have the following components ' ONE word file answering all of the case questions (for the quantitative questions, you can put refer

The exam MUST have the following components

' ONE word file answering all of the case questions (for the quantitative questions, you can put "refer to attached Excel file").

ONE excel file that includes the calculations for the quantitative questions

The submission should be of a professional quality, and this is an INDIVIDUAL exam that must be done INDIVIDUALLY. Tests will be compared and put through TURNITIN.

Your report should be NO MORE than 4 pages (single-spaced, size 12 font, Times New Roman). Your excel files should be neatly formatted.

Exam Questions:

You MUST answer the following questions for the exam based on the case:

Question 1. Explain which of the proposed business expansion strategies are consistent with OSI's strategic focus? (25% of mark)

Question 2. Calculate the variances from budget for Sushi Prince (MUST be done in Excel) (25% of mark)

Question 3. Explain the reasons behind the variances for Sushi Prince, using case facts. (25% of mark)

Question 4. For Appendix Ill, calculate the optimal production of the three products and the profitability at that production level. (MUST be done in Excel) (10% of mark)

Overall professionalism, grammar, spelling, writing quality (15% of mark)

ONTARIO SUSHI INC.

It is now October 19, 2018 and you, CPA, are a manager with Yorkville Consultants. You have recently been hired to provide consulting advice to Ontario Sushi Inc. (OSI). Jeff Fung is the sole owner of OSI's shares and manages overall operations.

OSI has operated award-winning Japanese restaurants in Toronto for the past ten years. OSI's mission has always been to provide the ultimate dining experience by serving the highest quality and freshest ingredients, with the widest variety of regular and exotic items on its menu, all provided with impeccable service in an authentic Japanese setting.

OSI's key success factors include focusing on activities at which it excels. For example, Jeffs best friend, Brandon Ling, manages the restaurants and has over 20 years of experience. As well, Jeff was an award-winning chef at an exclusive Japanese restaurant for many years before opening OSI. Another key to OSI's success has been maintaining strong relations with only a few key suppliers of seafood, meats, and poultry for many years has generated strong loyalty in terms of efficient service and delivery. This has allowed OSI to obtain the best quality and selection of items to serve in its restaurants.

A few weeks ago, Brandon raised the possibility of expanding OSI's core operations. Jeff has briefly looked at the proposals but wants you to evaluate these proposals to assess the consistency with the company's strategic focus that has allowed OSI to be so successful to date. You met with Brandon to discuss the proposed expansion ideas and your notes from the meeting are provided in Appendix l.

Jeff mentioned that one of his restaurants has not been as profitable as budgeted. Jeff would like you to prepare an analysis of the variances and explain the reasons for the cause of the variances. You met with Jeff and your notes from the meeting are provided in Appendix ll.

During the year, Jeff inherited a food preparation business. The business is completely independent of OSI's core restaurant operations. The food items are prepared in a factory and sold in local supermarkets. Additional information on this business is provided in Appendix Ill.

I

BRANDON LING'S PROPOSED EXPANSION IDEAS

Fish Processing and Distribution Plant

"On a few occasions recently, we refused seafood and meats that were not fresh. There is an existing fish plant for sale that is located relatively close to our restaurants. One of the key risks with any food processing plant is the risk of food contamination."

OSI Retail Store

"We want to consider selling the 20 most popular menu items through a retail store to reach a wider range of customers. We think that this is a good cross-selling opportunity because it is another way to bring more customers to our restaurant.

"We would not have any on-site sushi chefs. Instead, the food items would be prepared ahead of time and shipped to the store. In the event of potential shortages, food can be prepared at any of the restaurants and shipped to the store within one hour. For cost and logistical reasons, we would not be selling any of the exotic items that set our restaurants apart from others.

"The food items for the day would be prepared early in the morning and completed by 9:00 am. Then the items would be shipped to the store by 10:30 am. The store would be open from 1 1am to 8:00 pm with items sold from static display cases. At the end of the day, any unsold items would be disposed of, or given to a homeless shelter, since fresh sushi only has a one-day shelf

Il

NOTES FROM MEETING WITH JEFF FUNG

One of Fung's Toronto restaurants, Sushi Prince, is not meeting profit expectations. Jeff provided the following excerpts from the budget for Sushi Prince for the last month:

Meals sold13,500

Sales$377,500

Ingredients cost per meal$11.00

Variable overhead per meal$3.00

Jeff provided the following excerpts based on the actual results for the month.

Meals sold13,255

Meals prepared13,613

Average sales price per meal$23.50

Ingredients cost per meal$11.75

Variable overhead per meal$2.90

Jeff mentioned that the economy is weakening and he is finding that customers are reacting by eating out less frequently and reducing the amount that they spend on meals, but Jeff thought that he had incorporated this into his budget. A new Mexican restaurant, Taco Tuesdays, opened down the street from Sushi Prince at the beginning of the month and Jeff is convinced that this is the main cause of the variances from budget. Servers were complaining that there were less customers as a result.

Jeff mentioned that a few suppliers had increased their prices of some of the more exotic items served on the menu as these items are becoming harder to procure. There have also been several issues with errors in meal preparation due to server carelessness or incorrect orders being prepared in the kitchen. The city implemented new rebates on the cost of some utilities during the month.

Ill

INHERITED FOOD PREPARATION BUSINESS

The factory produces three major items: sushi platters, sashimi platters, and bento boxes. The items are mass-produced with emphasis placed on efficiency over quality. Bento boxes are the best-selling item and are popular with customers because they combine a variety of foods in one meal.

SushiSashimiBento

PlattersPlattersBoxes

Expected sales80,00090,000100,000

Selling price$12.00$14.00$15.00

Material costs4.005.004.80

Variable overhead1.400.901.00

Direct labour hours0.200.150.30

Identifiable fixed costs pertaining to the three items being produced totals $450,000 per year, which is traceable as follows: 28% for sushi platters, 40% for sashimi platters, and 32% for bento boxes. Identifiable fixed costs would not be incurred if production of that product ceases.

The factory is currently operating at maximum capacity because of a constraint on labour hours. It is not possible to hire additional employees due to a lack of physical space on the factory floor. There is no desire to expand the size of the factory at this point in time. There are an equivalent of 10 full-time employees who work 8 hours per day, 350 days per year at an average wage of $15 per hour. Currently, labour hours are allocated as follows: 10,000 sushi platter; 6,000 sashimi platter; and 12,000 bento boxes.

Jeff would like you to determine the optimal production for the three products and the company's profitability at that production level.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems

Authors: Robert Hurt

4th Edition

78025885, 78025884, 9781259293795 , 978-0078025884

More Books

Students also viewed these Accounting questions

Question

Will other people benefit if I act according to this value?

Answered: 1 week ago

Question

2. Value-oriented information and

Answered: 1 week ago

Question

1. Empirical or factual information,

Answered: 1 week ago

Question

1. To take in the necessary information,

Answered: 1 week ago