Welcome to Flem X (167) Dashboard - X B Homepage - ACC X Belair_Bistro.pdf X *BELAIR BISTRO C/ X *Course Hero X BELAIR BISTRO C/ X Course Hero X + V X - -> C O File | C:/Users/LENOVO/Downloads/Belair_Bistro.pdf E Belair_Bistro.pdf 2 / 5 - 71% + FINANCIAL INFORMATION - BELAIR BISTRO BELAIR BISTRO - SEGMENTED INFORMATION FOR THE YEAR ENDING 20XX TOTAL BISTRO CAFE ONLINE/DELIVERY Sales 1,675,250 1,125,000 341,250 209,000 Variable Costs 1,060,500 689,000 204,700 166,800 Contribution Margin 614,750 436.000 136,550 42,200 CM % 37% 39% 40% 20% Fixed Expenses Salaries 226,850 189,250 25,600 12,000 Advertising 10,000 7,500 2,500 Utilities 24,500 18,375 3,675 2,450 Depreciation 55,000 41,250 8,250 5,500 Insurance - Building 12,000 9,000 1,800 1,200 Manager Salary 70,000 42,000 10,500 17,500 IT Maintenance - Delivery Platform 16,000 16,000 200,400 128,625 86,725 (14,950) Note 1: The Salaries and Advertising expenses are direct and traceable costs of each segment. Note 2: These common fixed costs were allocated based on the proportion of the square footage of the building occupied by each segment The Insurance pertains to the building while the depreciation is the total of the depreciation for the building (50%), kitchen equipment (35%) and the motorcycle (1 0%). Note 3: Gabriel indicated that he estimates he spends 60% of his time working at the Bistro, 15% for the cafe, and 25% for the online delivery platform. His salary was allocated based on this basis. 2 ADDITIONAL INFORMATION ABOUT THE RESTAURANT & ALLOCATION BASIS: Plan of the restaurant: KITCHEN BACK OFFICE 10 %% of square footage BISTRO 75 %% of square footage CAFE 15 %% of square footage 3 MAIN ENTRANCE As the kitchen is shared between all 3 units, the % of square footage was computed based on the relative proportion of all 3 segments, excluding the kitchen. PDF Belair_Bistro.pdf Show all X Type here to search 65% 19.C Cloudy ~ (7. .) ENG 3:35 PM 10/7/2021Welcome to Flem X (167) Dashboard - X B Homepage - ACC X Belair_Bistro.pdf X *BELAIR BISTRO C/ X *Course Hero X BELAIR BISTRO C/ X Course Hero X + V X - -> C O File | C:/Users/LENOVO/Downloads/Belair_Bistro.pdf E Belair_Bistro.pdf 3 / 5 - 71% + SITUATION 2 - MAKE OR BUY A PRODUCT Pierre, the pastry chef of Belair Bistro indicates that he has been approached by Le Louvre Bakery. Le Louvre indicated that they could bake all the 150 croissants the cafe needs daily for a cost of $1.15 per croissant. Pierre is considering this offer as croissants are very time consuming. They take on average 3 hours of his time to make each morning. He feels that he could use this time to make some pies and cakes that can be sold at the cafe. Pierre has summarized the information from the offer below: Offer from Le Louvre: To bake 150 croissants each day at $1.15 per unit. A daily delivery charge of $40 would be applied. Any change to the quantity ordered needs to be communicated at least 48 hours in advance. A change in the order quantity would result in a $15 administrative charge. The current terms are valid for | year, at which point the contract can be renegotiated. The current direct materials of making the croissants is $0.95. The variable costs associated with the croissants are estimated at 10 cents per croissant. Pierre is not paid on an hourly basis, so cutting the croissant line would not affect the salary expense. Pierre believes that he could make 25 pies with the time he would save by no longer making croissants. On average, the pies would provide a contribution margin of $3.5 per pie. Pierre is very excited about this opportunity as he feels that making pies allows him to be much more creative than making 2 croissants. Pierre also indicated that the croissants use a special oven that could be sold as it would no longer be needed. The oven was purchased six years ago for $8,500. However, as there is not a large re-sale market for used bakery stoves, Pierre estimates that they could only get $2,500 if they sold it today. REQUIRED: I. Identify the relevant costs to the make or buy decision of the croissants. Prepare a computation to identify the gain / loss that would result from outsourcing the croissant production to Le Louvre. 2. What qualitative factors would you consider in this decision? 3 PDF Belair_Bistro.pdf Show all X Type here to search 65% 19.C Cloudy ~ (7 4) ENG 3:35 PM 10/7/2021