"Where's the Beef??" (An exercise based on 2005 data, (updated for current cost estimates), from "Wendy's Chili: A Costing Conundrum", a case study by Richard Brownlee, professor at University of Virginia - Darden School of Business.) Wendy's chili is prepared daily, and we'll assume it's prepared by the assistant manager. It takes several hours of slow cooking and requires periodic stirring during cooking. Other assumptions include: It normally takes about 10 minutes to prepare a batch of chili (a batch makes 76 6-oz. servings, which are currently sold for $2.69 per serving. 48 quarter-pound hamburger patties are retrieved from the cooler (if available), which are those that have been "well done" during the last couple of days and thus not sold but set aside to use in the chili.(This took about 1 minute to retrieve the patties) 10% of the time, it is necessary to cook some new patties for use in the chili. When this occurs, the 48 patties are retrieved from the uncooked patties and cooked on the grill, taking about 10 minutes. 1 Can Crushed Tomatoes Ingredients estimates (per batch) : $5.50 per can 5 46-oz cans of Tomato Juice $2.50 per can 1 Wendy's seasoning packet $2.00 per packet 2 Cans of red beans $4.50 per can 48 cooked quarter-pound ground beef patties (12 Ibs of ground beef total) $7.00 per lb. Store Manager: Co-manager Assistant Manager Management Trainee Crew member Labor cost estimates: $1,000 per week $16.00 per hour $15.00 per hour $12.00 per hour $11.00 per hour NOTE: Payroll taxes & other employee-related costs add an average 15% to the above "Other" direct costs related to a serving of chili: Bowls: Lids: Spoons: $.06 each $.05 each $.02 each YOUR JOB: Prepare a written cost analysis (including details) for a 6-oz serving of chili including profit/loss per serving. (this can be a "full cost" or "out of pocket" approach, or whatever you deem most accurate.) In other words, what does it "REALLY" cost to make a serving of chili? (your "best estimate") ("Full cost" = ALL costs necessary to produce chili as a "stand alone" product) ("Out-Of-Pocket cost" = ONLY the additional costs necessary to produce chili given the overall Wendy's operation environment in total)