NAME:
AMULE MIDDY
REG No:
S19/MUC/BBA/182
PROGRAM:
BBA TWO WEEKEND
YEAR:
TWO
SEMESTER:
TWO ADVENT
COURSE UNIT:
COST AND MANAGEMENT ACCOUNTING
LECTURER:
MR. OWINO SAMSON
ASSIGNMENT:
TWO
SOLUTIONS
a.
VARIABLE COSTS
SEMI-VARIABLE COSTS
FIXED COSTS
Beef
Electricity
Rent
Sugar
License
Tea leaves
Insurance
Tomato sauce
Salaries
Cooking oil
EQUIPMENT;
Hens
Oven
Baking flour
Tables
Chairs
Plates
Cups
Basins
Hand towels
b.
Customer segmentation is simply the process of dividing your entire customer base
into smaller groups based on similar demographics or traits.
Price:
The Restaurant should build menus and offers around customer segments based on
the price they are likely to pay. For example, office workers probably have a
smaller budget for lunch compared to families that eat at the restaurant
Service:
The type of service the restaurant offers should greatly be influenced by your
market segments. For instance, if you have a large number of young rich/wealthy
people who visit regularly, they will want a different service as compared to the
smaller number of retirees who come in occasionally. Understanding when these
two segments are likely to make an appearance is key to tuning your service to
suit.
Customer type:
You probably have far more types of customer than you think. So, sit down and
brainstorm all of the people you’ve come into contact with recently.
Look beyond leisure and business. Think about the generation in which they sit,
what lifestyle they lead and the competing restaurants they’re likely to visit when
they’re not at yours.
c.
I) total fixed cost = 𝑟𝑒𝑛𝑡 + 𝑙𝑖𝑐𝑒𝑛𝑠𝑒 + 𝑖𝑛𝑠𝑢𝑟𝑎𝑛𝑐𝑒 + 𝑠𝑎𝑙𝑎𝑟𝑖𝑒𝑠 + 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡(𝑜𝑣𝑒𝑛 +
𝑡𝑎𝑏𝑙𝑒𝑠 + 𝑐ℎ𝑎𝑖𝑟𝑠 + 𝑝𝑙𝑎𝑡𝑒𝑠 + 𝑐𝑢𝑝𝑠 + 𝑏𝑎𝑠𝑖𝑛𝑠 + ℎ𝑎𝑛𝑑 𝑡𝑜𝑤𝑒𝑙𝑠)
Total fixed cost = (1 ∗ 1,100,00) + (1 ∗ 350,000) + (1 ∗ 1,400,000) + (10 ∗ 80,000) +
[(2 ∗ 115,000) + (10 ∗ 25,000) + (20 ∗ 15,000) + (50 ∗ 2,500) + (50 ∗ 1,500) +
(4 ∗ 4,500) + 5 ∗ 2,500)]
Total fixed cost = 3,650,000 +1,003,000
Total fixed cost = 4,653,000
ii) Total semi-variable costs = 𝑒𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑖𝑡𝑦
= 1 ∗ 200,000
= 200,000
Total variable cost = 𝑏𝑒𝑒𝑓 + 𝑠𝑢𝑔𝑎𝑟 + 𝑡𝑒𝑎 𝑙𝑒𝑎𝑣𝑒𝑠 + 𝑡𝑜𝑚𝑎𝑡𝑜 𝑠𝑎𝑢𝑐𝑒 + 𝑐𝑜𝑜𝑘𝑖𝑛𝑔 𝑜𝑖𝑙 +
𝑏𝑎𝑘𝑖𝑛𝑔 𝑓𝑙𝑜𝑢𝑟 + ℎ𝑒𝑛𝑠
= (20 ∗ 10,000) + (10 ∗ 3,500) + (10 ∗ 1,000) + (10 ∗ 1,500) +
(10 ∗ 9,500) + (10 ∗ 6,000) + (10 ∗ 18,500)
= 200,000 + 35,000 + 10,000 + 15,000 + 95,000 + 60,000 +
185,000
= 600,000
Total costs = Total fixed cost + Total semi − variable costs + Total variable cost
= 4,653,000 + 200,000 + 600,000
= 5,453,000
For the 30 days, total costs = 5,453,000 ∗ 30 = 163,590,000
d.
Sales projection for month of June (30 days)
ITEMS
CUSTOMERS
AMMOUNT PER
SERVED(per day)
CUSTOMER(per
SALES
day)
Break fast
150
5,000
750,000
Take away
100
15,000
1,500,000
Lunch
150
15,000
2,250,000
Dinner
100
5,000
500,000
Supper
100
15,000
1,500,000
Chapatti and
100
1,000
100,000
TOTAL
6,600,000
samosa
For the 15 days (from 1st to 15th June),
The total sales = 6,600,000 ∗ 15 = 99,000,000
From 16th to 30th (15 days)
Commission of 5% of value of food sold
ITEMS
CUSTOMERS
AMMOUNT PER
SERVED(per day)
CUSTOMER(per
SALES
day)
Break fast
150(50+50+50)
5,000
750,000
Take away
150(50+50+50)
15,000
2,250,000
Lunch
150(50+50+50)
15,000
2,250,000
Dinner
150(50+50+50)
5,000
750,000
Supper
150(50+50+50)
15,000
2,250,000
Chapatti and
150(50+50+50)
1,000
150,000
TOTAL
8,400,000
samosa
NB: each waiter serves 50 customers daily
For the 15 days, the total sales = 8,400,000 ∗ 15 = 126,000,000
Commission = (126,000,000 − 99,000,000) ∗ 5% = 1,350,000
Each waiter or waitress makes a commission of 90,000 every day
Total sales for the month = 99,000,000 + 126,000,000
= 225,000,000
Profit = 𝑠𝑎𝑙𝑒𝑠 − 𝑐𝑜𝑠𝑡
= 223,000,000 − 163,590,000
= 61,410,000
e.
The restaurant is a viable business because a profit of 61,410,000 was made in the
month of June able to cover up for damages and other expenses.
f.
Increased sales:
Commissions encourage employees to be more self-motivated to sell to customers
and increase their own earnings, as well as aid in the growth of the business. When
employees are fairly compensated for their efforts and are rewarded for bringing
in more business, they feel more invested in helping increase sales
Flexibility for workers:
Some workers may prefer the flexibility that comes with commission-based pay,
especially if there is no cap on commissions. Flexibility and ownership over schedules
can also lead to happier employees, which aids in employee satisfaction and
retention.
Implementation of a delivery service:
In case you have been thinking about setting up a delivery service for your
restaurant, now is a perfect time. There is even no need to setup your own delivery
fleet thanks to the availability of reliable third-party delivery services like Jumia
food, safe boda food etc. you have to adapt to bringing your restaurant services to
the door step of your customers.
List your restaurant on Google My Business (GMB):
The easiest and quickest way you can do to help customers find your restaurant is
to create a Google My Business (GMB) showing your address, phone number, hours
of operation, and photos of your location and restaurant. GMB also allows your
customers to review your restaurant and post photos of your food dishes online hence
creating awareness which attracts more customers and boosts the sales.
Make announcements and adverts through social media:
A benefit to maintaining a business account for social media like Facebook and
Instagram is that you can promote daily special meals, menus and updates, and also
events. You can also use it to alert/inform customers if your business is closed
unexpectedly in case of a power outage or unexpected reasons. It’s also a perfect
way to connect with your community and improve your brand.
Develop a customer loyalty program:
The basis of a loyalty program is to reward customers every time they dine with you
or purchase certain menu items. You can track visits and purchases by issuing a
membership card and then offer incentives for meeting certain goals. Offering free
drinks and desserts is often a good choice because they’re less expensive than an
entree, but they will still make your guests feel appreciated. You can set up a card
that tracks points in your POS system
Limit your menu:
Reducing the number of items on your menu helps to speed up several processes.
Customers spend less time looking at the menu, and the kitchen can prepare dishes
more quickly.
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