Week 9 EOC: Acquire the Restaurant

1.    If Dan and Lorelai decide to buy the restaurant, some fixed costs they would have are:

·         Interest

·         Mortgage

·         Employee Benefits/Salaries & Wages

·         Utility Services

·         Property Tax

2.       If Dan and Lorelai operate the restaurant, some variable costs they would have are:

·         Music and Entertainment

·         Food/Beverage Costs

·         Repairs and Maintenance

·         Direct Operating Expenses

·         Marketing

3.       In my opinion Lorelai’s decisions is the most important to ensure future profitability of the Watershed. According to Pg. 326 in Managerial Accounting for the Hospitality Industry “It is important to remember that the goal of management is not to reduce, but to increase total variable costs in direct relation to increases in total sales volume.” So with Dan wanting to reduce cost but not increase sales it could Negatively impact them.  When sales volume increases the cost of the sale will increase as well, "In the restaurant business, each steak you sell requires that you purchase a steak to replace it. The more steaks you sell, the higher your own steak cost will become because your steak cost will increase when your steak sales increase and decrease when your steak sales decrease" (Pg. 317, Managerial Accounting for the Hospitality Industry) Assuming that the restaurant’s sales volume last year was approximately $1,400,000, its loss for the year was about $98,000, that would mean their revenue for this year is $1,302,000. “Using activity-based costing to examine expenses and thus better manage a business is called activity-based management and it is just one example of how fully understanding costs can help you make better decisions and operate a more successful business.” (Pg. 316, Managerial Accounting for the Hospitality Industry) 

Week 10 EOC: My Plans

My plans for the future would be to own my own food truck. I still do not know what type of food I want to have available, but one idea I have is having Hawaiian Mexican Fusion cuisine. But before I get to that part in my life, I would need to graduate from college first. I will be getting my Associates Degree in Culinary Arts from the International Culinary School-The Art Institute of Las Vegas. I plan to already be working in a restaurant environment, Casual or Fine-Dining. I want to work at the same place for about five to seven years or until I feel I have learned as much as I could from Mentors and Peers. Through customer service management and the kitchen (front and backhouse.) Once my time is over with one restaurant Id move on to the next to see what things I learn there, and see in what ways I can challenge myself in the kitchen by enjoying different cultures. There are different techniques and styles of cooking that can be used and being able learn them and practice them to see what works best for me is part of the fun in cooking. I plan on doing some traveling to discover different flavors and cooking techniques. I would visit Austin, Texas for their Mexican cuisines and late night food trucks; and Chicago, Illinois for their famous deep dish pizzas. Traveling will give me ideas as to what flavors I want to have for my menu and the type of food I want served. I would venture outside the country as well to places such as: Italy, Mexico, and Greece. My future plans consist of me gaining knowledge from mentors, peers, and experience.                                                     

Week 8 EOC: Chapter 8, Question 4

Answers: 

a.  In October 2009 total revenues were $545,000 and in October 2010 total revenues were $583,000.  

b.  In October 2009 GOP was $162,000 and in October 2010 GOP was $184,550.

c. The GOP Percentage in October 2009 was 29.72% and GOP Percentage in October 2010 was 31.66%.

d.  According to (Pg. 297; Managerial Accounting for the Hospitality Industry) "When it is high (over 50%), it usually reflects efficiency on the part of management in converting additional revenues into additional profits." Santi's hotel achieved a flow-through percentage of 59%. A "Flow-through was created by managerial accountants to measure the ability of a hotel to convert increases in revenue directly to increases in GOP." (Pg. 296; Managerial Accounting for the Hospitality Industry) So, My assessment on the percentage would be that Santi's hotel achieved a high flow-through percentage. (Pg. 297; Managerial Accounting for the Hospitality Industry) "Understanding the flow-through characteristic of a specific hotel helps management better understand the importance of incremental levels of revenue and thus the importance of utilizing truly effective revenue management techniques."

Week 7 EOC: Trump and Small Businesses

Under Trump Presidency, some major economic policy changes with Immigration, Taxes, Healthcare, and Regulations will each affect a business in positive or negative way. When it comes to Small businesses Karen Kerrigan, president and CEO of The Small Business and Entrepreneurship Council (SBE Council) stated that “His agenda of lower taxes and simplifying the tax code, relieving small businesses of excessive regulation and red tape, competitive solutions for more affordable health insurance,” she continues to mention word of smarter trade agreements, and advancing growth-oriented policies. “Trump pledged to flatten the tax code from seven rates to three, with nobody paying more than 33% in income taxes. The alternative minimum tax would be repealed. Capital gains taxes would stay, but carried interest would be taxed as ordinary income.” Trump has mentioned gathering and deporting any undocumented immigrants in the U.S, and building a wall between the U.S. and Mexico. If he were to do so it would cost over $1 trillion to prosecute, the economies Gross Domestic Product would get reduced, and Small businesses would get affected in a negative way. Trump has changed his mind about what he plans on doing with healthcare, he now mentions keeping parts of the Obama Health Care Act, but there’s no certainty. Trump wants to be able to allow people to buy insurance across state lines, in all 50 states and work with states to ensure access to coverage for individuals who don’t have any. A constant complaint for small business owner is that they must take time away from managing their businesses to deal with time-consuming regulations. Therefore, “Trump plans on Asking all Department heads to submit a list of every wasteful and unnecessary regulation which kills jobs, and which does not improve public safety, and eliminate them.” That being said, I believe Trump Presidency will affect many businesses differently, but I feel Small businesses wont struggle as much through the change. 

Week 6 EOC: Pot in the Workplace

When it comes to deciding if marijuana is a good or bad thing in the workplace, there are many things to consider. The major one is safety, the reason any company would prohibit marijuana in the workplace. “Marijuana over activates parts of the brain that contain the highest number of these receptors. This causes the "high" that users feel.” (https://www.drugabuse.gov/publications/drugfacts/marijuana) Which means your senses, body movement, and brain get altered. An employer wants to know he can trust his workers, and some users have been known to miss work or get injured. Medical marijuana is another thing to consider, “an estimate of 2,604,079 medical marijuana users throughout the states since Mar. 1, 2016 have been made legal.” (http://medicalmarijuana.procon.org/view.resource.php?resourceID=005889) Patients who use marijuana medically should not have to go through drug tests, and should be considered a good thing. These patients require their “medicine” in order for them to function. Marijuana is known to alter your mind and body, but it can also be used treat cancers and diseases. It prevents nausea, relieves pain, and helps with weight gain; which can help boost an employee’s mood and can lead to a better work performance. But, “under Federal Marijuana Law cannabis is treated like every other controlled substance, such as cocaine and heroin. The federal government places every controlled substance in a schedule, in principle according to its relative potential for abuse and medicinal value.” (http://www.safeaccessnow.org/federal_marijuana_law) 26 states have legalized the use of marijuana, 7 states for recreational use. Each state has different laws limiting the use of marijuana, and just recently California and Nevada passed laws legalizing the recreational use of marijuana. So, considering the pros and cons I would have to side with it being acceptable in the work place.  

Week 4 EOC: Chapter 5, Question 2

Answers: 

a. The change in Cash resulted in a Use of Funds because the dollar amount increased on the balance sheet from what you started with. "When you deposit the cash into your bank account (increase in the cash account), you do not have the money in your hand to spend. In effect, the bank is “using” your money, so it is a use of funds." (Pg. 148, Managerial Accounting for the Hospitality Industry.) The amount of that change was increased by $14,000.

b. The change reflected a Use of Funds in Net Receivables."Net Receivables represents money that guests owe you for products or services that you have provided. If it increases, then that means that more people owe you money. Since you have provided products or services without being paid, this is a use of funds." (Pg. 148, Managerial Accounting for the Hospitality Industry.) The amount of that change was a $30,000 increase.

c. Notes Payable reflected a Use of Funds. Notes payable are loans or money you borrowed. "If you decrease notes payable by paying back money you borrowed, this is a use of funds for you," (Pg. 151, Managerial Accounting for the Hospitality Industry.) because you no longer have that money. The amount of the change was decreased by $44,000.

d. Retained Earnings reflected a Source of Funds for the business. "Retained earnings represent the accumulated account of profits over the life of the business that have not been distributed as dividends. If your retained earnings increases, that means you have increased your net income for the year, thus providing a source of funds." (Pg. 152, Managerial Accounting for the Hospitality Industry) The amount of Retained earnings was increased by $104,000.

e. "Sources and Uses of Funds are the inflows and outflows of money affecting the cash position." (Pg. , Managerial Accounting for the Hospitality Industry) The total amount of Sources and Uses of Funds was $743,000.

Week 4 EOC: Chapter 4, Quiz Question 3

Answers:

a. The chains % for cash is 6.70%. Rachel's cash % is lower with 4.5%. "the term cash refers to the cash held in cash banks, money held in checking or savings accounts, or electronic fund transfers from payment card companies." (Pg. 123, Managerial Accounting for the Hospitality Industry.) Which means that the cash she has available compared the chains is lower.

b. Rachel's Inventories % of 2.7% was higher than the Chains Inventories %. "inventories will include the value of the food, beverages, and supplies used by a restaurant, as well as sheets, towels, and the in-room replacement items, used by a hotel." (Pg. 124, Managerial Accounting for the Hospitality Industry) Which just means Rachel's Inventories have a value greater than the chains.

c. Rachel's % in Accounts Payable is higher with 11.3% compared to the chains 10.50%. "Accounts payable represents money that you owe to your suppliers for products or services that you have received." (Pg. 151, Managerial Accounting for the Hospitality Industry) Therefore, Rachel owes more money than the chain does.

d. Rachel's 2.5% in Notes Payables is higher than the Chains %. Which means Rachel borrowed more money this year than the Chain did.