Concept explainers
Objectives of the
Domino’s Pizza LLC (DPZ) operates pizza delivery and carry-out restaurants. The annual report describes its business as follows:
We offer a focused menu of high-quality, value-priced pizza with three types of crust (Hand-Tossed, Thin Crust, and Deep Dish), along with buffalo wings, bread sticks, cheesy bread, CinnaStix®, and Coca-Cola® products. Our hand-tossed pizza is made from fresh dough produced in our regional distribution centers. We prepare every pizza using real cheese, pizza sauce made from fresh tomatoes, and a choice of high-quality meat and vegetable toppings in generous portions. Our focused menu and use of premium ingredients enable us to consistently and efficiently produce the highest-quality pizza.
Over the 41 years since our founding, we have developed a simple, cost-efficient model. We offer a limited menu, our stores are designed for delivery and carry-out, and we do not generally offer dine-in service. As a result, our stores require relatively small, lower-rent locations and limited capital expenditures.
How would a master budget support planning, directing, and controlling for Domino’s?
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Managerial Accounting
- Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria's owner has determined that the shop has two major cost drivers the number of pizzas sold and the number of deliveries made. The pizzeria's cost formulas appear below: Pizza ingredients Fixed Cost Cost per per Month Pizza $ 4.50 $ 5,930 Cost per Delivery Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 620 $640 $ 408 $1,890 $740 $0.40 $ 3.20 $ 0.20 $ 1.60 In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November appear below. Actual Results Pizzas Deliveries Revenue 1,690 210 Kitchen staff Delivery person $27,600 Pizza ingredients $ 7,390 $ 5,870 Utilities. $ 890 $ 672 $ 988 $ 408 $ 1,890 $ 796 Delivery vehicle Equipment depreciation Rent Miscellaneous…arrow_forwardFive-step decision-making process, manufacturing. Madison Foods makes frozen dinners that it sells through grocery stores. Typical products include turkey, pot roast, fried chicken, and meatloaf. The managers at Madison have recently proposed a line of frozen chicken pies. They take the following actions to help decide whether to launch the line. Madison’s test kitchen prepares a number of possible recipes for a consumer focus group.Sales managers estimate they will sell more chicken pies in their eastern sales territory than in their western sales territory. Managers discuss the possibility of introducing a new chicken pie. Managers compare actual labor costs of making chicken pies with their budgeted costs. Profits from selling chicken pies are budgeted. The company decides to introduce a new chicken pie. To help decide whether to introduce a new chicken pie, the company researches the price and quality of competing chicken pies. Classify each of the actions as a step in the…arrow_forwardRest Inn provides four-star accommodations for the vacation traveler. It is located just off a major interstate freeway. There are three other competing motels at the same exit. Hotel management is preparing its budget for the busiest three-month period of the year, June through August. To differentiate themselves from the competition, Rest Inn provides a complimentary spa package for each guest stay that includes specialty shampoo, conditioner, soap, lotion, toothpaste, lavender essential oil, slippers, earplugs, and a sleep mask. Rest Inn purchases the spa package from a local vendor that puts the Rest Inn private label on the products. The hotel follows a policy of purchasing enough spa packages to ensure that 40% of next month’s bookings are in the current month’s ending inventory. Rest Inn’s sales budget for guest stays for the next quarter is as follows: June 2,100 guest stays July 2,300 guest stays August 1,900 guest stays How many spa packages should Rest Inn…arrow_forward
- Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offeringtake-out and free home delivery services. The pizzeria’s owner has determined that the shop has two majorcost drivers—the number of pizzas sold and the number of deliveries made. Data concerning the pizzeria’scosts appear below:Fixed Cost Cost per Cost perper Month Pizza DeliveryPizza ingredients ............... $3.80Kitchen staff ....................... $5,220Utilities ............................... $630 $0.05Delivery person .................. $3.50Delivery vehicle ................. $540 $1.50Equipment depreciation ..... $275Rent ................................... $1,830Miscellaneous .................... $820 $0.15In November, the pizzeria budgeted for 1,200 pizzas at an average selling price of $13.50 per pizzaand for 180 deliveries.Data concerning the pizzeria’s operations in November appear below:Actual ResultsPizzas ................................... 1,240Deliveries…arrow_forwardWhy Does It Matter? MACS CUSTOM CATERING, Eugene, Oregon Macs Custom Catering, an award-winning catering business located in Eugene, Oregon, specializes in providing only the best for you and your guest. Macs Custom Catering has been in business for over 30 years and is experienced in providing catering services at weddings, corporate events, and large sit-down events. It offers several signature buffet options, including Northwest Bounty, Hawaiian Luau, and Italian Fest. Imagine that you have been hired to set up the accounting system for a catering business such as Macs. What accounts would be included in the chart of accounts? As you list the accounts, identify the type of account. Is the account an asset, a liability, or owners equity?arrow_forwardFocused Value Streams, Product Costing Sixty employees (all CPAS) of a local public accounting firm eat lunch at least twice weekly at a very popular pizza restaurant. The pizza restaurant recently began offering discounts for groups of 15 or more. Groups would be seated in a separate room, served individual bowls of salad costing $1.60 each, pitchers of root beer costing $3.00 each (each pitcher has a five-glass capacity), and medium, two-topping pizzas for $11.00 (10 slices each). The food would have to be ordered in advance. Thirty of the CPASs commit to eating two slices of pizza, four glasses of root beer, and one bowl of salad [a consumption pattern of (2,4,1)]. The other 30 are more hearty eaters and commit to eight slices of pizza, four glasses of root beer, and one bowl of salad [a consumption pattern of (8,4,1)]. Each member of the group must pay an assessed amount for the lunch. Required: 1. Determine the total number of pizzas, pitchers of root beer, and salads that must be…arrow_forward
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