Accounting 52 Project Harry's Hamburger

8/13/2019 Accounting 52 Project Harry's Hamburger

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Accounting 52: Cost Accounting ; Harry’s Hamburger

Harry’s Hamburger Inc, Overview Analysis.

Mr. Harry Kielmann (Mr. K) operates fast food restaurants specializing in hamburgers and relatedcondiment foods (fries, shakes etc). While Mr. K has proven to be successful as a single owner operatorthrough his frugality and intuition, the expansion to multiple units (7) has exposed vulnerabilities ofrestaurant management. Mr. K relies heavily on store managers to operate profitably and efficiently,but as yet has not fully equipped the store managers and staff to be successful. At present, restaurantreport information is limited and as such the process for management to identify and analyze relevantinformation is constrained. I will attempt to highlight a few basic suggestions to remedy.

Management Reports and Reporting Systems: Har ry’s Hamburgers has available only the most basicsales, labor, purchasing reports; and those reports are not received timely and lack essential details tomake educated decisions. Business needs to implement a “comprehensive ” store wide reporting systemto make information available to central office and store level management. This comprehensive reportsystem incorporates a top down view of operation modules (i.e.: sales, purchasing, labor, overhead)which then would provide a “real time” framework on which store manage rs can be educated andencouraged to perform to established standards set by Mr. Kielmann.

Food & Supplies Purchasing: All purchase order data input into a cost system to create a costing

standards database. Food and supply costs are then broken down; traced as identifiable direct cost andindirect to units of production. While Mr. Kielmann has been responsible for ordering all food andsupplies as a control mechanism; a purchase order database would allow him to delegateresponsibilities to staff members at the store level yet retained supervision of the bigger picture.Time invested now to determine food cost standards become the basis for management reporting ofefficiencies of operations later.

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