RECOMMENDED!!Simon is the long-time catering director of Naples-on-the-Beach
Simon is the long-time catering director of
Naples-on-the-Beach, a hotel noted throughout the industry for quality,
profitability, and cost control. The hotel recently catered a steak dinner for
a 2,000-person convention. Strict standards were in place for the dinner: 0.75
pounds of beef per plate at $9 per pound. A review of the accounting records
shortly after the convention showed that 1,680 pounds of beef were purchased
and consumed, costing the hotel $13,440.Required:A. Calculate
the cost of beef budgeted for the dinner and the total beef variance (i.e., the
difference between budgeted and actual cost). Should this variance be of concern
to the hotel? Why?B. Assess
the job that Simon did in “managing” the beef purchase by performing
a variance analysis. Comment on your findings.
C. Assume
that the hotel received a number of complaints shortly after the dinner
concluded. Explain a possible reason behind the conventioneers’ unhappiness.
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