Pappadeaux the Current Accounting System at Pappadeaux Essay

Open, View, and/or
Download this Document

Total Length: 669 words ( 2 double-spaced pages)

Total Sources: 3

Page 1 of 2

Pappadeaux

The current accounting system at Pappadeaux is fundamentally flawed, and the result is distorted performance figures for managers. Appendix A contains the basic income statement that Harry is using to evaluate Gregory, with variance noted. However, Gregory should not be evaluated on matters that do not relate to his performance. A significant portion of the poor performance against the budget relates to elements of the budget that were out of Gregory's control. For example, all food is purchased at head office; overhead is allocated by head office; utility rates cannot be controlled, only usage; Harry granted supervisors a raise; rent is established by corporate head office; taxes are out of Gregory's control.

With respect to food costs, a variance budget would show that the food expense should be 1/3 of sales, based on the budget. This implies that the food budget should have been $266,666 but was $240,000. This is an improvement of $26,666. The supervisors' budget would have been on target if not for Harry granting them a raise.

Stuck Writing Your "Pappadeaux the Current Accounting System at Pappadeaux" Essay?

View All Our Example Pappadeaux the Current Accounting System at Pappadeaux Essay

Have A Custom Example Essay Written

This would have been $80,000. Based on the budget, hourly labor should have been 20% of sales, or $160,000 based on $800k in sales. This was therefore $10,000 under budget. Thus, when all of these factors are taken into consideration, Gregory did $40,667 better than he should have (Appendix B).

It also needs to be taken into consideration that sales only disappointed because the advertising budget was cut 20% nationally and 40% in San Diego. For a new restaurant to only see a sales reduction of 11.1% from the target with a 40% advertising cut is impressive. If anything, Gregory did an exceptional job adapting to the reduced sales. He brought food, supplies and hourly labor costs below expectations. The overages in supervisory labor, rent and corporate overhead were the direct result of head office decisions, and therefore should not reflect on Gregory's performance evaluation. Likewise, Gregory has no control over the taxes the business pays -- in fact the better.....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Pappadeaux The Current Accounting System At Pappadeaux" (2011, May 10) Retrieved June 28, 2025, from
https://www.aceyourpaper.com/essays/pappadeaux-current-accounting-system-pappadeaux-50863

Latest MLA Format (8th edition)

Copy Reference
"Pappadeaux The Current Accounting System At Pappadeaux" 10 May 2011. Web.28 June. 2025. <
https://www.aceyourpaper.com/essays/pappadeaux-current-accounting-system-pappadeaux-50863>

Latest Chicago Format (16th edition)

Copy Reference
"Pappadeaux The Current Accounting System At Pappadeaux", 10 May 2011, Accessed.28 June. 2025,
https://www.aceyourpaper.com/essays/pappadeaux-current-accounting-system-pappadeaux-50863
   

Open, View, and/or
Download this Document
order custom essay example