Group Assignment
Instructions for Parts A & B
Scope: There are two parts in this assignment. Part A is a group assessment and Part B is an individual assessment. Part A requires students, as a group, to carry out an analysis of the case study (Krishang’s Kitchen – described in this document) and submit an executive report in PowerPoint format. Part B requires each individual student to map the Krishang’s Kitchen case study data in the SAP accounting system and complete several transactions and reports and submit a document. This assignment requires students to demonstrate their:
i) Ability to identify and apply relevant management accounting concepts and techniques to practical business contexts and make recommendations with a focus on the usage of qualitative and quantitative information.
ii) Specialist SAP software skills by mapping the business scenario in SAP, determination of relevant master data and transactions, their creation and/or execution and producing relevant reports from the SAP accounting system.
Weighting: Part A – Case analysis – Group (15%)
Part B – SAP component – Individual (15%)
Submission: • Two files should be submitted. One for Part A and one for Part B.
• Both files must be saved and submitted in PDF document format.
• Please submit in Canvas in the two folders in the ‘Assessment’ section:
i) Part A – Case analysis – Group ii) Part
B – SAP Component – Individual
Your Part A PDF file should include the cover page, PowerPoint report, appendices, and the peer evaluation form.
KRISHANG’S KITCHEN
You and your management accounting team have been recruited by Natwar who runs Krishang’s Kitchen, a mid‐range contemporary casual dining restaurant. This is a family‐owned restaurant in inner Sydney that has been operating successfully for over 7 years. The business prides itself on authentic Indian cuisine and has been attracting Australians on account of its food quality and trendy restaurant interior. The restaurant has received good reviews from popular newspapers, magazines and online review guides and directories for the ‘meal experience’ it has been providing customers. Besides, the restaurant owner, Natwar, uses environmentally safe products and cooking methods. The restaurant has won many prestigious awards in this regard.
Natwar has spent considerable time in periodically refining the restaurant’s menu in order to distinguish the restaurant from other popular Indian restaurants in Sydney. The restaurant has set menus consisting of 5 different set menu combinations, with each combination comprising a bundle of 6 different traditional and fusion menu items plus drinks. They have an average of 200 customers visiting the restaurant a day on weekends and around 80 customers a day during weekdays. Each customer‐order provides the business an average revenue of $50. The restaurant is open for 350 days in the year (100 weekends days and 250 weekdays). Given the wide range of Indian restaurant options in Sydney and strong internal competition, Natwar is very interested in gaining more popularity for his restaurant.
The business has been spending $140,000 on advertising and have 3 highly skilled full‐time chefs who were paid $75,000 each annually. They also have casual helpers and waiters. Helpers were paid $10 per hour and waiters were paid $15 per hour. On weekends, they hired 2 helpers for one 10‐hour shift each and 4 waiters for one 8‐hour shift each. On weekdays, they hired 1 helper for one 8‐hour shift and 3 waiters for one 6‐hour shift each. No one was paid overtime. Annually, the restaurant paid
$9,000 for food licensing, $20,000 for shop insurance, $15,000 for third‐party liability insurance, $5000 a month for rent, $3000 a quarter for utility (electricity and gas), and $13,000 annually for miscellaneous administration expenses. They also had equipment (stove, oven, fridge, freezer, fryer, tandoor oven and grill) and furniture worth $1,000,000 all of which were expected to have a 10‐year life period and were depreciated on a straight‐line basis. On average, the cost of food and drinks was $10 per customer, and the cost of food spoilage averaged around $0.75 per customer. Natwar purchased all grocery items from various wholesalers and kept a strong focus on the quality of the ingredients as customers often judged a restaurant by how it compares with others.
(i) Provide a breakdown of fixed and variable costs (in an itemised format) during normal functioning (before COVID times) and during restricted operations. Since Natwar was quite worried about the weeks when he had restricted operations, he wants you to calculate and analyse net profits for both periods separately.
(ii) Calculate the breakeven point separately for the period when the business had restricted operations and for the time when it was functioning at full capacity. Natwar wants you analyse in detail why there is a difference in the breakeven point between these two periods. Natwar also wants you to complete all other relevant CVP‐based calculations and provide a critical analysis of the two separate periods.
week. With the cost of living going up, the cost of food is expected to increase by 15% of the preCOVID cost. Food spoilage cost would now average at $1 per customer. Other costs remain unchanged from what they were during pre‐COVID times. Natwar expects to have 100 customers per weekday and 220 customers per day during weekends each spending $50 per order.
Though Natwar expects an increase in clients coming into the restaurant, he would like to know how many customers and how much sales revenues he would need in total (inclusive of both the dine‐in restaurant and the food truck) per week to earn a net profit of $460,000 in 6 months. He would also like you to conduct all relevant CVP‐based calculations for the food truck and the dine‐in restaurant (separately) and provide a critical analysis of the results.
Since they are introducing a food truck, the following are also expected:
1. The cost of the food truck was $110,000 with an expected life of 11 years, with depreciation being done on a straight‐line basis. The yearly cost of maintaining the truck would be $2,500.
2. Bio‐degradable and compostable packaging items, plates and cutleries to cost around $1.25 per customer.
3. Food cost is expected to be the same as the cost relating to the restaurant. Food spoilage cost would be $0.3 per customer.
4. Miscellaneous expenses (initial product inventory, permits and licenses, uniforms, smallwares, fire extinguishers, etc.) to amount to $12,000 per annum.
5. Natwar expects to have around 35 customers per day in a week with an average revenue of $35 each.
6. The chef who was already working during COVID lockdown in the restaurant will now run the food truck for 3 days a week and will be given a salary increase of $15,000.
7. 1 waiter and 1 helper will be partly allocated to the food truck. The waiter would spend 15 hours and the helper 10 hours of their allotted work hours each week working for the truck.
Based on an invoice submitted by a Real Estate agent (called ###Jayblack), Natwar makes payments towards the restaurant’s rent. For administrative purposes, in the SAP accounting system, Natwar would like these rental costs to be allocated in equal proportion to the three departments (i.e.
Finance, Kitchen and Service), using an appropriate method of allocation that clearly identifies rent as a cost head in the individual receiver cost centre reports.
In addition, Natwar would also like the miscellaneous costs to be allocated based on the number of energy units (or equivalent energy units calculated in case of the food truck) consumed by each department using an appropriate allocation method that identifies ‘miscellaneous costs’ as a cost head in the receiver cost centre reports. For the current month, 1400, 3700, 3600 and 1300 mega joules of energy are expended by Finance (F###), Kitchen (K###), Service (S###) and Food Truck (T###) respectively, while the budgeted figures are 1500, 4000, 3000 and 1000 mega joules respectively.
Natwar would like to allocate the cost of providing maintenance and cleaning services (MS###) by the Service (S###) department to other departments in SAP using an appropriate allocation method. In the current month, the Service (S###) department has provided 150, 350 and 200 hours of service respectively to the Finance (F###), Kitchen (K###) and Food Truck (T###) cost centres respectively. Total planned activity is 630 hours per month and the service rate is $150 per hour.
For the purposes of business analysis (independent of SAP), Natwar would also like to know what other unexpected costs he could have to run the food truck and any other qualitative factors he should consider in relation to the food truck and the dine‐in restaurant. Please also make a qualitative assessment of Natwar’s long‐term investment decisions.
Based on all the information analysed and the calculations your team has conducted, you need to prepare a PowerPoint presentation to report to Natwar. Your report should contain the following:
b. Background – a full description of all the important issues and their background that are relevant to the case study and your findings.
c. Analysis – provides an overview of all detailed analytical/critical insights generated in light of the results obtained. Significant calculations should not be included here (do so in the appendices), with this section referencing the appropriate appendices. For example, the CVP calculations and the budgets you have to create for this assignment should be placed in the appendices and not in the body of the PowerPoint report.
f. Action Items (Next Steps) – map out a plan that highlights specific/concrete actions to be taken in order to implement any proposed changes based on the findings and recommendations noted. This should not be a simple repetition/rephrasing of the recommendations.
g. Limitations – detail specific limitations from the analyses such as assumptions made and any missing information. You can also take note of the limitations underlying the data, calculations and the case study context.
h. Appendices – include all other relevant supporting material such as detailed calculation work (that has been referenced in the body of the report). There should be NO new material or important material in the appendices.
1. Important note: While your calculations are important, the assignment will be assessed largely for its critical analysis, depth and creativity.
2. Report: You are required to prepare your report using PowerPoint. The report must meet the purpose of providing details for a manager with sufficient time to sit and read the slides (you will not be required to present). The body of the report must not exceed 10 PowerPoint slides. The executive summary has a limit of one (1) slide only, i.e., the executive summary and the report together will be a total of 10 slides. Please also include a title slide in PowerPoint with student names and SIDs (this cover slide will not be counted as one of your 10 slides).
You are encouraged to be detailed but also succinct in your writing style (do not waste space on stating the obvious or including tedious calculations or including definitions of management accounting
terminologies or providing simplistic and obvious reasonings/interpretations). Also remember that management would normally require as much information as would be required to help them make informed decisions, while at the same time they would not prefer information overload. To reflect this, the slides should be sufficiently detailed and informative but not be over‐crowded with words and/or diagrams; sufficiently informative dot‐points are encouraged. Each slide must be selfexplanatory, with proper headings and sub‐headings. Make sure to see the Marking Guide for further details.
4. Cover page: Please provide a separate cover page for your assignment submission (with student names, SIDs and email addresses). Only one submission required per group. Cover pages can be found in Canvas.
5. Peer evaluation: Each group is required to sign and submit one (1) peer evaluation form that needs to be attached to the assignment. For example, if you were in a group of three – members #1 and #2 would jointly decide the contribution of member #3; members #2 and #3 would jointly decide the contribution of member #1; members #1 and #3 would jointly decide the contribution of member #2. You will not be required to evaluate your own contribution.
Each member should be aiming for 100% contribution. Contributions of 80% and below warrants investigation by the Unit Coordinator and a potential penalty for all group members, whether deemed to have contributed or not. In other words, if you have a non‐contributing group member it is your responsibility to get that individual to contribute, and hence this being a group task – you risk being penalised as well.
Table 1: Master data codes to be used in SAP
Details of master data and transaction evidence Master data codes
1 Bank Account 100 ###, 101### etc.
2 A/P Reconciliation account 250###, 251### etc.
3 Expense accounts (possible
twelve account codes to choose from) 700###, 701##; 710###, 711###; 720###, 721###;
730###, 731###; 750###, 751###; 770###, 771###;
780###, 781###; 790###, 791###; 660###, 661###; 670###, 671###; 680###, 681###; 690###, 691###;
8 Secondary cost elements 810###, 811### etc.
9 Cost centres As indicated in the assignment scenario
10 Cost centre group As indicated in the assignment scenario
11 Assessment cycle A###, A1### etc.
12 Distribution cycle D###, D1### etc.
13 Activity type TS###, TS1### etc.
14 Statistical key figure AR###, AR1###; or EM###, EM1### etc.
Table 2: Generic field values to be used in SAP Master data and transactions
Details of field Field values
Assessment CEle Assessed Costs
AType category –
manual allocation entry, .com 1
Activity Unit – Hours HR
Business area BI00
Company code US00
po area wcoder NA00
Cost centre category H
Country (vendor record) US
Currency USD
Key fig. cat. (category of statistical key figure) Fixed value or Tot. values (to be determined)
Plan version 0
Price Indicator – plan price automatically based on activity 1
Profit centre NA00
Receiver Cost centre group To be determined
Receiver Rule To be determined
Sender Rule Posted amounts
Stat. Key fig. UnM. (unit measure) MEJ (Mega joules) or PRS (persons) or other relevant UnM
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