acc203 assignment

timer Asked: Apr 5th, 2018
account_balance_wallet $35

Question description

Consists of 3 questions divided into 2 parts, theory and calculations.

To show workings for calculations and cite references for theory.

Tutor Answer

School: Boston College


Managerial Accounting


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April 2018

Managerial Accounting

Managerial Accounting

Question 1
Part A
Company description
McDonald's is one of the largest fast food chains of hamburger fast food restaurant operating in
the world food industry. More than 58 million customers visit McDonald's every day.
McDonald's restaurants works as a franchise store, an affiliate or the company itself. In 1940,
Dick and McDonald's brothers opened the first McDonald's restaurant in San Bernardino,
California. Initially, they had a hot dog, but later they served 25 pieces, most of which were
roasted. In 1948, the brothers closed and reopened the restaurant, selling only hamburgers,
milkshakes and French fries. Looking back at the history of McDonald's, the main income comes
from hamburgers, priced at 15 cents. The restaurant gradually became famous, and in 1953 the
brothers started joining the restaurant. The first franchise was owned by Neil Fox and the second
McDonald's restaurant opened in Fresno, California. He was the first person to attend the Golden
Arc project. In 1954, salesman and Tornado producer Ray Kroc purchased McDonald's series for
California and Arizona. She opened her first and ninth stores in Chicago, Illinois, and gave birth
to McDonald's. In 1958, McDonald's sold his 100 millionth hamburgers. Chris persuades
McDonald's brothers to sell 2.7 million US dollars in sales.
The company's income is attained from royalties, rents and fees paid by franchisees,
and sales of a restaurant operated by the company. The three-year revenue as of 2007 was 22.8
billion dollars, operating profit rose by 9% to 3.9 billion dollars with revenues increasing by
27%. McDonald's organizational structure can be described as divisional since it has three main
divisions made up of Performance-based divisions, Global hierarchy and Function-based groups.
McDonald's global hierarchical structure covers all its global businesses. The performance-based
segment is the most distinctive feature of McDonald's organizational structure. This
characteristic of the organizational structure enables McDonald's to address the core functions of
its operations using its function based groups. McDonald's is also controlled by government
regulations. Health is a major issue in the control of the food industry. Other issues are licensing,
employee law and taxation issues. McDonald's faces different tax and income scales in different

Managerial Accounting


McDonald's is also trying to cope with international currency fluctuations, especially in
the global food distribution. The local economy is also responsible for the impact of McDonald's
business. If the local economy is crucial, people are usually not willing to spend more money on
food. As a result, the company was affected. People’s lifestyles have changed and the demand
for such changes has had an impact on McDonald’s. People in this modern urban society expect
the highest level of service and all the latest facilities from the sponsoring organizations. The
main products sold by McDonald's are hamburgers, cheeseburgers, chicken products, French
fries, breakfast products, soft drinks, milkshakes and sweet spots. In response to the trend of
obesity in western countries, the company has changed its menus such as salads, burritos, and
fruit to cope with the criticism and safety of its products.

Part B
Functional Area: Procurement
Budgeting Process
With the solidifi...

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