Managerial accounting g lala analysis review of related literature

Determine The Cost Of Products In G-Lala Restaurant...9 4.3.. And to apply precious knowledge, we have collected information abouthow G-LALA controls the cost of making food for sale in

VIETNAM NATIONAL UNIVERSITY

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY

MANAGERIAL ACCOUNTING

G-LALA ANALYSIS

OCTOBER 1, 2022SOS TEAMGroup assignment report

ABSTRACT 1

I INTRODUCTION 2

1.1 Background 2

1.2 Reason 2

1.3 Objectives 2

II REVIEW OF RELATED LITERATURE 3

1 Job Order Costing 3

2 Activity Based Costing 4

3 Cost Control 4

4 Business ethics 5

III DATA COLLECTION 6

3.1 Brand Overview 6

3.2 G-Lala’s Data Collection 6

IV ANALYSIS DATA 7

4.1 Overview Data & Comment About Financial Position 7

4 1.1 G-Lala's average sales in the second quarter of 2022 7

4.1.2 G-Lala's highest income and factors affecting this figure 7

4.1.3 Structure analysis of expenditure average per month 8

4.2 Determine The Cost Of Products In G-Lala Restaurant 9

4.3 How The Firm Control The Costs Of Making The Products/Services 10

V CONCLUSION & RECOMMENDATIONS 11

1 Conclusion 11

2 Recommendations for future planning 11

VII REFERENCES 13

VIII APPENDIX 14

Along with the Managerial Accounting Course taught by our lecturer - Duong Nhu Hung,

we have learned so many things about methods, definitions, ways of controlling,planning and budgeting before we start to produce until we have sold products andmade a profit And to apply precious knowledge, we have collected information abouthow G-LALA controls the cost of making food for sale in their restaurant, how itcalculates cost and measures the performance of the company based on data of revenueand cost From that, we can analyze and make feedback for the company to improvetheir performance through controlling, budgeting, and planning for optimizing profit andsustainable supply and money Moreover, we also identify and analyze ethical issues ofthe G-LALA to understand more about company problems We also learned how tocooperate with other people and solve problems together when things didn’t go withwhat we had planned or had conflicts in our team

In summary, throughout this process to finish this report, we learn how to apply theknowledge we learn in Managerial Accounting in analyzing and measuring performanceand giving feedback for company optimization’s purpose, and also cooperationeffectively in a team

I INTRODUCTION

1.1 Background

The society is growing, production and business activities are also expanding Themore diverse and complex they are, the more urgent and important the informationneeds become The economic environment is always fiercely competitive, especiallyamong businesses in the same industry Faced with that situation, it is required thatbusinesses constantly improve the quality of products and services

At the same time, it requires businesses to have the right operating strategies.Every business wants its business activities to achieve the highest efficiency, in order toachieve the goal of bringing the highest profit for the company

1.2 Reason

To assess whether a business is operating effectively or not, it is not only looking atthe revenue results of that business, but must consider each specific factor How muchrevenue is achieved, and to achieve that level of revenue, how much does the businesshave to spend?

Therefore, in the process of production and business, enterprises must always payattention to the issue of costs, because each cost is related to profit Therefore, one ofthe issues businesses pay special attention to is how to control the costs of the business,save the maximum costs and bring the highest efficiency Every business activity hascosts This cost must be calculated how to be appropriate, balanced and mostimportantly to be the minimum but can bring about the highest revenue This costcalculation and analysis will help managers control costs, make the right decisions inbusiness, and from there can make plans and methods future direction of the business.Realizing the importance of cost analysis in business, our team decided to analyzethe current situation of cost management at G-Lala diner to accumulate moreknowledge and complete course requirements

1.3 Objectives

 Identify and analyze expenses at G-Lala diner

 Evaluate the company's cost management situation

 Determine the factors affecting the effectiveness of cost management of thecompany

 Analyze how the company deals with ethical issues

 Proposing cost management solutions to improve operational efficiency for G-Laladiner

1 Process costing

Process costing is an accounting strategy generally utilized by companies that mass produceidentical or extremely comparable goods or output units It is characteristic in manufacturingsectors where the production costs of each unit of output are extremely comparable and it is notpractical to track expenses for each unit separately throughout the production process With process costing, G-LALA determines item cost by tracking the cost of each stage in theproduction process, instead of tracking costs for each individual item After adding up the cost ofall the steps in the process, they divide the total cost by the number of items This is called the

cost per unit Formula: Cost per unit =

2 Cost control

Cost control is the process of detecting, time to get rid of, or having to cut back on wastefulbusiness costs in an attempt to improve revenues Scheduled to begin with the budgeting process,cost control analyzes vendor selection and negotiation, takes advantage of early payment andvolume discounts employs spend management systems and increases product quality andmanufacturing or construction efficiency

In a competitive marketplace, the low-cost producers are the ones that can earn the highestprofits Reducing costs is therefore a key objective for most businesses since it increases bothefficiency and profitability

Controlling costs is one way to plan for a target net income, which is computed using the

following formula: Sales - Fixed Costs - Variable Costs = Target Net Income

3 Break - Even Point

By comparing the market price of an asset to its initial cost, the break-even point (break-evenprice) for a transaction or investment can be identified The break-even point is attained when thetwo values are equal

The break-even point allows a company to know when it, or one of its products, will start to beprofitable If a business’s revenue is below the break-even point, then the company is operating

at a loss If it’s above, then it’s operating at a profit

In corporate accounting, the break-even point is determined by taking the total fixedmanufacturing costs by the revenue per unit less the unit variable costs per unit Fixed costs inthis context relate to expenses that are constant regardless of the quantity of units sold Theproduction level at which total sales for a goods equal total expenses is known as the break-evenpoint

To calculate the Break - Even Point in units use the formula:

Break - Even Point (units) =

To calculate the Break - Even Point in sales dollars use the formula:

Break - Even Point (sales dollars) =

4 Ethical issues in G-LALA

Business ethics is a set of principles and standards that regulate, evaluate, guide, and control thebehavior of business entities Business ethics is the ethics applied in business activities Businessethics is a form of professional ethics

Business ethics has the specificity of business activities - because business is an activityassociated with economic benefits, the aspect expressed in ethical behavior is not quite the same

as other activities: Pragmatism, the importance of economic efficiency are good virtues of thebusiness world, but if applied to other fields such as education, health care or to other socialrelations such as husband and wife, parents, children, those are bad habits that are criticized bysociety However, it should be noted that ethics and business are always governed by a commonvalue system and social ethical standards

3.1 Brand Overview

G-LALA, a broken rice brand, was launched by GREENFEED Vietnam in early 2022 inthe Ho Chi Minh City area G-LALA brings dishes with traceable and safe ingredients by inheriting the results from the healthy food chain 3F Plus (Feed - Farm - Food) of GREENFEED Group

3.2 G-Lala’s Data Collection

Profit and Loss Statement - Second Quarter 2022

(Unit:VND)

il

Ma y

Jun e

Net Sale

178 83 3.2

30

176 96 3.3

50

180 72 4.2

40 Cost of goods

sold

Materials

46

133.13

7

45

709.91

2

46.702.90

0

Gross profit

132 70 0.0

93

131 25 3.4

38

134 02 1.3

40 Expense

0

21

000.00

0

21.000.00

0

Waiter Wage

20

000.00

0

20

000.00

0

20.000.00

6

15

207.70

2

14.889.98

9

Garbage

Expense

257.00

0

257.00

0

257.00

0

Water

Charges

1.966

842

1.630

409

1.604.529

Marketing

expense

4.500

000

4.200

000

4.000.000

Depreciation

2.560

000

2.560

000

2.560.000

Total

expenses

120 24 8.4

65

120 24 1.7

78

119 69 8.1

85 Earning

before taxes

12.

451 62

11.

011 66

14 323 15

Taxes (4,5%)

560.32

3

495.52

5

644.54

2

Net income

11.

891 30

5

10.

516 13

6

13 678 61

3 Table 1: Profit and Loss Statement - Second Quarter 2022

4.1 Overview Data & Comment About Financial Position

4

1.1 G-Lala's average sales in the second quarter of 2022

Income

A p r i l

M a y

J u n e

Net Sale

(VND)

178.833.230

176.963.350

180.724.240From the data collection above, we can calculate the average income of threemonths occurred in the second quarter of 2022, respectively April – May – June The aforementioned information allows one to calculate the percentage differencebetween each month's earnings and the average income for the second quarter of 2022

(Unit:VND)

A p r i l

M a y

J u n e

-7,043

1,876,9

-1,883,96

By percent

99,9

%

98,95

%

101,05

%

In this case, it is evident that the figures from April – May – June of 2022 is in astability status in terms of average monthly income The data shown in the table abovemeans that each month the difference about the average income is not significantlyremark, approximately 1-2%

4.1.2 G-Lala's highest income and factors affecting this figure

What illustrates the data Table 1 of income per month from April to June for us to

observe easily that the highest figure is in June, up to 180.724.240 VND, while income ofApril and May are both lower than about 3 millions average

The reasons why income of June is increased significantly is the way GREENFEED –parents corporation of G-Lala practise marketing on the market (because of G-kitchenbrand also) According to the COVID-19 pandemic, GREENFEED has a variety of charityactivities to promote the brand image of each firm below, depend on sustainable growthdevelopment goals of this business Such as charity activities, depending on the

sustainability of vision in GREENFEED, a chain of environmental protection activities

were implemented by that company to promote green life location at work

environment “Meals of Smiles” & “Women Empowerment” are implemented in the

same time, so that the reason why the brand image of G-Lala is effect in a positive waylike the statistics shown

materials is accounted for It can be inferred that Meat – which comprised around 65%,

is the most crucial and has a major impact on G-Lala’s profit The second part is Ricecost, accounted for 11% and this also important to the quality of each serving

For a stable business, we need to calculate the expenses for the whole month so that wecan make decisions and predict how the next month will work

The largest and most significant portion of the second quarter's monthly spending chart

is where we will start our analysis That is what it costs to hire a space It is obvious thatrenting space is highly expensive given the location of District 1 and the front of theintersection The graph demonstrates that each month, rent payments account for 33%

of the overall expenditure It seems to be more portion than the material cost also

4.2 Determine The Cost Of Products In G-Lala Restaurant

0.000.000

Vegetables

2.625.000

Figure 2 Proportion of the each month cost in average

5.000.000

Packaging

768.000

Eggs

423.225

Otherfoods

5.564.000

Vietna

mese

ham

759.924

ElectricityExpenses

4.859.319

Bevera

ge

992.988

WaterCharges

655.614

Rent

Expen

ses

55.386

Marketingexpense

4.500.0

00

Manag

er

Salary

21.000.000

Waiter

Wage

20.000.000

Water

Charge

1

11.228

Depre

ciation

2.560.000

Total

1 4 3 2 8 1 4 4 1

Total

1 8 9 7 1 9 3 3

Any expense a business faces to during the process making product/serving is included

in two primary categories of businesses’ producing cost have when forming their goods Fixed cost and Variable cost Because of the HR manager's arrangements, whereby shealways keeps the work schedule in line with the cost of 20 million VND per month, thewaiter wage in this situation is a fixed cost

-The number of dishes G-Lala sold in April 2022 was 4500 So we can determine variablecost per unit by the way dividing its total to 4500

So we can count on how many serving to demonstrate the break-even point due to the formula

The breakeven chart reveals that the G-Lala is getting close to the breakeven pointbecause 4500 units have been sold as opposed to the 4004 required to reach breakeven.

In comparison to expenses, profits are not excessive As a result, G-Lala must raise theselling price or increase the number of units sold

4.3 Cost-control applying to the firm

In order to properly comprehend how the manager or the company controls the cost ofmaking the products, it is necessary to look through their tracking information in detailfor example with the request payment form and also the material cost sheet they did eachperiod

Making a budgeting plan

Budget management is one approach of cost control that most firms adopt in thebeginning Thus, this business must also have a budgeting plan Mr Tuan, the company'sdirect manager, claims that budgeting plans are created biweekly, monthly, and quarterly

He utilizes a budget plan to establish how and when the materials will be used, estimating

Figure 3: Break Even graph for G-Lala restaurant in average

0 1000 2000 3000 4000 5000 6000 7000 0

the cost in the future With his business management skills and perspective, things couldnot be as accurate as it should be As a result, some expenses are incurred but notproperly utilized to generate a profit for the restaurant.

Monitoring all spending using checkpoints in detail

The finance operation faces a double-edged challenge by adopting a digital paymentrequest form for any expenses incurred in restaurants

Advantage: In order to readily keep track of information for detail wheneveroccurring, any costs incurred are first documented For the entire firm financedepartment, filling out the financial statement has substantial advantages Examining thestate of these records will help to evaluate the success of your company's managementand decide how best to move on with business development It is also help reduce ethicalissues because the employees will not keep any advances to use for personal purpose

Disadvantage: In contrast, it will be G-Lala's limit for not using finances and

various commercial activities on its own G-Lala's direct managers will have it harderthan normal because of this restriction on their financial autonomy Making decisionswhile waiting for permission becomes a barrier to reaching their full potential It takestoo long and requires approval from superiors, preventing it from taking advantage ofgood opportunities

Each piece of information is collected daily, averaged over a predetermined amount oftime, and standardised for comparison across digital and paper media Employees arenoted on the form while using ingredients for processing to ensure that nothing is omittedand the statistics are sufficient The material cost table is published and updated daily onthe spreadsheet to make sure that workers have followed management's estimate (Forexample figure in Appendix C)

Standardization of the optimization process

The information stated above aims to standardize the procedure in some way.Additionally, each department has its own unique characteristics and standards As aresult, G-Lala has its own standards for each department, including waiters, cashiers,chefs, etc., and all employees are required to abide by rules established by standards and