The paper "Managing Meal Costs: Variance Generation, Analysis, and Interpretation by Milan" is a delightful example of an article on finance and accounting. Due to the decline in the number of people who regularly eat out it has become necessary for restaurants to manage the cost of preparing meals and ensure that they make maximum profits. In minimizing the cost of preparing food in a given restaurant various strategies need to be put in place. This essay will examine how one can use different methods like the traditional cost variance framework, and then use it to regulate labor and food costs in a restaurant. The major aim is to reduce the costs and increase the profits which a given restaurant makes.
In this case, planning becomes necessary, in developing labor and food costs one should put into consideration the fact that costs are by nature variable within a relevant range of activity. Labor costs vary with the number of labor hours consumed, and food costs generally vary with dollars of sales (Milan et al 5). The points of interest include data collection which helps in the determination of costs; a restaurant operator must develop methods of capturing data either from the point-of-sale system or some other recording system.
This article is relevant to the class because it illustrates different methods of managing the costs that may be incurred in a given restaurant and on how to determine them. It also shows how one can interpret variances that occur in the normal day to day operation. I would like to discuss with my class the different cost variances that occur in a restaurant and their interpretation, various methods of collecting and representing data in a restaurant, and how one can generate more profits while operating a restaurant.
Generally if one is able to reduce the costs incurred in a restaurant and increase the profits, it will result in making a restaurant more successful.