charleys family steak house. class announcements service learning assignment: progress report should...
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![Page 1: CHARLEYS FAMILY STEAK HOUSE. Class Announcements Service Learning Assignment: Progress Report should be completed one week after initial meeting with](https://reader034.vdocuments.us/reader034/viewer/2022050920/5516cc25550346f0208b5d15/html5/thumbnails/1.jpg)
CHARLEY’S FAMILY STEAK HOUSE
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Class Announcements
Service Learning Assignment: Progress Report should be completed one
week after initial meeting with the client – those submitted will be returned next class
Final presentations should include Danika LeBlanc or I
Service Learning Final Report (group) due March 31st (flexible)
Final Exam 7:00pm April 11, 2014 in SCHW Assignment #5 due April 3rd; available on-
line
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Class Objectives
1. Considering the components of performance measurement
2. Understanding performance measurement effectiveness
3. Linking performance measurement to compensation
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Charley’s Family Steak House Company Context:
Charley Turner’s four steak restaurants Located in a rapidly growing mid-size city in
Texas Restaurant goal – best steak house in the city Characterized by:
Pleasant atmosphere Fast and courteous service High quality food Freshly prepared good Reasonable prices Innovative express lunch option
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Charley’s Family Steak House Company Context: Unit 2
Alex Pearson is the manager of Charley’s Steakhouse Unit 2 (since one year)
Seating for 150 customers Employs 18-20 people Menu featured 4-6 items in each of four
categories ranging in price from $1.99 (Small salad) to $16.99 (Lobster dinner)
Feature an express service for frequent lunch time customers
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Charley’s Family Steak House Company Context: Customer Segments
Community Located next to a shopping mall
Business community Offices are nearby No eating establishment within one mile radius
Hotel 100 room budget motel with no restaurant
within walking distance
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Charley’s Family Steak House Company Context: Evaluation
Plans to implement a new bonus plan 25% of salary in bonuses Specific performance measures not yet
determined Suggestions from managers not solicited
Comparison between budget and actual Original budget prepared was aggressive and
optimistic Profit is $46,490 less than planned Severity of the recent recession
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Charley’s Family Steak House Issues: How did actual sales compare with planned
sales? Profit is $46,490 less than planned Actual sales vs planned sales – variance analysis Sales mix analysis Customer use of coupons
How well were costs and expenses controlled? Actual expenses vs planned expenses – variance analysis
Performance Evaluation Comparison of planned vs actual New bonus plan
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual % of Planned % of1994 Sales 1994 Sales
Gross Sales 1,936,025 100.0% 1,861,860 100.0%Net Sales (net coupons) 1,726,725 89.2% 1,761,760 94.6%Food 1,025,870 53.0% 1,024,020 55.0%Labour 207,000 10.7% 220,000 11.8%Expenses 152,450 7.9% 148,950 8.0% Contribution 341,405 17.6% 368,790 19.8%Advertising 78,625 65,165Miscellaneous 3,320 3,000Depreciation 24,000 24,000Insurance 9,780 9,400Taxes and licenses 10,940 11,700Rent (Base) 72,000 72,000Rent (Overage) 26,980 23,275Management 98,000 95,000 Operating Profit 17,760 65,250
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual % of Planned % of Variance1994 Sales 1994 Sales 1994
Gross Sales 1,936,025 100.0% 1,861,860 100.0% 74,165Net Sales (net coupons) 1,726,725 89.2% 1,761,760 94.6% -35,035 Food 1,025,870 53.0% 1,024,020 55.0% 1,850Labour 207,000 10.7% 220,000 11.8% -13,000 Expenses 152,450 7.9% 148,950 8.0% 3,500 Contribution 341,405 17.6% 368,790 19.8% -27,385 Advertising 78,625 65,165 13,460Miscellaneous 3,320 3,000 320Depreciation 24,000 24,000 0Insurance 9,780 9,400 380Taxes and licenses 10,940 11,700 -760 Rent (Base) 72,000 72,000 0Rent (Overage) 26,980 23,275 3,705Management 98,000 95,000 3,000 Operating Profit 17,760 65,250 -47,490
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual % of Planned % of Variance Flexible % of1994 Sales 1994 Sales 1994 1994 Sales
Gross Sales 1,936,025 100.0% 1,861,860 100.0% 74,165 1,936,025 100.0%Net Sales (net coupons) 1,726,725 89.2% 1,761,760 94.6% -35,035 1,831,938 94.6%Food 1,025,870 53.0% 1,024,020 55.0% 1,850 1,064,811 55.0%Labour 207,000 10.7% 220,000 11.8% -13,000 228,763 11.8%Expenses 152,450 7.9% 148,950 8.0% 3,500 154,883 8.0% Contribution 341,405 17.6% 368,790 19.8% -27,385 383,480 19.8%Advertising 78,625 65,165 13,460 65,165Miscellaneous 3,320 3,000 320 3,000Depreciation 24,000 24,000 0 24,000Insurance 9,780 9,400 380 9,400Taxes and licenses 10,940 11,700 -760 11,700Rent (Base) 72,000 72,000 0 72,000Rent (Overage) 26,980 23,275 3,705 23,275Management 98,000 95,000 3,000 95,000 Operating Profit 17,760 65,250 -47,490 79,940
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual % of Planned % of Variance Flexible % of Variance1994 Sales 1994 Sales 1994 1994 Sales 1994
Gross Sales 1,936,025 100.0% 1,861,860 100.0% 74,165 1,936,025 100.0% 0Net Sales (net coupons) 1,726,725 89.2% 1,761,760 94.6% -35,035 1,831,938 94.6% -105,213 Food 1,025,870 53.0% 1,024,020 55.0% 1,850 1,064,811 55.0% -38,941 Labour 207,000 10.7% 220,000 11.8% -13,000 228,763 11.8% -21,763 Expenses 152,450 7.9% 148,950 8.0% 3,500 154,883 8.0% -2,433 Contribution 341,405 17.6% 368,790 19.8% -27,385 383,480 19.8% -42,075 Advertising 78,625 65,165 13,460 65,165 13,460Miscellaneous 3,320 3,000 320 3,000 320Depreciation 24,000 24,000 0 24,000 0Insurance 9,780 9,400 380 9,400 380Taxes and licenses 10,940 11,700 -760 11,700 -760 Rent (Base) 72,000 72,000 0 72,000 0Rent (Overage) 26,980 23,275 3,705 23,275 3,705Management 98,000 95,000 3,000 95,000 3,000 Operating Profit 17,760 65,250 -47,490 79,940 -62,180
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual % of Planned % of Variance Flexible % of Variance1994 Sales 1994 Sales 1994 1994 Sales 1994
Gross Sales 1,936,025 100.0% 1,861,860 100.0% 74,165 1,936,025 100.0% 0Net Sales (net coupons) 1,726,725 89.2% 1,761,760 94.6% -35,035 1,831,938 94.6% -105,213
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual % of Planned % of Variance Flexible % of Variance1994 Sales 1994 Sales 1994 1994 Sales 1994
Gross Sales 1,936,025 100.0% 1,861,860 100.0% 74,165 1,936,025 100.0% 0Net Sales (net coupons) 1,726,725 89.2% 1,761,760 94.6% -35,035 1,831,938 94.6% -105,213
Coupons 209,300 10.8% 100,100 5.4% 109,200 104,087 5.4% 105,213
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Charley’s Family Steak HouseCharley's Family Steak HouseOperating Profit Statement
Actual Planned VarianceSupporting Data 1994 1994 1994Average Weekly customer count 4,025 3,870 155.00% customers - lunch 50% 40% 10%% customers - dinner 50% 60% -10%Gross average check - lunch 7.50$ 7.50$ -$ Net average check - lunch 6.50$ 7.00$ 0.50-$ Gross average check - dinner 11.00$ 10.50$ 0.50$ Net average check - dinner 10.00$ 10.00$ -$
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual Planned VarianceSupporting Data 1994 1994 1994Average Weekly customer count 4,025 3,870 155.00% customers - lunch 50% 40% 10%% customers - dinner 50% 60% -10%Gross average check - lunch 7.50$ 7.50$ -$ Net average check - lunch 6.50$ 7.00$ 0.50-$ Gross average check - dinner 11.00$ 10.50$ 0.50$ Net average check - dinner 10.00$ 10.00$ -$
Contribution margin - overall 17.6% 19.8% -2%Contribution margin - lunch 1.32$ 1.49$ 0.16-$ Contribution margin - dinner 1.94$ 2.08$ 0.14-$
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual Planned VarianceSupporting Data 1994 1994 1994Average Weekly customer count 4,025 3,870 155.00% customers - lunch 50% 40% 10%% customers - dinner 50% 60% -10%Gross average check - lunch 7.50$ 7.50$ -$ Net average check - lunch 6.50$ 7.00$ 0.50-$ Gross average check - dinner 11.00$ 10.50$ 0.50$ Net average check - dinner 10.00$ 10.00$ -$
Contribution margin - overall 17.6% 19.8% -2%Contribution margin - lunch 1.32$ 1.49$ 0.16-$ Contribution margin - dinner 1.94$ 2.08$ 0.14-$
Contribution margin - overall 341,405 370,706 -29,301 Contribution margin - lunch 138,407 119,583 18,825Contribution margin - dinner 202,998 251,123 -48,126
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Charley’s Family Steak House
Charley's Family Steak HouseOperating Profit Statement
Actual Planned VarianceSupporting Data 1994 1994 1994Average Weekly customer count 4,025 3,870 155.00% customers - lunch 50% 40% 10%% customers - dinner 50% 60% -10%Gross average check - lunch 7.50$ 7.50$ -$ Net average check - lunch 6.50$ 7.00$ 0.50-$ Gross average check - dinner 11.00$ 10.50$ 0.50$ Net average check - dinner 10.00$ 10.00$ -$
Contribution margin - overall 17.6% 19.8% -2%Contribution margin - lunch 1.32$ 1.49$ 0.16-$ Contribution margin - dinner 1.94$ 2.08$ 0.14-$
Contribution margin - overall 341,405 370,706 -29,301 Contribution margin - lunch 138,407 119,583 18,825Contribution margin - dinner 202,998 251,123 -48,126
Weighted Contribution Margin 1.63$ 1.84$ 0.21-$
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Charley’s Family Steak House Conclusions: Budget vs Actual Actual operating profit for Unit 2 is $47,490
less than anticipated Actual profit for Unit 2 is $62,180 less than
the flexible budget Customer mix change from 40/60 to 50/50
which changed weighted contribution margin from $1.84 to $1.63 per customer
Customers made use of coupons in greater number than anticipated perhaps because of the recession ($105,213 more than anticipated).
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Charley’s Family Steak House Conclusions: Evaluation System Participatory – no consultation Inventive and risk – none communicated Goal congruence – not linked to overall
except generally (e.g. best steak house in town)
Fair and objective – unknown measures Attainable – Optimistic and aggressive,
high expectations.
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Charley’s Family Steak House Conclusions: Evaluation System -
Controllability Prices - are set (over 10%) by Charley Ordering - of food done centrally Coupons (discount) - good at all four
locations Recent economic recession -was not
forcastable Advertising - is managed by Charley Management charge - is assessed by Charley
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Class Objectives - Revisited
1. Considering the components of performance measurement
2. Understanding performance measurement effectiveness
3. Linking performance measurement to compensation