Managerial accounting g lala analysis review of related literature

VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY MANAGERIAL ACCOUNTING G-LALA ANALYSIS No Name Student ID Email 2052710 thao.huynhntcd@hcmut.edu.vn Huỳnh Thị Phương Thảo Nguyễễn Phạm Tường Ngân 2053254 ngan.nguyen120217@hcmut.edu.vn Tốống Minh Quân Lễ Nguyễễn Kiễều Anh 2153750 1852230 quan.tongminhqtkt@hcmut.edu.vn anh.le20112000@hcmut.edu.vn Nguyễễn Thị Phương Thảo 2053443 thao.nguyen0802@hcmut.edu.vn OCTOBER 1, 2022 SOS TEAM Group assignment report TABLE OF CONTENT ABSTRACT I INTRODUCTION 1.1 Background .2 1.2 Reason 1.3 Objectives II REVIEW OF RELATED LITERATURE .3 Job Order Costing Activity Based Costing Cost Control 4 Business ethics .5 III DATA COLLECTION 3.1 Brand Overview .6 3.2 G-Lala’s Data Collection IV ANALYSIS DATA 4.1 Overview Data & Comment About Financial Position 4.1.1 G-Lala's average sales in the second quarter of 2022 4.1.2 G-Lala's highest income and factors affecting this figure 4.1.3 Structure analysis of expenditure average per month 4.2 Determine The Cost Of Products In G-Lala Restaurant 4.3 How The Firm Control The Costs Of Making The Products/Services 10 V CONCLUSION & RECOMMENDATIONS 11 Conclusion 11 Recommendations for future planning 11 VII REFERENCES .13 VIII APPENDIX 14 TABLES OF FIGURES ABSTRACT 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 and made a profit And to apply precious knowledge, we have collected information about how G-LALA controls the cost of making food for sale in their restaurant, how it calculates cost and measures the performance of the company based on data of revenue and cost From that, we can analyze and make feedback for the company to improve their performance through controlling, budgeting, and planning for optimizing profit and sustainable supply and money Moreover, we also identify and analyze ethical issues of the G-LALA to understand more about company problems We also learned how to cooperate with other people and solve problems together when things didn’t go with what we had planned or had conflicts in our team In summary, throughout this process to finish this report, we learn how to apply the knowledge we learn in Managerial Accounting in analyzing and measuring performance and giving feedback for company optimization’s purpose, and also cooperation effectively in a team 1|Page I INTRODUCTION 1.1 Background The society is growing, production and business activities are also expanding The more diverse and complex they are, the more urgent and important the information needs become The economic environment is always fiercely competitive, especially among businesses in the same industry Faced with that situation, it is required that businesses 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 to achieve 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 at the revenue results of that business, but must consider each specific factor How much revenue is achieved, and to achieve that level of revenue, how much does the business have to spend? Therefore, in the process of production and business, enterprises must always pay attention to the issue of costs, because each cost is related to profit Therefore, one of the 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 has costs This cost must be calculated how to be appropriate, balanced and most importantly to be the minimum but can bring about the highest revenue This cost calculation and analysis will help managers control costs, make the right decisions in business, 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 analyze the current situation of cost management at G-Lala diner to accumulate more knowledge and complete course requirements 2|Page 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 the company  Analyze how the company deals with ethical issues  Proposing cost management solutions to improve operational efficiency for G-Lala diner II REVIEW OF RELATED LITERATURE Process costing Process costing is an accounting strategy generally utilized by companies that mass produce identical or extremely comparable goods or output units It is characteristic in manufacturing sectors where the production costs of each unit of output are extremely comparable and it is not practical 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 the production process, instead of tracking costs for each individual item After adding up the cost of all 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 = Cost control Cost control is the process of detecting, time to get rid of, or having to cut back on wasteful business 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 and volume discounts employs spend management systems and increases product quality and manufacturing or construction efficiency In a competitive marketplace, the low-cost producers are the ones that can earn the highest profits Reducing costs is therefore a key objective for most businesses since it increases both efficiency 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|Page Break - Even Point By comparing the market price of an asset to its initial cost, the break-even point (break-even price) for a transaction or investment can be identified The break-even point is attained when the two values are equal The break-even point allows a company to know when it, or one of its products, will start to be profitable 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 fixed manufacturing costs by the revenue per unit less the unit variable costs per unit Fixed costs in this context relate to expenses that are constant regardless of the quantity of units sold The production level at which total sales for a goods equal total expenses is known as the break-even point 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) = Ethical issues in G-LALA Business ethics is a set of principles and standards that regulate, evaluate, guide, and control the behavior of business entities Business ethics is the ethics applied in business activities Business ethics is a form of professional ethics Business ethics has the specificity of business activities - because business is an activity associated 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 the business world, but if applied to other fields such as education, health care or to other social relations such as husband and wife, parents, children, those are bad habits that are criticized by society However, it should be noted that ethics and business are always governed by a common value system and social ethical standards 4|Page III DATA COLLECTION 3.1 Brand Overview G-LALA, a broken rice brand, was launched by GREENFEED Vietnam in early 2022 in the 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 ( Uni t:V Income Net Sale Apr Ma ND) Jun il 178 y 176 e 180 83 96 72 3.2 3.3 4.2 30 50 40 46 45 46 133 709 702 13 91 90 132 131 134 70 25 02 0.0 3.4 1.3 Cost of goods sold Materials Gross profit 5|Page 93 38 40 Expense Rent 55 55 55 Expenses 386 386 386 .66 66 21 21 21 000 000 000 Manager 00 00 00 Salary 20 20 20 000 000 000 00 00 00 14 15 14 Waiter Wage 577 207 889 Electricity 95 70 98 Expenses 257 257 257 Garbage 00 00 00 Expense 1.9 1.6 1.6 Water 66 30 04 Charges 842 4.5 409 4.2 529 4.0 Marketing 00 00 00 expense 000 2.5 000 2.5 000 2.5 60 60 60 000 120 000 120 000 119 Depreciation 6|Page 66 24 24 69 Total 8.4 1.7 8.1 expenses Earning 65 12 78 11 85 14 before taxes 451 011 323 62 66 15 Taxes (4,5%) 560 495 644 32 52 54 11 10 13 891 516 678 30 13 61 Net income Table 1: Profit and Loss Statement - Second Quarter 2022 7|Page Break Even Graph TC Rev 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 0 1000 2000 3000 4000 5000 6000 7000 Figure 3: Break Even graph for G-Lala restaurant in average The breakeven chart reveals that the G-Lala is getting close to the breakeven point because 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 the selling 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 of making the products, it is necessary to look through their tracking information in detail for example with the request payment form and also the material cost sheet they did each period Making a budgeting plan Budget management is one approach of cost control that most firms adopt in the beginning Thus, this business must also have a budgeting plan Mr Tuan, the company's direct 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 16 | P a g e the cost in the future With his business management skills and perspective, things could not be as accurate as it should be As a result, some expenses are incurred but not properly 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 payment request form for any expenses incurred in restaurants Advantage: In order to readily keep track of information for detail whenever occurring, any costs incurred are first documented For the entire firm finance department, filling out the financial statement has substantial advantages Examining the state of these records will help to evaluate the success of your company's management and decide how best to move on with business development It is also help reduce ethical issues 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 harder than normal because of this restriction on their financial autonomy Making decisions while waiting for permission becomes a barrier to reaching their full potential It takes too long and requires approval from superiors, preventing it from taking advantage of good opportunities Each piece of information is collected daily, averaged over a predetermined amount of time, and standardised for comparison across digital and paper media Employees are noted on the form while using ingredients for processing to ensure that nothing is omitted and the statistics are sufficient The material cost table is published and updated daily on the spreadsheet to make sure that workers have followed management's estimate (For example 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 a result, 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 17 | P a g e agreements with employers This will prevent unethical business practices or implicitly affect the company Additionally, the quantity of materials that make up the product is meticulously measured in order to determine how each component will function When a dish or product is presented to customers, it will be of a fixed quality and standard The quality manager of the parent firm independently verifies that procedure By removing product quality disparities, this standardization helps protect eatery 4.4 Dealing with the ethical issues The health and safety of consumers are the primary ethical concerns while conducting business in this sector due to the unique characteristics of the F&B service industry Product quality G-Lala respects customers by being truthful about the source of its raw materials and the goods it produces in order to address food safety and hygiene concerns The business's sustainability criterion is to utilize resources from the parent company's farm in accordance with worldwide standards, inheriting successful outcomes and wholesome ideals from the developing 3F Plus (Feed - Farm - Food) chain of healthy foods The source of G-LALA's raw materials is guaranteed for easy and safe traceability with the exclusive GF24 breed, eating clean bran, without weight gainer; VietGap standard chicken meat, raised under strict procedures, against H5N1; Chicken eggs are cleaned with modern UV treatment technology from Japan Due to the law and the particular standard of G-Lala, one member must handle the sample and hold device daily Environmental protection The brand green color and also the promotion of environmental protection of customers through biodegradable paper bags and boxes used for the packaging process of take-away products 18 | P a g e Customer service and internal members training G-Lala spends at least week training waiter about how to serve customer as well as possible due to their expectation and also the speed packaging, setting up and serving according to the working process standard G-Lala set up cameras around the serving area with the set up area, to record the working process of each employees and the cashier is observed by the highest quality camera in order to guarantee the best quality and attitude to the customers V CONCLUSION & RECOMMENDATIONS Conclusion According to the above analysis, G-LALA controls the costs of making the products/service quite well thanks to the use of the material cost sheet This means that the staff will determine the exact amount of ingredients to buy to avoid wasting money, moreover the manager can easily track the cost have to use for these materials, from there can easily make decisions on selling prices as well as promotion strategies later Besides, with the use of payment requests to manage departments, along with a systematic method of storing information about the code profile, effective day, and time; update details about date, description, money, currency, and invoice number; clearly record the notes about the payment and accountant's comment All the above tools and management methods have helped the company a lot in managing employees, departments, control flow of costs, process payment requests, deal with liability issues So, the company can minimize ethical issues, or can easily resolve them when they arise However, through break-even analysis, G-LALA needs to sell 4482 dishes to break even while the company only sells about 4,500 dishes per day This shows that the company is difficult to achieve high profits, difficult to develop, even at risk of entering the "Loss area" With a newly launched brand like G-LALA, it's almost impossible to expand the business 19 | P a g e Recommendations for future planning Based on the analysis of costs, and observations on the operation of the restaurant, we offer several solutions to the above problem as follows: It can be seen that the restaurant is located at a convenient location in the city center, but the advertising banners, standees are difficult to see, and the decoration is quite simple, making it difficult to attract the attention of customers Besides, G-LALA is also subject to fierce competition from traditional restaurants, familiar to the people of the area Along with the influence from the culinary culture of the Vietnamese people, broken rice is a popular street food, so the service is served in the form of a modern dinner, so not many people want to experience it Although applying modern and advanced equipment, quality processes according to international standards, delicious dishes, food safety and hygiene, for a newly developed brand, it needs to be known more to make full use of its advantages Therefore, the company should learn to analyze the needs, tastes of customers, culinary culture of the people in the area, from which to develop reasonable marketing strategies, promote online advertising campaigns, and offer the menu of dishes that is closer to the taste of Vietnamese people Through that, it is possible to attract the attention of many people and increase sales Moreover, the company can increase the selling price of the product from 40,000 to 45,000, which is the common selling price at most broken rice shops in the area, so the increase in selling price can help G-LALA reduce the break-even points Finally, the cost of renting space is the highest on the list of fixed costs So, G-LALA can hire another space at a lower price, to reduce fixed costs leading to a decrease in the break-even point 20 | P a g e VII REFERENCES 21 | P a g e VIII APPENDIX APPENDIX A: INTERVIEW TRANSCRIPT The interview was held on September 9th, 2022 by online platform communication The researcher’s time with him was limited to 45 minutes by his busy senior executive schedule The interview proceeded on a very structured path defined by the preliminary question set used by the interviewer to assure coverage of the topics of importance to the researcher Minh Tuâốn - a manager, gave us very light concise answers to the questions and kept the discussion on an agenda to reach a conclusion about the income report All interviews and surveys were conducted in person in a private setting and were not recorded with a tape recorder Minh Tuâốn (MT) is the person being asked for data in research SOS: Hello Mr T, Long time no see How is it going? MT: It’s OK Let’s start the interview Because I have many things to SOs: Just kidding a little bit Can you speak out about the general status in your restaurant currently couples of day? MT: Ohm Maybe it’s nothing to say much You know, My business is not only managing the human resources of G-Lala restaurant but also writing reports daily for its process It’s quite a little hard but not much The restaurant is in a hard situation because of the higher management from parent company - Greenfeed SOS: How hard is it? MT: G-lala restaurant located on a crossroads in District And the opposite side has another restaurant - like competitors with us about F&B You know, Hu tieu Thai Lan - which has a long-term business, such a system of branches Although we have some advantages, our financial status is probably not on the positive side SOS: What you think of the way you manage the restaurant's expenses? MT: I've already used a variety of cost-control techniques in our restaurant to ensure that we can break even and continue to grow positively Including every two weeks, monthly, and every quarter, we create a budget plan It is necessary for lower employees to higher managers to monitor all spending using checkpoints like statistics payment requests and material work sheets to make sure the budget 22 | P a g e is being followed properly Standardization of the optimization process is the next step of setting up the working process, included in the time management, working performance in only one standard I’m considering that my management qualifications have some mistakes and not enough to it all as well as the others My duties and vision need to be more strict and practicle, and also my higher managers SOS: Oh Your restaurant has the original taste of com tam but why your financial status not deserve it? MT: Yeah, the Marketing Inbound now actually is a serious problem Many marketing campaigns such as a chain of charity, environment occurs but nothing happened yet due to our expectation If you need to know some details about our financial status, I may help you in your research Even, you can analyze what made us in charge of many difficulties like that and make some suggestions SOS: Oh my god! Thanks MT for this kind of present We'd like to sincerely thank you SOS will keep this a secret about this Do you have any other alternative difficulties and solutions in the future? MT: The other hand to keep our business more developed is changing the location or improving our business premises to be more suitable for customers I guess that my higher manager needs to be more considerate in rent costing and how it influences our revenue Business premises are a significant problem among our business Almost, the business model only focuses on how the quality of the product adapts to the customer, how green it is, like G-Lala - just an additional method and helping the parent company We should have seen that G-Lala is an organization that earns more profit and it has another department to research in depth The taste of “com tam” is ok fine but if something happen, we aren’t able to solve the problem immediately SOS: Thanks for your speaking today We’re glad to talk with you about this topic and hope your business becomes more and more develop 23 | P a g e APPENDIX B: TABLE OF PAYMENT REQUEST 24 | P a g e APPENDIX C: TABLE OF MATERIAL COST STT Item code Unit Name of Specific MeasurAmount materials a-tion ement price A10121 Gao tam 2000006 Dau an 25 Kg/túi Kg 5L/can 2000026 Tieu den 0.2 xay Kg/túi 2000012 Muoi Iot Kg/túi Kg A10113 Rong bien 0.2 Kg/túi Kg A10122 Hoa dau biec 0.2 Kg/túi A10131 Dưa leo A10098 PIC Ms Ngoc 12.500 300 Kg Kg 43.200 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc Kg 160.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc 8.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc 440.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc Kg 0,6 900.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc Bao PE Kg 75 17.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc Hanh la Bao PE Kg 12,5 40.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc A10111 Ngo ri Bao PE Kg 3,5 35.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc 10 A10132 La dua Bao PE Kg 2,5 18.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc 11 Ot hiem 2000014 khong Bao PE cuon Kg 7,5 55.000 Giá tr tốối ị thiểu 500.000đ/đơn hàng Ms Ngoc Bao PE Kg 1,5 105.000 Giá tr tốối ị thiểu 500.000đ/đơn Ms Ngoc 12 2000014 Ot xiem xanh 25 | P a g e 400 Lead MOQ time R8mm x L30mm 26 | P a g e hàng APPENDIX D: FIGURES AND GRAPH COMPARISON INCOME in APRIL - MAY - JUNE of 2022 (in thousand VND) 181 180.72 180 179 178.83 178 177 176.96 176 175 174 173 April May Income per month Figure 4: sample and hold device 27 | P a g e June 28 | P a g e 29 | P a g e 30 | P a g e