You are the manager of a fast-food restaurant selling burgers since 2015. Information of your business in 2018 are as follows:

Selling price was 210 Taka

Average number of burgers sold each month was 390.

Annual sales growth was 15%

Selling price increases by 25% every year

Monthly average selling and administration cost of the restaurant was: Rent = 30,000 Taka per month

Utility = 18,000 Taka per month

Depreciation = 3,000 Taka per month

Salary of waiters = 10,000 Taka per month

During a normal situation, the following growth has been observed:

Raw material cost increases by 8% every year

Labor cost increases by 5% every year

MOH cost increases by 12% every year

Selling and administration cost increases by 2% every year

Required:

Explain is short the production process of the restaurant to create a burger. (You must assume and explain what kind of raw materials might be needed to make a burger, what can be regarded as direct labor cost in relation to making a burger, what can be the MOH costs in relation to making a burger).

Make a Master Budget (Sales/Production/RM/Labor/MOH/Selling & Administrative/Cash budget) for the year 2019 (Pre CORONA virus year ) and another Master Budget for the year 2020 (CORONA virus year). You need to calculate your own production cost (raw material cost + labor cost + MOH cost) and beginning/ending inventory. Show details/breakdown of your calculation.    All the production cost related figures should be based on assumption, however you MUST justify any assumption you make.

Give reasons for any changes in the assumptions between 2019 and 2020 Master Budget i.e., pre COVID 19 situation and during COVID 19 situation. Also keep in mind that due to the COVID 19 situation, the growth rate may be different than what has been observed during the normal scenario (mentioned above).

Answer rating: 100% (QA)

Production Process of Burger Prepare the bread beef seasoned with salt ... View the full answer