The researcher of this paper talks about one the most widely used technique to apportion the costs among various departments and units of production on the basis of activity of the firm. This method has removed any discrepancy that the previous accounting methods have and now because of this method we have been able to comply with the accounting principle of “PRUDENCE”. In this paper the researcher has crafted a strategy how McDonalds, which is one of the biggest fast-food chain, could use this method in their financial statement and how could they use this method to effectively calculate the cost of each product. In the end the researcher also has concluded that this method will be very useful for the company in apportioning overheads among various different products that McDonald’s outlets sell. The overheads that McDonald restaurants incur are telephone bill, security costs, electricity bill and wages. It is also stated that since all businesses apportion these overheads on the basis of past data, there are chances that in a certain month these apportions are under-estimated or overstated. If these apportions are over-estimated it is a good thing and increase the company’s profit on the ground that it has managed to use its resources efficiently. However, if these estimates are under-estimated then the company has to allocate these costs elsewhere. These are usually included in the item of unrecognized losses or material wastage. They present a loss to the company and decrease the profitability of McDonalds Corporation.
Cite this document
(“McDonald's Corporation: Recasting Unallocated Costs Essay”, n.d.)
Retrieved from https://studentshare.net/business/371994-mcdonalds-corporation-recasting-unallocated-costs
This essay focuses on the discussion about one the most widely used technique, that is aimed to conduct an apportionment of the costs, among various departments of the McDonald's Corporation and units of production on the basis of activity of the company. …
The service sector involves interaction between service providers and service consumers. Service is characterized by certain elements. One of these elements is intangibility and insubstantiality of the service. This implies that one cannot use their senses to touch, smell, see or hear the service.
According to their Annual Report (2011), the company generates around 33 billion total assets (in terms of system wide sales) across all its franchising stores in the world. According to Brandz Top 100 Brand Ranking and Newsweek magazine, McDonalds indeed was the eight most famous and illustrious brand in the world with a brand value of $81,016 million.
In this paper we have crafted a strategy how McDonalds, which is one of the biggest fast-food chain, could use this method in their financial statement and how could they use this method to effectively calculate the cost of each product. In the end we have concluded that this method will be very useful for the company in apportioning overheads among various different products that McDonald's outlets sell.
MacDonald, (2008, Online); Naylor (2004, PPT. 5.3); Drucker, (1984, p. 53-63).
However, their international investment has not gone without caching the heart of native country ethical concerns. Back in 2000, they were opening up their 500th store in Brazil, which is their 8th largest market with over 34,800 workers that made it the 3rd largest corporate employer in that country.
To manage a business successfully, the manager should make plans both in the short run and strategic perspectives. The business manager has to understand the various types of cost and their behavior in the short run and long run and hence this essay.
Long run has been defined as that period of time in which all the factors of production are variable, but the state of technology is fixed(Jocelyn, 80).
However, it was Raymond Albert Kroc, an ambitious and insightful entrepreneur, who first realized the true potential of this concept and favored the opening of new restaurants all over the world (Love 1995). Therefore, the massive expansion plans of the
Floor running managers are subsequently followed by staff training crew. Crew members follow staff training crew. McDonalds’ is having a division organization structure at restaurant level. This structure consists of different teams