ACC 201 Flexible Budgets at Starbucks (INDIANA)

ACC 201 Flexible Budgets at Starbucks (INDIANA)

ACC 201 Flexible Budgets at Starbucks (INDIANA)

Introduction and Alignment


In this discussion forum, you will have the opportunity to think about how flexible budgets can be used to evaluate performance in a retail business that requires both direct labor and direct materials to produce the variety of items sold.  You will explore the types of information required and the decisions to be made to apply standard costing and conduct performance evaluation.

Upon completion of this assignment, you should be able to:

Prepare flexible budgets and performance reports using static and flexible budgets.

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Textbook: Horngren’s Accounting

Media: 4.3a Resource: Budgeting

Media: 4.3b Resource: Flexible Budgets and Standard Costs

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1. In Horngren’s Accounting, review:

a. Chapter 22

b. Chapter 23

2. Review the media:

a. 4.3a Resource: Budgeting

b. 4.3b Resource: Flexible Budgets and Standard Costs

3. Read the following scenario:

a. As the manager of a Starbucks retail store, you are responsible for preparing a monthly flexible budget.  You have developed standard costs for every item on the menu, including estimates of the labor required to prepare each coffee item.  At the end of the month, you have a detailed report on all items sold by each shift during the month, as well as the coffee and all other ingredients and paper goods consumed during the month.

4. Navigate to the threaded discussion below and respond to the following:

a. Discuss some of the issues that you must recognize before evaluating your shift managers’ performance at the end of the month and comparing it against the flexible budget you have prepared.

5. Your initial post is due by the end of the fourth day of the workshop.

6. Read and respond to at least two of your classmates’ postings, as well as all follow-up instructor questions directed to you, by the end of the workshop.

7. Your postings should also:

a. Be well developed by providing clear answers with evidence of critical thinking.

b. Add greater depth to the discussion by introducing new ideas.

c. Provide clarification to classmates’ questions and provide insight into the discussion.