The purpose of this case discussion is to understand the potential uses of Cost Profit Volume analysis in a top International company.
McDonalds is a company who must pay close attention to its margins and prices in both present stores and in future stores. Ever wonder how a new store is justified?
From the 2013 10-K report, “In 2013, the Company opened 1,393 traditional restaurants and 45 satellite restaurants (small, limited-menu restaurants for which the land and building are generally leased), and closed 295 traditional restaurants and 194 satellite restaurants.” Each opportunity and each store is constantly evaluated.
- Leveraging McDonald’s 10-K report and any other sources you deem helpful, include in your final response the answers to the following questions:
- Would McDonalds be likely to use CVP analysis in the decision to open a new store? Why?
- How could CVP analysis be used to support a decision to close a store? Explain.
- How are the franchises impacted by the movement toward a so called “living wage” of $15 per hour? Determine what the impact would be on a store’s CVP analysis.
- Considering the 30% of stores that are owned and operated by corporate McDonalds, what changes would you make in your CVP when deciding to open a new store?
- As a new store manager who is aware of the potential of variable costing, how could this information be used to present
- your store’s performance in a good light?
- Organize your team, plan the work that needs to be completed, and discussing how you plan to keep each member of the team accountable. Consider changing roles each week so everyone on the team has a chance to fulfill different requirements. Identify each role needed for the team this week and specifically who will take the role of Facilitator and Summarizer:
- The Facilitator will ensure that all members of the team are contributing, provide encouragement, and make sure the group is on task.
- The Summarizer is responsible for reviewing all the team’s entries, looking for themes and organizing and finalizing the responses to the case questions.
- Use the Small Group Communication Areas to write an approximately 500 word paper addressing the questions above and then submit it to this assignment by the end of the week.
- Your group’s response needs to be cited using APA guidelines with a list of references at the end of the response.
- The response should have a clear, well formulated thesis, development using textual quotes and references; sentence structure, grammar, punctuation, and spelling count. It needs to be insightful, thoughtful, and analytical.
- Complete the Team Cooperation Evaluation rubric at the end of the week.
- For grading criteria, refer to the General Written Assignment Rubric in the Getting Started area.
- Your assignment is due Sunday by 11:55 PM CT.