the same, however the selling price of each item could be increased by 10%. Chintu suspects that the number of units sold would remain the same regardless of location. The caf would require two employees to be on shift at all times. Chintu plans to pay the employees BC minimum wage which is $16.75 per hour. The employees would start work one hour before opening and end their shifts one hour after closing. Chintu hopes that her business would be profitable enough for her to take an annual salary at least equivalent to what she is making at Raj Mahal Restaurant. Raj has told Chintu that she will generously gift Chintu with some of the old pots and pans from Raj Mahal Restaurant that are not being used. Chintu is budgeting to spend at least $10,000 in start-up costs (cups, plates, tables, chairs, etc). Chintu would like a detailed budget for both locations to better understand where profits would be greater for her business. Being a detail-oriented person, she knows that there can be fluctuation in financial results depending on sales and expenses. Chintu is curious to know what the difference would be between an optimistic budget and a more conservative one. She also wants details on how actual results are evaluated when compared to budgets. Chintu wonders whether her estimates for number of sales per location are appropriate based on the demographics of the locations. Are there certain products she should focus on promoting and selling more of or some products that should be discontinued? Chintu would appreciate advice on product offering. During a visit to Surrey, Jassa gets into conversation with the owner of a local restaurant, Maharaja Catering. The owner of Maharaja tells Jassa he is willing to sell samosas for $1.25 each to Chintu Chaiwala as long as Chintu pays for all shipping and handling costs. The shipping and handling for 100 samosas would be $50. Chintu would like to know whether it makes sense to purchase samosas from Maharaja Catering or continue making them in-house. Chintu estimates that $125 of overhead is spent producing 500 weekly servings of samosas. The other costs are typically 50% direct labour and 50% on direct materials. Chintu is wondering what the breakeven revenues and units are with regards to samosa servings. She has also heard of margin of safety and CVP graphs- she would like more details on those. Chintu's older sister, Dr. Happy Chatterjee, is also a chai lover. However, due to her demanding career as a medical doctor, she does not have time to make chai. Through her social circles, she has learned about a chai making machine, known as the Chaiologist 2000 . The Chaiologist 2000 can make all of the chai drinks Chintu Chaiwala offers. The machine costs $55,000 and would be useful for five years. It would result in added cash inflows of $10,000 for the first two years, and $15,000 for the last three years. Dr. Happy also mentions that there would be a maintenance fee of $7,500 to be paid in the third year. Chintu thinks this machine could be useful but is not sure if the cost is worth it. She can borrow money from the bank at a 7% rate. Alternatively, she can offer her older sister 30% equity in her business if she funds the machine purchase (Chintu would still be responsible for paying the maintenance costs). Regardless of the machine being a good or bad idea, Chintu wants a detailed analysis on whether she should have a business partner. Chintu wants to ensure that her new business has a strong focus on corporate social responsibility. As such, to honour the land that Chintu Chaiwala will exist on, Chintu wants to collaborate with a local Indigenous chef to create a special bannock snack to be included on the menu. Fifty percent of the proceeds of the bannock sales will be donated a Canadian Indigenous charity. Chintu wants this product to be very successful and an enticing reason for customers to visit the caf. Chintu wants to do marketing for this unique product offering, as well as the caf in general. Outsourcing marketing to a third party would cost about $10,000 a year. Outsourced marketing would result in weekly sales increasing by 5%. If Chintu were to handle marketing herself, the cost would be $5,000 and sales would increase by 2% per week. Provide Chintu with advice on what strategies she could employ for in-house marketing and recommend whether it is better to simply outsource this task. Chintu is excited to start her chai dreams, however she knows she cannot open her business without learning more about how to do accounting. She thinks eventually she will hire an accountant, but in the meantime, she will do her own accounting to keep costs low. As such, Chintu needs some sound bookkeeping and accounting advice for a new business owner, including details on how to make an income statement. Chintu is also wondering about the Chaiologist2000. If she decides to buy this machine, what depreciation method should she use, how would she calculate and record depreciation for the Chaiologist2000, and where on the financial statements would the machine be recorded? Advise Chintu on what to do with her business. Produce a business report, including comprehensive analysis, recommendations, and any questions you may need to ask Chintu. Group Case: Chintu Chaiwala Chintu Chatterjee has been working alongside her mother, Raj Chatterjee, in the family business for the last five years. The Chatterjee family business, Raj Mahal Restaurant, is a successful Indian restaurant in Abbotsford, BC. Chintu helps in all areas of the restaurant except accounting and finance as Chintu has never been fond of numbers or math. Over the years Chintu has gained valuable entrepreneurial and business knowledge related to customer service, inventory procurement, and other day-to-day business operations. Currently, Chintu works 40 hours a week at Raj Mahal Restaurant for $40 per hour. Chintu often ends up working closer to 50 hours a week, but she does not charge for the extra hours because she feels personally invested in the success of her family's business. Recently Chintu has started to feel that her brother, Jassa Chatterjee, wants to take on more responsibility at Raj Mahal Restaurant. Chintu feels this might be a sign for her to finally pursue her own passion. Although, she is very fond of Indian cuisine, her true passion lies in Indian chai. Chintu decides that it is time for her to use her savings and start her own business, Chintu Chaiwala. Chintu Chaiwala will be a modern, eclectic caf specializing in Indian chai. In order to start her own business, Chintu could either rent a neighboring unit to Raj Mahal Restaurant in Abbotsford or she could rent a unit at the Lonsdale Quay Market in North Vancouver. Raj is encouraging Chintu to stay close to home, however Chintu wonders if it is time to be truly independent and start her business in a new area where a chai caf would be unique and the only of its kind. Chintu has written out some considerations for both locations in the table below: Regardless of location, the caf will be open seven days a week: - Sunday, Monday Tuesday - open from 11:00 AM to 7:00 PM - Wednesday to Saturday - open from 11:00 AM to 10:00 PM 
Other questions asked by students
Advance Math
Physics
Geometry
Algebra
Accounting
Accounting