Question

Categorizing costs in a restaurant.

Choose a restaurant of your choice. While observing the operation, consider the costs associated with running the business. Identify a minimum of 3 costs that would qualify under each of the following categories. The categories are: Direct Materials;Beef, Steak, chicken Direct Labor; Overhead; Selling Expenses.

Answer 1

The restaurant identified is a chinese restaurant. The direct materials are the one that goes directly into the making of foods. Direct labour includes wages of workers in kitchen, cleaning area etc. Overhead expenses includes all other expenses that cannot be directly related to making of food.

Direct Materials	Beef Seak Chicken Rice Vegitables Oil Noodles Sause
Direct Labour	Wages paid to - Kitchen staff Cleaning staff Waiters
Overhead cost	Supervisor Salary Resturant manager salary Resturant rent & taxes Printing expense of bills and menu