Philly Bar Works (PBW) Catering Company Case Assignment
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Philly Bar Works (PBW) Catering Company Case Assignment
Question Description
Philly Bar Works (PBW) is a catering company located in Philadelphia. Every year from May through September, they operate a beer garden at Spruce Street Harbor Park near Penn’s Landing. PBW pays for all expenses of operating the beer garden as well as rent to the Harbor Park. Their operating expenses include equipment rental, temporary liquor and business licenses, and insurance. They also have a number of small miscellaneous expenses that are typically not classified and are thought to be immaterial as individual expenses.
PBW offers four types of alcoholic beverages: domestic beer, premium beer, wine, and mixed drinks and liquor. PBW’s planning budget and actual results for 2016 are presented in the PBW.xlxs file. PBW’s planning budget includes estimated prices and volumes (qty), while the actuals provide actual volumes. Definitions of selected revenue and expense items are listed below. Items not listed are thought to be self-explanatory.
Additional Definitions
Domestic Beer: 16-ounce serving of domestic beer. The list of domestic beers is stable and includes a regular and light version of a single domestic brand.
Premium Beer: 16-ounce serving of premium beer. Beers are chosen from a rotating list, and while cost for the types of beer may vary, the estimated average cost per serving is estimated to be $1.50.
Wine: 5-ounce serving of house wine chosen by PBW. The list includes two red and two white varietals. Cost for the types of wine may vary, but average costs are expected to be $2 per serving.
Mixed Drinks and Liquor: 2-ounce serving of liquor that can either be served on its own, over ice, or combined with a mixer. Types of liquor served include one brand each of whiskey, Scotch whiskey, vodka, rum, tequila, and gin. Regardless of whether the customer orders a mixed drink or liquor by itself, the average cost of each serving is estimated to be about $2.5.
Labor: hourly employees hired to tend the bar. The beer garden is opened from 5 to 9PM on Monday-Friday and noon to 10PM on Saturday and Sunday. 2,025 hours are estimated to be needed at an average wage of $12 per hour. The estimated working hours includes time to set up and close down the beer garden, and is based on the assumption that an average of two people will work the beer garden at any given time.
Equipment Rental: an expense paid monthly, and consisting primarily of cost associated with renting tap and refrigeration systems.
Instructions: embed your answers inside the document after each question. If you are unsure about something, feel free to email me for guidance.
- Create a flexible budget for PBW using the actual levels of activity provided above.
- For each budgeted revenue and expense item, calculate the master budget, volume and flexible budget variances. Label each variance favorable and unfavorable.
- Are any of the variances calculated in part 2 cause for concern? List the variances that you think are material, and provide some possible explanations for why you think these variances occurred. You do not need to provide explanations for immaterial variances, but at least some of the variances should be material.
- PBW was able to track the actual amount, in ounces, of each beverage used. Based on the standard amounts provided above, and the actual amounts provided below, calculate the price and volume variance of each type of beverage that PBW serves.
Beverage Actual Ounces Used Domestic Beer 134,710 Premium Beer 76,485 Wine 47,477 Mixed Drinks and Liquor 16,109
- Based on the material variances that you found (in part 3 and 4), provide some advice to PBW on how to reduce each unfavorable variance and (possibly) take advantage of favorable variance.
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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