Price $75 2327 Words Solution ID 5979 Case ID UV1739

Wendys Chili A Costing Conundrum

Overview of Case Solution

Excel Calculations

Chili 8 ounce Cost

Total cost of Ingredients

Cost of 57 Chilis

Cost of one 8 ounce Chili

Other Direct costs

Cost of a packed 8 ounce Chili

Time taken for Chili Preparation

Questions Covered

How was Wendy’s able to achieve its initial success and to grow so rapidly at a time when the quick service hamburger business appeared to be saturated?

What benefits might have resulted from Wendy’s’ “limited menu” concept? What were the disadvantages of such a concept?

Why was the concept eventually discontinued?Why was Wendy’s’ drive through window successful when other quick-service- restaurant chains had been unsuccessful at implementing the same concept? 

How much does a bowl of chili cost on a full cost basis? An out-of-pocket basis?

For determining the true probability of chili, how much does a bowl of chili really cost?

Would you recommend dropping chili from the menu? Why or why not?

Keywords

Accounting, Control systems, Costs, Profit planning, Profitability