McDonald's Corporation: Activity Based Costing
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What is a service/product in McDonald's that can use activity based costing? What are 3 activities for activity based costing and the correct cost drivers for them? Provide an estimate for the application rates of these drivers.
Include the nature/name of McDonald's, which activity, time period, and inputs were used, and your results and implications from them.
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Solution Summary
Your tutorial is 732 words and includes an Excel spreadsheet where store overhead is broken down into four categories (1) rent and utilities, (2) hiring and training costs, (3) cleaning and maintenance supplies and (4) the cost of uniforms. Then, a cost driver is given for each of these three. The overhead is then applied to three delivery modes for McDonalds: window, in-store and take-out meals. The cost of meals for each of these delivery modes is computed and discussed. The numbers are based on actual 2010 Annual Report for McDonalds but the activity data is made up based on some understanding of the store dynamics. I put an extra thought at the end if you want to expand it a bit. Just an option.
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
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