There are plenty of activity cases that I need to come up with ananswer, but thi

Question

There are plenty of activity cases that I need to come up with ananswer, but this particular one I can't seems to figure out...HELP!

Papa John's Pizza operates pizza delivery and carryoutrestaurants. The annual report describes its business asfollows:

We offer a focused menu of high-quality, value priced pizza withtwo types of crust (Original Crust, and Thin Crust), along withbuffalo wings, bread sticks, cheese sticks, chocolate pastrydelights, and Coca-Cola products. Our hand-tossed pizza is madefrom fresh dough produced in our regional distribution centers. Weprepare every pizza using real cheese, pizza sauce made from freshtomatoes, and a choice of high-quality meat and vegetable toppingsin generous portions. Our focused menu and use of premiumingredients enable us to consistently and efficiently produce thehighest-quality pizza.

Over the 41 years since our founding, we have developed a simple,cost-efficient model. We offer a limited menu, our stores aredesigned for delivery and carry-out, and we do not generally offerdine-in service. As a result, our stores require relatively small,lower-rent locations and limited capital expenditures.

How would a master budget support PLANNING, DIRECTING,and CONTROL for Papa John's Pizza?

Explanation / Answer

A budget is defined as the formal expression of plans, goals,and objectives of management that covers all aspects of operationsfor a designated time period. The budget is a tool providingtargets and direction. Budgets provide control over the immediateenvironment, help to master the financial aspects of the job anddepartment, and solve problems before they occur. The masterbudget is a summary of company's plans that sets specifictargets for sales, production, distribution and financingactivities. It generally culminates in a cash budget, a budgeted income statement, and a budgeted balance sheet. In short, this budgetrepresents a comprehensive expression of management's plans forfuture and how these plans are to be accomplished. It usually consists of a numberof separate but interdependent budgets. One budget may be necessarybefore the other can be initiated. More one budget estimate effectsother budget estimates because the figures of one budget is usuallyused in the preparation of other budget. This is the reason whythese budgets are called interdependentbudgets. Papa John's Pizza company's main objective is to offer limitedmenu at a reasonable price. With the preparation of masterbudget (subdivided into major componenets viz. Purchase budget(Original Crust, and Thin Crust), along with buffalo wings, breadsticks, cheese sticks, chocolate pastry delights, and Coca-Colaproducts) /Labor budget(hand-tossed pizza is made from fresh dough produced in our regional distributioncenters.) / cash budget / sales budget / Selling andadministrative expense budget), Papa John's Pizza management canprepare themselves in advance how to accomplish their set task ofproviding take-out menu items at reasonable price and acceptablequality. On the basis of aboveyou can describe Planningprocess, Directing process and control process. Hope this will provide a clear frame of answering yourquestion.

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