Readings in Aaccounting for Management Control

Question: Discuss about the Readings in Aaccounting for Management Control. Answer: Introduction: From the above table, it could be stated that restaurant A realises the lowest amount of revenue followed by restaurants B and C. However, the amount of total costs, which comprise of both variable costs and fixed costs, is highest in case of restaurant C followed by restaurants B and A. In this context, Otley Emmanuel (2013) cited that both revenues and expenses are considered in order to ascertain the profitability of an organisation for maintaining its business operations. As the restaurant A has realised a net loss of ($5,000), it is recommended to the organisation to close this particular restaurant, as it would not affect the revenue generation capacity of the other restaurants. Particulars Restaurant A Restaurant B Restaurant C Sales Revenue $ 265,000 $ 325,000 $ 425,000 Variable Costs $ 100,000 $ 167,000 $ 260,000 Fixed Costs $ 110,000 $ 113,000 $ 112,000 Profit $ 55,000 $ 45,000 $ 53,000 According to the above table, it could be evaluated that the sales revenues of the three restaurants of the company have remained identical. However, the changes are observed in both variable and fixed costs of the restaurants. Any change in expenditure amount might change the level of profit of a particular unit (Quattrone, 2016). In this case, restaurant B would realise the lowest amount of profit followed by restaurants C and A. Therefore, the company is recommended to shut down restaurant B for carrying out its day-to-day operations. References: Otley, D., Emmanuel, K. M. C. (2013).Readings in accounting for management control. Springer. Quattrone, P. (2016). Management accounting goes digital: Will the move make it wiser?.Management Accounting Research,31, 118-122.