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Accounting Memo
How does replacing employees with ordering kiosks at Panera change its break-even point?
During 2016, Panera Bread Company (PNRA) is building ordering kiosk centers in its cafes. These ordering kiosks will allow customers to browse nutritional content of its menu items and will allow for personalization of menu items. Panera has stated that wait times will be shortened and order accuracy will be improved by using this new technology.
Panera expects to realize labor savings from using the ordering kiosks in place of employees.
The company you work for owns a line of restaurants. The CEO is interested in this concept, but has some questions.
Questions
- Are the kiosks mostly a fixed cost or a variable cost? Explain.
- Would an employee taking orders at the counter be considered to be a fixed cost or a variable cost? Explain.
- How does the change to using kiosks to take orders rather than using employees to take orders change break-even point? Why?
- Are there any other considerations that the company should look at before implementing something like this?
Assignment:
Write a memo to the CEO of the company. (Make up your own name for the company). Your memo should include the following segments: 1) Begin the memo by briefly restating the problem/opportunity; 2) Answer the questions asked by the CEO. 3) Compare alternative courses of action the company can take regarding this; 3) develop your argument for your view while discussing the merits/drawbacks of other options. 4) State your conclusion and the possible consequences of that choice.
Your report should be a minimum of two pages in memorandum form. Memo templates are available in Word (while in Word click on F1 and search for memo). Samples of previous student memos are available under the ‘course content’ tab. Avoid plagiarism; use your own words or cite the source of the information if you are quoting someone else. Points will be deducted for poor grammar or spelling.
To receive credit for the assignment, submit the case in a single file as an attached Word or Open Source document under the assignment section of Blackboard. To attach a file, click on attachments under the “submission” portion of the assignment. Be sure to check the box on the ‘Plagiarism Tools’ line that agree to submit your paper for checks.
