EOC Week 10 My Plans

     Here we are, I'm pretty sure I am just ecstatic to even be in this situation. To think that I have a good chance at succeeding in this class means a lot to me. At the beginning of this quarter, I really did not think that I would get anything useful out of this course. Well, fast forward to now and I think I have a pretty good understanding at how accounting works in the hospitality industry. Looking at everything in hindsight, it seems that this quarter went by way too quickly. I went from being befuddled with the course material to actually getting an actual understanding with the subject. To be honest, I  really did not think that I would make it through this class, but somehow I managed to keep my head down and persevere through the adversity that I created for myself. I'm just glad that I at least know the basics to some degree. Frank is the real deal, that I can tell you. He genuinely cares about your success as a student and further on after graduation. What I mean about that is that he will go out of his way to make sure you do what you need to do. He is relentless with that, and for that I thank him. Now to say that I would actually open up my own business would be a long shot, but if I were to do that, well I have the basic understanding when it comes to the hospitality industry and accounting. With that knowledge in hand, I would know what I would have to do in order to keep the business afloat, right? To know what decisions would endanger me and my employees or which ones that would help us reap the fruits of our labor. With that being said, "You miss 100 percent of the shots you never take." - Wayne Gretzky

EOC Chapter 9 Question 3

1) If they decide to go the route of purchasing the restaurant, some fixed costs would be incurred. Those five; insurance, property tax, rent/mortgage, employee salaries and utilities. "A fixed cost is one that remains constant despite increases or decreases in sales volume (number of guests served or number of rooms sold)." (316)

2) To operate the restaurant, the variable costs would be; direct materials, commissions, production supplies, credit card fees and food costs. "A variable cost is one that increases as sales volume increases and decreases as sales volume decreases" (317)
3) Taking this into consideration, both decisions are very important. I think the flexibility of a good manager that is able to utilize variable costs far outweigh the options that are given with fixed costs. Lorelei can either reap the profits or watch the ship sink the restaurant.  "Good managers seek to decrease their fixed costs to their lowest practical levels while still satisfying the needs of the business and its customers. Those same good managers, however, know that increases in variable costs are usually very good!" (318)