The restaurant industry is known for particularly low profit margins; this project aims to understand where restaurants spend money and how expenses can be allocated for in this fast-paced environment. Through research of various cost accounting methods and the adaptability of those methods to restaurant culture, activity based costing (ABC) provided the most useful data for the restaurant. This project focuses on small business restaurants, specifically those that serve pizza. The backbone of experimentation for applying these accounting processes is a local pizza restaurant, in which the managers are unaware of how food cost and operating expenses could be combined to provide meaningful cost information. This study analyzes the process of implementing ABC in this restaurant to ultimately contribute to the formation of a deliverable. The product of this process is a guide which will walk restaurant owners through the application of ABC. This research and application process is intended to demonstrate to restaurant owners the purpose and ease of understanding the expenses of the business.
Recommended CitationLambrou, Lena, "Cooking and the Books: A Guide to Restaurant Accounting" (2016). Honors Projects in Accounting. Paper 11.