A Restaurant Is Deciding Whether It Wants to Update Its

question 8

Essay

A restaurant is deciding whether it wants to update its image or not.It currently has a cozy appeal with an outdated décor that is still in good condition,menus and carpet that need to be replaced anyway,and loyal customers.
Identify for the restaurant management
a.those costs that are relevant to this decision,
b.those costs that are not relevant,
c.and qualitative considerations.

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Definitions:

Standard Cost

A predetermined cost of manufacturing, selling, or any other business activity, used for budgeting and performance evaluation.

Actual Cost

The actual expense incurred to acquire an asset or service, including all amounts spent to bring the item to a usable condition and location.

Fixed Factory Overhead Volume Variances

The difference between budgeted and actual fixed overhead costs, attributed to variations in production volume.

Normal Capacity

The average production or operating levels that a company can sustain under normal circumstances over a period.