Mei Mei’s Secret Recipe: Attention to Accounting Details
The success of the Mei Mei Group, which includes its Street Kitchen food truck and more recently, its new restaurant, can be credited to three siblings from the Boston area. Andy, Irene, and Margaret Li’s award-winning food truck serves up creative Chinese American cuisine made with sustainably raised meats and locally sourced produce from small family farms. The Li siblings balance choices that make good financial sense with their business values and practices. The siblings believe cooking and serving food that reflects the humane treatment of animals can make a difference in the local food system, and balancing these values against costs is integral to their budgeting, financial planning, and overall operations. While food costs are a key component of any food service operation, the company agrees that accounting is even more important in the restaurant industry because of its numerous costs and expenses.
1. In Mei Mei Street Kitchen’s accounting equation, what are some of the firm’s assets and liabilities? Based upon this data, what assumptions would you make about its owners’ equity.
2. Identify the types of expenses that Mei Mei Street Kitchen might list on its income statement. How might these expenses vary?
3. Why is it important for a small company like the Mei Mei Group to prepare a regular budget? Discuss what you believe the budgeting process might look like at Mei Mei Street Kitchen as compared to the company’s restaurant.
Doesn’t have to be super long answers, as long as they are correct.
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