Accounting Issues Analysis - John Mataeng Case Study - Accounting Assignment Help

Assignment Task :

Topic: Accounting Issues analysis (Group Assignment 3-4 members)

Background: John Mataeng owns and operates a restaurant business in Sydney Eastern suburb area. John started his business from 1 July 2019 as a sole trader. During the first year of operation, his business was quite successful as his strategy to sell quality food at a cheap price appealed to customers well. His business is expanding, but he did not consider the increasing costs of raw materials and labour, and GST which have badly affected profitability. John believes that if he spends money on renovating the kitchen and purchasing new equipments, he could reduce the labour hours / cost and would increase sales volume. 

John had a consulted with a famous architect, Bob the builder, and he received a quotation of $100,000. John needs to borrow money from bank. John requested you for a CVP analysis under his existing structure and also for the new structure if he spends money on the renovation. You found that although the new kitchen would reduce the direct costs of labour and material, the fixed costs would increase so much that the break-even point of output would still exceed the likely level of sales.

You determined to present the Cost benefit analysis in a favourable figure as you believe John is passionate about his business, and he is not a person who would not repay loan based on the previous personal relationship. You have known him for a long time, and both parents are good friends each other.

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