Hi, this is my group study at AIT Managerial Accounting 2 Course at Seneca College @1503

1. Presented to Professor David Fernihough Course Code : AIT704FR – Management Accounting

2. o Landmark Restaurants, a successful upper-class restaurants
chain in Alberta.
o An upcoming market player in Ontario
o Shane House, the president of Landmark Restaurants in
partnership with Bill Peters owned the Landmark Restaurant
concept through a public company named Bragg Creek
Restaurants
o Plans to accelerate development in Ontario.
o Opportunity to convert Chili Pepper’s Steakhouse locations in
Ontario into new Landmark Restaurants.
o Promising Locations – Vaughan & Newmarket

3. o The brunch business had not “taken off” in Ontario the way it
had in Alberta.
o The week-day lunch business peaked very quickly and lasted
for an hour at best on most days.
o Selling prices were much lower at lunch and the business was
highly inefficient.
o Would Landmark be as financially viable if it did not serve
lunch ?

6. Bargaining Power of Supplier
• Supplier concentration
• Frequency of orders – reduction in price
• Ability to substitute
• Switching cost
Threat of new entrants
• Easy entrance in restaurant business
• Economies of scale
• Geographical factors

7. Bargaining Power of Buyer
• Buyer concentration
• Buyers choice / options available
• Price sensitive
Threat of substitutes
• Cooking meal, take-outs, other restaurants
• Price of change.
Competitive Rivalry
• Plenty of competition – Joey’s, Moxies, The Keg etc.

8. Lunch & Dinner Dinner House (Projected)
Per Guest Total Per Guest Total
Sales $ 3,417,971.00 $ 2,529,300.00
Guest 179,925 115,296
Percentage of guests 100% 64%
Average cheque per Guest $ 19.00 $ 21.94
Cost of Food $ 5.74 $ 1,032,769.50 $ 6.80 $ 784,012.80
Cost of Service Labour $ 1.47 $ 264,489.75 $ 1.47 $ 169,485.12
Variable Kitchen Labour $ 1.52 $ 273,486.00 $ 1.52 $ 175,249.92
Variable Direct Labour Benefits $ 0.73 $ 131,345.25 $ 0.73 $ 84,166.08
Variable Management with Benefits $ 1.31 $ 235,701.75 $ 1.31 $ 151,037.76
Variable Overheads $ 1.80 $ 323,865.00 $ 1.80 $ 207,532.80
Total Variable Costs $ 12.57 $ 2,261,657.25 $ 13.63 $ 1,571,484.48
Contribution Margin $ 6.43 $ 1,156,917.75 $ 8.31 $ 958,109.76
Total Fixed Cost $ 565,803.00 $ 565,803.00

9. Lunch & Dinner Dinner House (Projected)
Per Guest Total Per Guest Total
Sales $ 3,417,971.00 $ 2,529,300.00
Total Variable Costs $ 12.57 $ 3,983,774.00 $ 13.63 $ 3,095,103.00
Contribution Margin $ 6.43 $ 1,156,917.75 $ 8.31 $ 958,109.76
Total Fixed Cost $ 565,803.00 $ 565,803.00
Operating Income
(Contribution Margin - Fixed Cost)
$ 591,114.75 $ 392,306.76
Contribution Margin Ratio
(Contribution Margin/Sales) x 100
33.85% 37.88%
Operating Income %
(Operating Income / Sales)
17.29% 15.51%

10. Lunch & Dinner Dinner House (Projected)
Per Guest Total Per Guest Total
Sales $ 3,417,971.00 $ 2,529,300.00
Contribution Margin $ 6.43 $ 1,156,917.75 $ 8.31 $ 958,109.76
Total Fixed Cost $ 565,803.00 $ 565,803.00
Contribution Margin Ratio 33.85% 37.88%
Breakeven Point (BEP) - Guests
(Fixed Cost / CM per Guest)
87,994 68,087
Breakeven Point in $
(Fixed Cost / CM Ratio)
$ 1,671,595.28 $ 1,493,655.10
Safety Margin
(Sales - BEP ($)) / Sales
51.09% 40.95%

12. Lunch & Dinner Model
• Landmark should continue to operate the Lunch &
Dinner business model in Ontario.
• Value Leadership – Meeting customer expectation as
a upper-casual restaurant chain.
• Financially Viable business model.
Strategy at Lunch Service
• Express Lunch – Faster and improved customer
service.
• Menu Engineering – offer limited selection.
• Effectively manage Cannibalization by product
differentiation & pricing.

13. Strategy at Dinner Service
• Menu Engineering. Eliminate slow moving items .
• Improve efficiency and quality in the value chain.
• Enhance customer dining experience.
Other Factors to enhance profitability & leadership
• Open venues for business lunch Seminars /
workshop, friends & family lunches etc.
• External factors – Contract negotiation.
• Marketing and Branding