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A Practical Application of Managerial Accounting

We discussed the Starbucks closing in class last Wed. Well, here is what managerial accounting is all about. 

Is the space that Starbucks vacating available?  If so start studying up on alternatives, perhaps
Mocha Java in San Marcos. A local in San Marcos started his own starbucks type venue in two locations and has been going strong. As one student remarked Wed, I have always seen a line at the drive up window a the present Starbucks location by the whataburger. 

So rent the same space and be ready to open the day after Starbucks closes.  Mocha Java only uses one coffee bean and multiple variations of the with various flavors, hot cold, you know the routine, and of course uses students from Texas State for workers. I would add I saw the owner running the place for the first two years. My guess is that one could build on the traffic begun by Starbucks. 

The concepts of break even, target profit, and budget as well as TQM will all be necessary to make a go of it. Standard costs and variances from Chapter 10 will certainly be necessary as customers will expect exactly the same taste every time for each variation.  See what this is all about?

And you will need to be able to tear apart your financial statements week to week to track your progress. 
Gross margin will be terribly important. 

Just another example of what this course is all about. 
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2 responses to “A Practical Application of Managerial Accounting”

  1. Tammy Salinas Avatar
    Tammy Salinas

    Managerial Accounting will be key if Mocha Java takes the space. Going by pure facts, there is a reason Starbucks did not do as well as they thought they would so they were forced to make a decision. Keeping an eye out on Gross Margin week by week will give Mocha Java a clear picture and they will be able to change their strategy to ensure that they are not at a loss. Perhaps Mocha Java can incorporate some ‘lean’ business practices as well to ensure they save and keep waste minimal.

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  2. Chris Sims Avatar
    Chris Sims

    I would have to agree with Tammy, in means that Starbucks did make a major decision to close the store on Highway 16. It does seem that they will be changing the strategy in means of business in ways they are doing business at all its locations.

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