Northstar Café: Food Cost Accounting
This case explores the vital relationship between the measurement of inventory and income for the restaurant Northstar Café. The case centers on a new accounting intern, Greg, as he learns the intricacies of inventory accounting procedures and their effects on financial statements. After several weeks under the guidance of his informal mentor, Brian, Greg was now responsible for completing the weekly review of inventory count reports and the subsequent profit and loss statement for Northstar’s Beechwold location. With Brian’s help, Greg had already caught a few inventory errors. He was worried there might be more that he was missing. Was there a more efficient way to review these inventory count reports, he wondered?