Eat My Lunch: Alleviating Child Hunger in New Zealand

The Buy One, Give One Social Enterprise Model

Eat My Lunch is a New Zealand-based social enterprise whose mission is to harness the power of business to alleviate child hunger in New Zealand. The company operates on a “buy one, give one” model, where every time a customer buys any of its meal offerings (e.g., breakfasts, lunches), it gives a lunch to a child in need. To support its operations, Eat My Lunch relies on both permanent and volunteer staff. However, unlike most charities that operate based on donations/grants, Eat My Lunch wants to address child hunger in a financially sustainable way (i.e., making enough profit to sustain its operations). Therefore, accurate product costing is of paramount importance for Eat My Lunch.Required: Research Eat My Lunch’s business environment and operations, and answer the following questions. 1) To calculate product cost at Eat My Lunch, is a job-order costing system or process costing system more suitable? Explain your answers, and be specific about relating your answers to Eat My Lunch’s operations. 2)  Identify five fixed, five variable, and five mixed costs that Eat My Lunch is likely to incur while carrying out its usual operations. Explain your reasons for categorising these costs as fixed, variable, and mixed costs.3) Imagine that Eat My Lunch is currently considering using the activity-based costing (ABC) system. In the context of Eat My Lunch, do you see any potential conflict with the use of ABC system alongside using either a job-order costing or process costing system? Explain your answers. 2 Prepare a report discussing the advantages and challenges of using the ABC system for Eat My Lunch. Be specific about relating these advantages and challenges to Eat My Lunch’s context.