Capex Depreciation for Yon Jai Restaurant


 


This paper will provide an overview of the expenditure in relation with durability, sustainability and maintenace costs of purchases. This paper will provide depreciation analysis for Yon Jair restaurant. Accordingly, depreciation is an approach of expensing the cost of a fixed asset over the time period in which the business benefits from its use. The depreciation is a process of estimating how much expense should be allocated or allotted to each period.  The cost of restaurant equipment in the Yon Jai restaurant can be considered as high.Hence, there is a need to generate a realistic profit figure against the expenses. Capital cost of equipment is referred to as a cost which represents fixed assets for instance open burner costs ,448.00 and donper ice-maker ,650.00. Nonetheless, the fixed assets depreciate in value over time and that is why there is a very large difference or discrepancy between its auction prices and retail prices. In Yon Jai restaurants for instance, fixed assets are essential for manufacturing a product to turn raw ingredients into finished products.


 There are reasons why fixed assets loose value and this include the usage- wear/tear, emergence of new technology, increased competition in the market and time aspects. Hence, the company should depreciat to have a realistic view of profit by breaking down the durability of the equipments on a yearly basis. There are two approaches of depreciation approach and this includes the straight line approach and the diminishing value.


The straight line method or apporach is the deduction of the equal amount at each time period, which is typically the end of the financial year. Whereas, diminishing value method- is an approach by which a constant rate is used and deducted from the value and then recalculated at the less value in the next period of time. The following calculations were done using


Total $ amount /9 -total $ amount = $ less GST


Diminishing Value Method. The IRD will supply relative percentages and time frames: 14.5% over 5 years. Depreciation is calculated excluding GST.


Name of equipment


Total Price inc. GST


Total Cost Less GST


Rate of Dep-on 14.5%


Year 1


Year 2


Year 3


Year 4


Year 5


 


 


total


4 BUNNER WOK BENCH


5,995.00


5,328.89


772.69


772.69


660.65


564.85


482.95


412.92


2,894.06


SINGLE DIM SUM/NOODLE COOKER


3,998.00


3,553.78


515.30


515.30


440.58


376.70


322.07


275.37


1,930.02


STOCK POT COOKER WITH SLACH BACK-LPG


1,800.00


1,600.00


232.00


232.00


198.36


169.60


145.01


123.98


868.95


DONPER-ICE MAKER


1,650.00


1,466.67


212.67


212.67


181.83


155.46


132.92


113.65


796.53


HAIMAN GRILLER


1,259.00


1,119.11


162.27


162.27


138.74


118.62


101.42


86.72


607.77


3 DOOR DISPLAY CHILLER


4,400.00


3,911.11


567.11


567.11


484.88


414.57


354.46


303.06


2,124.08


3 DOOR DISPLAY FREEZER


6,600.00


5,866.67


850.67


850.67


727.32


621.86


531.69


454.59


3,186.13


CHAR ROCK BROILER


3,030.00


2,693.33


390.53


390.53


333.91


285.49


244.09


208.70


1,462.72


BERJAYA 4 OPEN BURNER+GRIDDLE


3,030.00


2,693.33


390.53


390.53


333.91


285.49


244.09


208.70


1,462.72


4 OPEN BURNER


2,448.00


2,176.00


315.52


315.52


269.77


230.65


197.21


168.61


1,181.76


 


  Durability      


Durable goods are goods with a long usable life in economics. It can be said that based on the provided equipments, majority of the equipment are durable enough to last for five years, unless, the company need some upgrade to maximize their operations.


 


 Sustainability          


Accordingly, sustainability is referred to as humanity’s investment in a system of living. Sustainability characterizes the process or state which can be maintainedat a specific level of idefinitely.  It’s the environmental utilisation which is referred to the potential longevity of vital ecological systems. It can be said that sustainability relates to how long ecological systems can be expected to be productive. Hence, to be able to make the environment better and to improve environmental aspects to become more productive we should think of three R’s: Reduce, Reuse, and Recycle. Therefore, there is a need for people to become more eco-friendly while creating and designing, so its not only looks beautiful but feels beautiful. In the


In the Yon Jai restaurant the main equipments composes of materials which is not easy to destroy, hence, it can help in environmental sustainability, since the management will not easily change the materials and can use it as long as they want or as long as it is still useful and usable .


 


 


 


  Replacement and Maintenance                            


To be able to ensure and guarantee an effective, efficient use and performance, the maintenance of equipments must be considered by the management of the restaurant. Considering a little budget ahead time can help the restaurant save a lot for future needs in the long run. In this regard, equipment will last longer, and may become more efficient and less prone to break down and damages. A proper maintenance program for the resaurant may beging with the assurance that one person understands the correct way of using the equipment and will be accountable and responsible for the maintenance program or approach. The maintenance person usually the utility personnel, should then ensure that all other users follow the correct instructions of usage and monitor equipment in the company. At times, it is better to replace equipment the equipment, especially if it creates danger for the person who will use it. Even it may seem that it is less expensive to repair it can cost more in the long run, especially in terms of occupational safety of the employees. It can be said that the efficiency of consdiering new equipment has improved significantly in the last ten years. Sometimes it can be noted that the energy savings could cover the cost of the system over time. 


 



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