This case puts forward the apparentlynaïve, easy and direct question, "what is the cost faced by Wendy’s in preparing a bowl of chili?” this is because a large portion of the meat used in preparing the chili is used from the overcooked hamburgers, however, thequery of cost distribution rises. Wendy's is contemplating introducing a salad bar to its "limited menu" and is thinking about if should then do away with a current menu item. A decision of this sort needs an assessment of current item-profitability.
Chili 8 ounce Cost
Total cost of Ingredients
Cost of 57 Chilis
Cost of one 8 ounce Chili
Other Direct costs
Cost of a packed 8 ounce Chili
Time taken for Chili Preparation
How was Wendy’s able to achieve its initial success and to grow so rapidly at a time when the quick service hamburger business appeared to be saturated?
What benefits might have resulted from Wendy’s’ “limited menu” concept? What were the disadvantages of such a concept?
Why was the concept eventually discontinued?Why was Wendy’s’ drive through window successful when other quick-service- restaurant chains had been unsuccessful at implementing the same concept?
How much does a bowl of chili cost on a full cost basis? An out-of-pocket basis?
For determining the true probability of chili, how much does a bowl of chili really cost?
Would you recommend dropping chili from the menu? Why or why not?