Analyzing Costing Methods at Chipotle Mexican Grill

Jordin Lambert ACC 202 Costing Methods The employer I have chosen for this assignment is Chipotle Mexican Grill. I am currently employed at this company and have been for almost 7 years now. Chipotle has developed into a major chain that specializes in fast casual Mexican food. They offer bowls, burritos, tacos, and quesadillas. All food ordered from Chipotle is completely customizable to the consumers preferences. Chipotle also offers in person ordering, online ordering, and catering. At select locations they also offer curbside pick up as well as drive thru pick up. Like other fast-food restaurants, Chipotle is a manufacturing organization. This is because Chipotle is producing tangible goods made through labor while obtaining ingredients through other suppliers. Costing method is the approach, style, or tactic, used by an organization to collect cost data in an appropriate manner. (Mbuva, 2022) Costing methods are vital to any business and assist in calculating, recording, and reporting the cost of a good, product, or service. Accurately using cost methods helps companies to create an accurate number for product cost, operating cost, and profitability. 2 types of methods are job order costing and process costing methods. The job order costing method is used when each product or job has a traceable cost. This method allows the company to calculate the cost of a good based off the cost of materials and labor that go into that product. The process costing method is mostly used when a large number of a particular product is being produced at once. With this method, they are still able to calculate the cost using materials and labor within departments. Within Chipotle, job order costing could be used in each individual restaurant based on those particular stores weekly labor costs for employees as well as their weekly cost of materials. Chipotle could also use the process costing method on a corporate level. At the corporate level the company would be able to evaluate costs of big mass produced materials supplied to each restaurant, for example, tin foil, bowl bases, bowl lids, or uniforms. This method would also allow them to account for labor being used at the