Manufacturing company includes most of the activities found in other types of organizations as well as restaurants. Activities found in restaurant are both manufacturing and service business.
Restaurants are manufacturing business because they include three classes of inventories - raw materials, work in process, and finished goods as well as cost behavior. Restaurant needs raw materials such as flour, potatoes, tomatoes, onions, etc to create food for its customers. Direct labor enters into work in process, prepares food using those raw materials. Then, finished goods such as pizzas are served to customers.
Cost behavior refers to how a cost reacts to changes in the level of activity and is categorized as fixed or variable. Restaurant's fixed costs will include the cost of the food they prepare using raw materials and serve to customers as well as the cost of the direct labor of wait staff and cooks. Restaurant's variable costs will include rent on the building, depreciation on machinery they use to produce products, etc.
Restaurants are also service businesses because they provide service to public and consider quality cost. The total quality cost of a restaurant may be quite high unless management gives this area special attention. In a restaurant business employees are responsible to provide its customers with quality food and service. Costs for improved technology, or web site where customers submit their feedback are considered to be quality cost. Waitress is an example of employee in restaurant who is responsible in providing good customer service as well as chef in providing customers with high quality meals. If a customer is not satisfied with food, or service she will be unlikely to come back, and will tell her friends about her experience at that restaurant. Management plays an important role in making sure that employees provide good service to customers.
Based on the information above, restaurant is considered to be both a manufacturing and s...