Under the old system, the cost-per-serving was spread across all the units uniformly even though they suspected that costs varied across Costing method super bakery country.
Baked goods are batch goods. Feature Story on Super Bakery Inc. Super Bakery used a decentralized system to coordinate a network of providers. Super Bakery draws these cooperating companies together and organizes the workflow.
With such a system, pricing could be improved.
Read the attached feature story on Super Bakery Inc. Yet its traditional costing methods were spreading costs over the entire customer base. Do you agree with their reasoning? However, its established methods were distributing costs over the entire customer foundation.
The company looked at and eventually changed to a system that could identify the costs associate with the activities performed in the business? Management suspected a wide variation in the cost of serving customers in different parts of the country.
While it makes sense the costs in rural Iowa would not be the same as downtown Atlanta, the detail shared in the case story that makes it clear that ABC is needed is the differential size of the orders.
Its challenge has been to control costs. Super Bakery is a virtual corporation, in which only the core, strategic functions of the business are performed inside the company.
That is, they are made, cooked, and wrapped in batches because they are perishable and so The pricing strategy did not differentiate between small and large orders and so the profitability of the orders varied considerably.
The company needed a system that would accurately assign the costs of each order. Installing the activity based system illustrated the cost and profit margins on each sale showed a discrepancy.
Processing cost allows the managers to get detailed information on the baked goods production statistics. Based on Tom R. Davis and Bruce L. They relied on just asking everyone to keep costs down and spreading costs evenly across all sales making the cost of each order uniform.
The goal is to add maximum value to the company while making the minimum investment in permanent staff, fixed assets, and working capital. Process costing also allows management the advantage of ascertaining the same qualities in all of their products, and compares their productivity over time.
When management suspected that the established cost method was making a sizeable difference in its real cost structure, it wanted a new way of assigning their costs. If you disagree, identify your recommended costing system, including your rationale, to management.
What strategies did the management of Super Bakery, Inc. The new activity-based costing system showed that the costs and profit margins on each sale vary significantly. This decision was smart and could have been costly if the company did not recognize the need to change systems.
The results are notable: Why or why not?
Super Bakery desired a system that would more accurately assign the costs of each order. Management reviewed and eventually altered their system to recognize the costs associated with the task performed in the company.
This doughnut maker, as a result, even knows the cost of the doughnut holes! In actuality, high profit margin orders were financially supporting low profit margin orders. In actuality, orders with high profit margins were subsidizing orders with low profit margins.
Would a job order cost system or a process order cost system work for Super Bakery.Resource: Feature Story on Super Bakery Inc. Read the attached feature story on Super Bakery Inc. 1. What strategies did the management of Super Bakery, Inc.
use? 2. Why did Super Bakery's management think it was necessary to. Costing Methods – Super Bakery Janine DesVoignes Accounting /MBAW16K7S2 February 25, David W.
Kochevar Super Bakery Super Bakery is a nationwide supplier of mineral, vitamin, and protein enriched baked goods to the institutional food market. Costing Methods Paper Super Bakery, Inc. is not your typical bakery.
Created init is a nationwide supplier of mineral, vitamin, and protein-enriched doughnuts and other baked goods to the institutional food market, primarily school systems.
Super Bakery, Inc. – Costing Methods Norman Thompson ACC/ July 24, In today’s economy the business world has changed tremendously with the advances of computer systems, global competition, and innovation in technology.
Free Essay: Super Bakery, Inc. – Costing Methods Norman Thompson ACC/ July 24, In today’s economy the business world has changed tremendously with. View Essay - Costing Methods Super Bakery Inc.
from QNT at University of Phoenix. Running head: Costing Methods: Super Bakery Inc. Costing Methods: Super Bakery Inc.