Costing Method Super Bakery

Topics: Profit, Cost, Costs Pages: 4 (1038 words) Published: August 31, 2012
Super Bakery, Inc. – Costing Methods

Norman Thompson


July 24, 2010

In today’s economy the business world has changed tremendously with the advances of computer systems, global competition, and innovation in technology. Because of these changes businesses compete to keep their products and services profitable as well as keeping a strong customer base. The main challenges for keeping a business successful are managing the cost of services and products while keeping the company lean for better profits. Super Bakery (SB) maintains steady profits by keeping the core functions within the business and outsourcing additional functions. A discussion explaining Super Bakery ways on how the company manages to maintain a solid profit base over the years and which cost system works best for the company.

Strategies of Super Bakery

Dr. Hershkovitz defines a virtual corporation as a business operating as a network of independent companies, customers, and suppliers linked by technology to share costs, skills, and access to one another’s markets (Hershkovitz, 2010). Super Bakery established as a virtual company performs the core functions of the company and outsources other additional services maximizing the company’s profits. The company outsources to a network of third party businesses the services of selling, manufacturing, warehousing, and shipping instead of creating a multifunctional corporation to perform these services. The core functions of the business such as planning, developing goals and tactics, development of new products, company structure, and investing activities could not be outsourced. By performing the strategic core business functions inside the business, Super Bakery maximizes its profits and reduces the company’s expenses. Super Bakery’s sales have increased at an annual rate of 20% since the inception of the company (Kimmel, 2009).

Virtual Business versus Brick and Mortar Business
The term “brick...
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