Costing Methods

Topics: Cost accounting, Cost, Management accounting Pages: 4 (1065 words) Published: December 10, 2012
Costing Methods Paper
Baldomero Garza, Carrie Davis Tsao, Chelse Monnier, Elizabeth Sanchez, Lea Dague, ACC/561
November 26, 2012
Cathleen Davis
Costing Methods Paper
Costing Methods

Franco Harris’ company Super Bakery, Inc. has seen significant success along with continued growth throughout its existence. The authors point out that the company has enjoyed a 20% average growth “during most of its existence” (Kimmel, Weygand, & Kieso, 2009). The purpose of this analysis is to identify strategies used by the company, discuss the agreement for the company to install an activity based costing system, and explain why a job order process system would be another viable option for Super Bakery that can help it maximize profits.

Strategies Used by Super Bakery, Inc.’s Management

Super Bakery, Inc. discovered how to infuse doughnuts and baked goods with protein and vitamins, which they marketed and sold to institutions, such as schools. The Super Bakery founder created a virtual company, and by drawing on cooperating companies and organizing the workflow, reduced staffing needs, overhead, and costs. According to Kimmel, Weygand, and Kieso (2009), “the goal [was] to add maximum value to the company while making the minimum investment in permanent staff, fixed assets, and working capital” (p. 865). To be profitable in the institutional foods market, Super Bakery had to apply strategies that optimized the process. Therefore Super Bakery’s initial strategy was to outsource manufacturing, warehousing, and distribution of its products to decrease overhead expenses and increase capital. The next strategy was to install a tracking system that assigned costs to individual orders. This gave the business a closer look to “identify the costs associated with the activities performed in the business—manufacturing, sales, warehousing, and shipping” (Kimmel, et. al., 2009, p. 865). The last strategy was implementing Just-in-Time delivery decreasing...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Job Costing
  • Advantages of Activity Based Costing Essay
  • Essay about ABC costing
  • Essay on Activity-Based Costing 2
  • Activity Based Costing Essay
  • Essay on Activity Based Costing
  • Comparison of Product Costing Systems Essay
  • Essay about Contributions of Activity-Based Costing (Abc) to the Modern Business Environment

Become a StudyMode Member

Sign Up - It's Free