The company needed a system that would accurately assign the costs of each order. Conclusion In the end I like what this company is doing with outsourcing its business to other companies that specialize in specific areas; this allows the company to reduce the overhead it would have with performing the tasks themselves.
I actually like these strategies in this particular case so let me explain myself: 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.
Using this costing method will help the company evaluate and control cost in the future. Process order cost system would work for Super Bakery because process costing will put in the cost based on the average number of doughnuts and other baked goods produced per day. In our discussion this week we will discuss Awesome Baker Inc.
I think that job order costing because it can evaluate how much a particular job or service is costing a company, this is exactly what this company needs because it is experiencing some difficulty in evaluating the true cost of the services that it is getting provided by through outsourced affiliates.
However, its established methods were distributing costs over the entire customer foundation. This decision was smart and could have been costly if the company did not recognize the need to change systems. Strategies The strategies that Awesome Bakery Inc. In many instances companies that operate in different areas of the country or globe are suspect to higher prices or taxes in their business dealings using this costing method would help to balance the difference in cost in different areas and under different circumstances.
In actuality, high profit margin orders were financially supporting low profit margin orders.
Management reviewed and eventually altered their system to recognize the costs associated with the task performed in the company. 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. I favor this type of strategic initiative because the business limits its exposure to financial risk of doing business, in many cases this form of doing business would not work well, for example with a service company I would not favor this form of doing business because it is not very personal with customers but for Awesome Bakery Inc.
Leave a comment Costing Methods Paper Having an understanding of how you want to run a business is very important; companies want to know if it would be better to outsource its job related activities to other companies or higher its own staff and assume the cost associated with doing business in this form like higher labor and variable cost.Costing Methods Paper ACC/ October 6, Costing Methods Paper Would it be better to use the variable or absorption costing method, and why?
In this. Costing Methods Paper Lavelle Haynes ACC/ February 14, Professor Micheal Gaspar Super Bakery is a distinguished company created in The company has is a supplier of mineral, vitamin, and protein enriched doughnuts.
The strategy applied by the company is job order cost method. Job costing is a product costing system when costs are. View Notes - COSTING METHODS PAPER Week 4 ACC from ACCOUNTING ACC at University of Phoenix.
Costing Methods 1 Costing Methods ACC December 20 Costing Methods Costing Methods 86%(7). Costing Methods Paper Former Steelers’ running back Franco Harris created Super Bakery Inc., in “Super Bakery is a virtual corporation, in which only the core, strategic functions of the business are performed inside the company.
The remaining activities—selling, manufacturing, warehousing, and shipping—are outsourced to a network of external companies”. Running head: COSTING METHODS PAPER 1 Costing Methods Paper Patsy Brown ACC/ Accounting June 9, Julio Jimenez COSTING METHODS PAPER 2 Costing Methods Paper Absorption costing is a costing method where all manufacturing costs are charged to, or immersed by, the product.
It is used for. Costing Methods Paper. Having an understanding of how you want to run a business is very important; companies want to know if it would be better to outsource its job related activities to other companies or higher its own staff and assume the cost associated with .Download