Acc 561 - Costing Methods
Autor: AOWEN96356 • February 23, 2012 • Term Paper • 596 Words (3 Pages) • 1,711 Views
Costing Methods
ACC561
December 20 2011
Costing Methods
A supplier of mineral, vitamin, and protein enriched doughnuts Super Bakery was established in 1990. Super Bakery was developed by Franco Harris as a virtual corporation that is a network that supplies donuts and baked goods to the institutional food market. Manufacturing, shipping, warehousing, and selling of Super Bakery is outsourced instead of creating a large multifunctional organization to administer the business.
Super Bakery originally applied the job order costing method to the business. Using the job costing method costs are assigned to specific job orders. The costs are assigned to specific contracts, projects, orders, and customers. The job costing method is most useful in small to medium-sized businesses that provide limited quantities of products or services as it focuses recordkeeping on individual jobs.
To increase its profits Super Bakery implemented a few strategies. First, Super Bakery chose to target schools and those organizations in the institutional food market because of health and reduced funding options regulated by the government. Second, Super Bakery increased its value when it began refrigerating its goods enabling it to reach another area of the market. Third, Super Bakery helped its customers to decrease inventory costs related to stock-outs, offering just-in-time deliveries, and finding commodity items at lower costs that created a solution for school systems and other customers. Last to decrease overhead Super Bakery outsourced its manufacturing, warehousing, and distribution.
Super Bakery’s sales have grown at an annual rate of 20%. Because of this growth management introduced an activity-based costing system
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