Snap Fitness

Super Bakery

Even though outsourcing labor in some organizations seems cost-effective, implementing the appropriate costing system is fundamental for success. Super Bakery, Inc. is a coast-to-coast operation started by Franco Harris, a former Pittsburgh Steelers’ running back. Super Bakery is a hub organization where only primary tasks take place. The goal is to extract the maximum value-added from these partnerships while making the minimum investment in permanent staff, fixed assets, and working capital (Davis & Darling, 1996). The decision to outsource is one to lessen initial investment. Strategic roles are the only ones the company performs. Although this strategy proves successful with steady growth at an annual average rate of 20%, better control of outsources activities is what the organization is striving to achieve.

Current company strategy uses the job costing system. Using a job order process accounting system allocates and accrues costs for each specified job. Job order costing fits better for products or services more specific to the customer. Super Bakery makes doughnuts and bakery goods that use different amounts of the same products purchased in large quantities. Job order costing permits further management, less estimating, and straight and consistent distribution of expenses per item. Manufacturing costs are allotted to specific jobs, individual customers, specified orders, projects, and contracts. Job costing is desirable to small and medium-sized organizations including medical and legal services, advertising, custom furniture, and construction.

Process costing system is a method manufacturing industries use to determine complete production cost of a particular unit of merchandise. This type of costing system is for circumstances in which production in a large organization passes through many cost centers. Items that move through many departments of the company would use a process costing system method. Departments include procurement, manufacturing, quality assurance, and distribution. Each of these departments keeps its own budget and as a result, process costing is in place to collect the individual costs each department assumes. This system is not one that Super Bakery would implement because