Costing Methods Essay

353 Words2 Pages
Costing Methods Paper What Strategies did the management of Super Bakery, Inc. use? Super Bakery draws these cooperating companies together and organizes the work flow. The goal is to add the most value to the company while making the lowest investment in fixed assets, permanent staff, and working capital. The results are as fallow: There is approximately a 20% increase on average annual rate in Super Bakery's sales. Why did Super Bakery’s Management think it was necessary to install an ABC System? Do you agree with their reasoning? If you disagree, identify you recommended costing system including your rationale, to management. To control the cost of outsourced activities is one of the most big changes Super Baker, Inc. has. A extended variation in the cost of serving customer nationwide has been suspected by management. However its traditional costing methods were spreading costs over the entire customer base. The cost to complete an order for a customer was the same amount to complete an order. In fact, order with high quantity and profit were been treated the same a low profit margins. Super Bakery wan in the look of a system that would figure out with more certain cost of each order. By having this system, the pricing could be more accurate. The system could be of great revenue results to Super Bakery as mention before. This strategy is a positive plan for the company and will provide more positive changes to Super Bakery’s Challenge. Would a job order cost system or a process order cost system work for Super Bakery. Why or why not? After much research the company end up changing the system; the one that will identify the cost associated with the activities performed in the business of warehousing, shipping, and manufacturing. Super Bakery is now able to track the profit from each customer's account and the performance of
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