Super Bakery, Inc.

713 Words3 Pages
Super Bakery, Inc. Joel A Sattazahn ACC/561 University of Phoenix Rashida Heard Super Bakery, Inc. Super Bakery, Inc. is a virtual corporation that is a “nationwide supplier of nationwide supplier of mineral-, vitamin-, and protein-enriched doughnuts and other baked goods to the institutional food market, primarily school systems” (Davis & Darling, 1996). This paper will provide information regarding the strategies the management is using, costing system used, and recommendations regarding what cost system should be in place. Strategies Super Bakery, being a virtual corporation, looks to minimize the necessity of large investments in the in the company. Super Bakery uses the strategy of outsourcing to tie together the business functions and only performs strategic functions within the company; all other functions are performed through a “network of external companies” (Davis & Darling, 1996). The outsourcing strategy allows Super Bakery to minimize on liabilities and expenses such as real estate for storage, manpower, and other related expenses giving Super Bakery to take on more of a business management role rather than being tied in to all of the business functions. ABC System Super Bakery found the necessity to deploy an Activity-Based Costing (ABC) system because of the challenge of controlling the costs of the outsourced activities. Even though the corporation has been growing at an “annual rate of 20%” ABC Bakery management wanted to analyze further into how they could further control costs and increase profitability. What management found was that despite varying profit margins on the orders, it appeared that the cost of each order was the same because the higher profit margins were making up the lower profit margined orders. This made it difficult for Super Bakery to determine from a high level what products may need price
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