Week 3 acc5301

Essay Instructions:

Cookie Business In this project, you will be opening your own specialty cookie company to see how product costing methods and changes in production affect business decisions. You will be creating a series of reports and analyzing the results using the template provided to guide you through the project. The learning objectives of this project are as follows: Gain an understanding of product costing (direct materials, direct labor, and overhead). Review job order costing. Review process costing. Make business decisions based on analyzing accounting data. You will prepare a four- to five-page written report (including spreadsheets) with at least two scholarly sources using the Unit III Project Template. Your report will provide the following information: Introduction Part 1: Establish a cookie business selling only one type of specialty cookie with two employees making the cookies. Create a name and establish a location for the business. Construct a mission statement for the business. Decide on the type of cookie you want to make and sell. Part 2: Develop costing and sales information for 1,000 cookies (this is the first and only order). Estimate and explain the cost per cookie based on job order costing (manufacturing overhead is 30% of direct labor costs). Prepare a job order cost sheet by researching and identifying the top five ingredients and their estimated costs as your direct materials. Research and identify the cost of wages for your two employees as your direct labor. It typically takes two days to make 1,000 cookies. For process costing, examine the costs per 1,000 cookies looking at these top three processes (departments): Mixing, Add-ins, Packaging. The Mixing Department will be examined in depth (only do this department). All materials will be added in at the beginning of the process. The cookies will be in the Mixing Department for a total of 8 hours (use two employees, 4 hours each as your direct labor). The cookies will be 100% complete with respect to materials, and only be 40% complete with respect to conversion costs (labor and overhead) before they are transferred to the Add-ins Department. Manufacturing overhead is 30% of direct labor costs. Estimate and explain the sales price you plan to set per cookie based on the cost data. Part 3: Compare and contrast the costing methods used in this project, including which you believe provides the most useful information as a manager. Part 4: Discuss what will happen to revenue if the number of the cookies sold increases or decreases. Conclusion and Recommendations Use the Unit III Cookie Project Spreadsheet Templates for your job order, and process costing spreadsheets to be embedded in your case study document.

Essay Sample Content Preview:

Sac Cookie – Job Order Costing Robertkwann V. Taylor Columbia Southern University ACC5301 Management Applications of Accounting Professor Joanne Muniz March 11, 2024 The following reports summarize basic job costs for the launch of "Sac Cookie," a specialty cookie venture located in the heart of Sacramento, California. Notably, the makers of this startup venture hoped the company would deliver a high-quality, affordable, and delightful array of handmade specialty cookies, drawing on the finest local ingredients and culinary expertise. For this report, however, a financial costing and projection for the first batch of 1000 cookies will be provided in greater detail. All in all, it is the company's goal to analyze its financial expenses and create an affordable and memorable brand that resonates with our commitment to quality and craftsmanship. The origins of Sac Cookie lie in the heart of downtown Sacramento, California, where the founders first gained recognition for their 'test products.' Encouraged by the high demand for baked goods, they established their specialty treat shop in the bustling downtown area. With years of baking experience, the owners plan to introduce their flagship product, the "Sac Choco Chip" cookie. This specialty cookie is a perfect blend of locally sourced chocolate and organic ingredients, which promises to deliver a unique taste of Sacramento in every bite. The cookie represents the company's commitment to excellence and innovation in baking, and it will be produced in limited quantities initially, with 1000 Sac Choco Chips being the first batch of sales. The owners hope to establish their brand as a go-to destination for specialty treats in the downtown area, and they are confident that the Sac Choco Chip will be a hit among their customers. With detailed costing and sales information already in place, they are ready to take the next step toward becoming a household name in baking. Part 2 After conducting thorough market research on raw materials, products, and labor costs for medium-scale pastry production in California, the estimated costs are for Sac Cookie's initial offering of 1,000 Sac Choco Chip cookies. To determine the price estimates and the profitable prices of each unit of the cookie, the following costs were computed based on the prevailing market prices in the State of California: 1 Direct Materials amounted to $111.22. This already includes the expense of locally sourced flour, sugar, premium chocolate chips, organic butter, and free-range eggs. Additionally, it must be noted that this category represents the raw materials directly involved in the production of the cookies and may still be subject to price fluctuations (Appendix A). 2 Direct Labor costs are calculated at $64.00. As provided in the report (case), this cost should be ...

Updated on May 29, 2024

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