Super Bakery
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- Date Submitted: 03/07/2013 04:52 PM
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Costing Methods Paper
Costing methods can vary by organization. Traditional costing methods may suit one organization while activity-based costing methods suit another. Costing method is just one of the many strategies an organization must consider on its quest to becoming successful. Super Bakery Inc. was not exempt from making this decision. This paper will identify the chosen strategies of Super Bakery Inc. and offer a suggestion on whether or not a job order cost system or process order cost system best suits this organization.
Super Bakery Inc. Strategies
As a new company in the 1980s, founder Franco Harris employed individuals with extensive experience in the institutional food business (Davis & Darling, 1996). This strategy proved beneficial in the company’s growth and profitability. Another strategy used by Super Bakery Inc. was market segmentation. Super Bakery Inc. targeted school systems which were in a bind primarily due to stricter health requirements by the government (Davis & Darling, 1996). To earn the business of the segmented market, Super Bakery Inc. developed doughnuts low in calories, enriched with vitamins, and tasty while meeting guidelines of the USDA. This strategy was instrumental in Super Bakery sales growing while doughnuts high in fat were declining in sales.
Another of Super Bakery’s strategies was national distribution of its doughnuts. Super Bakery was able to accomplish this by refrigeration and vacuum sealing. By doing this, Super Bakery was no longer limited to one specific geographic area. A third strategy was just-in-time (JIT) delivery. Super Bakery used government-supported commodities such as flour, butter, and fruit, collaborated with non-competing suppliers (Davis & Darling, 1996). The final strategy in use by Super Bakery is electing to operate as a virtual corporation. This strategy permits the company to reduce overhead expenses and capital investments by outsourcing major functions of the...
Costing methods can vary by organization. Traditional costing methods may suit one organization while activity-based costing methods suit another. Costing method is just one of the many strategies an organization must consider on its quest to becoming successful. Super Bakery Inc. was not exempt from making this decision. This paper will identify the chosen strategies of Super Bakery Inc. and offer a suggestion on whether or not a job order cost system or process order cost system best suits this organization.
Super Bakery Inc. Strategies
As a new company in the 1980s, founder Franco Harris employed individuals with extensive experience in the institutional food business (Davis & Darling, 1996). This strategy proved beneficial in the company’s growth and profitability. Another strategy used by Super Bakery Inc. was market segmentation. Super Bakery Inc. targeted school systems which were in a bind primarily due to stricter health requirements by the government (Davis & Darling, 1996). To earn the business of the segmented market, Super Bakery Inc. developed doughnuts low in calories, enriched with vitamins, and tasty while meeting guidelines of the USDA. This strategy was instrumental in Super Bakery sales growing while doughnuts high in fat were declining in sales.
Another of Super Bakery’s strategies was national distribution of its doughnuts. Super Bakery was able to accomplish this by refrigeration and vacuum sealing. By doing this, Super Bakery was no longer limited to one specific geographic area. A third strategy was just-in-time (JIT) delivery. Super Bakery used government-supported commodities such as flour, butter, and fruit, collaborated with non-competing suppliers (Davis & Darling, 1996). The final strategy in use by Super Bakery is electing to operate as a virtual corporation. This strategy permits the company to reduce overhead expenses and capital investments by outsourcing major functions of the...