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Costing Methods: Super Bakery

ACC 561

Costing Methods: Super Bakery, Inc.

Super Bakery, Inc. has a strategy in place that is in place to add maximum value to the company all the while making investments that are minimal. The company initiated an outsourcing strategy; instead of a multifunctional organization by taking activities that were selling, manufacturing, warehousing, and shipping. The outsourced companies will be combined and this will allow for a more organized work flow (Kimmel, Weygandt, & Kieso, 2009).

The managers and employees at Super Bakery, Inc. thought it was a good idea to implement an activity-based costing system (ABC). This system would create a tracking system that would be more accurate on dealing with the costs in each order. By using the ABC system Super Bakery are hoping to improve their pricing and also has different customers that are located around the country (Kimmel, Weygandt, & Kieso, 2009).

In my opinion the activity-based costing system is the best system that was chose by Super Bakery. The ABC system uses unit costs and not total costs, by choosing this method; it will show the costing system a little better. Super Bakery can use the ABC system as a way to track the costs of their products they have to suppliers and distributors. This company believes that because of these reasons this chosen system will work and be effective.

A job order cost system and a process order cost system would not work for Super Bakery, Inc. for different reasons. A job order cost systems would not work simply because the system will assume direct labor costs, and probably would not accommodate outsourcing. The process order costs system counts the hours as activity that is an overhead (Kimmel, Weygandt, & Kieso, 2009). A job order and process order cost system are both

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