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Variable Costs for Snap Fitness

In: Business and Management

Submitted By magic8ball1125
Words 748
Pages 3
Costing Methods: Super Bakery, Inc.
George Mancuso
ACC/561 Accounting
March 18, 2013
Lisa Parker

Abstract
Super Bakery, Inc., a virtual corporation is a supplier of mineral-, vitamin-, and protein-enriched doughnuts and other baked goods to institutional food distribution centers nationwide (Kimmel, Weygandt, & Kieso, 2009). The company has grown at an average rate of 20% annually since 1990 but persistent challenges of identifying opportunities for cost efficiency in using traditional costing methods requires new strategy. Desire for new “system that would more accurately assign the costs of each order” (Kimmel, Weygandt, & Kieso, 2009, pg. 865), Super Bakery is exploring activity-based costing (ABC) management.
Super Bakery, Inc. In 1990, former Pittsburg Steeler’s player Franco Harris incorporated the Supper Bakery, a nationwide supplier of mineral-, vitamin-, and protein-enriched bakery goods to the institutional food market (Kimmel, Weygandt, & Kieso, 2009). As a virtual corporation, Super Bakery’s core business functions are maintained within the company. Other business functions such as “selling, manufacturing, warehousing, and shipping—are outsourced to a network of external companies… to add maximum value to the company while making the minimum investment in permanent staff, fixed assets, and working capital” (Kimmel, Weygandt, & Kieso, 2009, pg. 865). Currently the company is using a traditional costing method that does not identify the accurate costs associated with business activities, and seeking a new cost accounting method.
New Business Strategy Super Bakery’s current system of traditional costing methods were “spreading costs over the entire customer base… orders with high profit margins were subsidizing orders with low profit margins” (Kimmel, Weygandt, & Kieso, 2009, pg. 865). In hopes of assigning more accurate

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