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Super Bakerys management - Essay Example

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Controlling the cost of the activities that are outsourced was the biggest obstacle for the corporation and the traditional methods of costing that they employed was spreading the costs over the whole customer base. However, job costing is s system of product costing whereby the…
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Super Bakerys management
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Super Bakery’s management Super Bakery’s management Strategies implemented Controlling the cost of the activities that are outsourced was the biggest obstacle for the corporation and the traditional methods of costing that they employed was spreading the costs over the whole customer base. However, job costing is s system of product costing whereby the costs are accumulated by particular job orders and then assigned to the batches of products. The aim of this is computing the cost per job at every point in the provision of service or manufacturing of product; the corporation can identify the job together with its related costs (Drucker, 2006).

Job costing system is the most preferred by most medium-sized and small corporations, like the professional service such as legal and medical; advertising companies; shipbuilding; construction; manufacturing of furniture or custom equipment. Installation of an ABC systemThe installation of the ABC system by the company was the best decision made, since with this system they were in a position of allocating overhead to several activity cost pool, consequently assigning activity cost pools to services and products by way of cost drivers (Drucker, 2006).

The company decided to adopt this system since it wanted to be in a position of determining the costs of production as it was no longer involved in the direct production of its products. Job order cost system or a process order cost systemThe job order costing would greatly fit into the structure of Super Bakery as its strategies can accommodate it very well. It would help the company in determining the costs that are associated with particular products (Drucker, 2006). This system will also enable the company to establish the production cost per unit without having to include the unrelated costs since it outsources its manufacturing.

ReferencesDrucker, P. (2006). Management Challenges of the 21st Century. New York: Harper Business, 1999.

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