Accountant Baked

CookiesBy: Adel Arabi, Eric Graessley, Marisa Carion and Eric Yi

A.B.C.

Mission StatementAccountant Baked Cookies is a worldwide

company created to satisfy the cookie cravings of the world. The purchase of an Accountant Baked Cookie comes with a

guarantee, that your cookie craving will be fulfilled.  At ABC our mission is to provide our customers with a cookie that will satisfy them whatever their mood may be, whether you’re

happy, sad or angry on those days you are sitting at home doing your taxes. Take it from ABC after eating one of our cookies you will

be fully and completely satisfied!

History of the CompanyRealizing that, in hard economic times,

families needed cookies they could afford without having to sacrifice taste. So, a

group of five accounting students created Accountant-Baked Cookies to providing delicious and affordable cookies to all.

With mass-production, ABC was able to lower the per-unit-cost and become the

successful company it is now.

Recipe• Ingredients=• 2 ½ cups all purpose flour• ½ teaspoon baking soda• ¼ teaspoon salt• 1 cup of brown sugar• ½ cup of white sugar• 1 cup of salted butter

(softened)• 2 large eggs• 2 teaspoons pure vanilla

extract• 2 cups of semi sweetened

chocolate chips

• Directions=• Preheat oven to 300 degrees• With an electric blender mix

the sugars• Add butter and mix until it’s

a grainy paste• Add the eggs, salt, baking

soda and vanilla & mix• Add flour gradually and

chocolate chips & mix– DO NOT over mix

• Add rounded tablespoon sized spoonfuls to the cooking sheet

• Bake for 16 minutes

Job Specifications*Cookie Quality: high quality with a good distribution of chocolate chips*Quantity: 77 cookies*Size: 1.5-2” in diameter*Appearance: professional, light brown, round cookies*Special Features: lots of semi-sweetened chocolate chips and a great, homemade taste!*Packaging: Ziploc Tupperware until served

Job Measurements

- Cost per cookie: $0.79- Number of cookies produced: 81- Number of meeting specs: 77- Number rejected: 1- Number reworked: 0- Number sampled (for quality purposes)= 3-Unexplained difference: 0-Cookie Size before baking=

¾ of an inch in diameter-Cookie Size after baking=

1 1/2 -2 inches in diameter

Total throughput time = 200 minutes or 3 hrs & 20 minutes

Mix time = 35 minutes

Bake time per cookie sheet = 16 minutes

No. of cookie sheets processed = 9 sheets

Packaging time = 10 minutes

Cleanup time = 11 minutes

More Job Measurements• What should the denominator be for the cost

per cookie calculation?• It should be the number of all the cookies baked.

In our case it is 81.• What measures would your group use to

effectively evaluate production performance?• All the costs (DM, DL, Mfg O/H), Quantity, Time,

Taste, Consistency (Size, Taste, Appearance), Use of Resources

• What measures were unnecessary? Why?• All taken measures were necessary.

Job Cost SheetJob No:Item:For:

Quantity:Date Requested:Date Completed:

Date Direct Materials Direct Labor Manufacturing Overhead

03/07/2010 $8.86 $37.80 $17.72

Ingredient Quantity CostFloor 5 cups 1.17$ Baking soda 1 tsp 0.01 Salt 0.5 tsp 0.01 Brown Sugar 2 cups 0.50 White Sugar 1 cup 0.30 Salted Butter 2 cups 3.29 Eggs 4 0.66 Vanilla Extract 4 tsp 0.13 Semi SweetChocolate Chips 4 cups 2.79 Total 8.86$

Direct MaterialsPosition Rate Hours Total

Mixer $10/hour 1.08 10.80$ Cook $10/hour 2.7 27.00 Total 3.78 37.80$

Direct Labor

Manufacturing Overhead$2 per $1 of Direct Materials

1244Chocolate Chip Cookies

Accounting 1C

8101/04/1003/07/10

Cost of Completed Job Direct Materials: Direct Labor Manufacturing O/HTotal CostUnit Cost

Item Monthly rate Used (3hrs)Rent 1,000.00 16.30$ Indirect Materials 50.00 0.82 Depreciation-Appliances 33.33 0.54 Insurance 20.00 0.32 Utilities 300.00 4.89 Eq. Maintenance - - Total 22.87$

Actual Manufacturing Overhead

$8.8637.8017.72

$64.38$.79

Manufacturing Overhead Analysis

$2 for $1?We conclude that a few batches of cookies are not sufficient to analyze manufacturing overhead. Better equipment may increase depreciation related expense and increase total cookie output. The extent to which this occurs could drastically alter the actual MFG O/H rate.

Disposing of the Variance:There are a number of ways to dispose of the variation (2.58 actual rate vs. 2.00 estimated). Primarily we would like to have a more efficient operation (greater cookie output) This could be achieved through dedicated facilities, specialized equipment and a more efficient manufacturing line.

“Mmm.. Delicious!”

Thank You! Now please enjoy

you’re A.B.C. cookie!