What Are The Pros Of Aunt Connie's Cookies
Aunt Connie’s Cookies Essay ACC/561 January 17, 2011 Dee Price James Abrams
Reflecting on the simulation I see how difficult the decision making process can be for any manager. There are usually several options and pros and cons to each of them. The proceeding essay will describe the prerogatives and choices of a manager and also the need for Aunt Connie to have a cost accounting system. A cost accounting system will help Aunt Connie’s Cookies determine the optimal product costs. The cost accounting system is nothing more than a technique to set the price of a product. The simulation looks at several aspects from; unit pricing, marketing expenditure, break-even point, operations, etc. This essay will elaborate …show more content…
The previous months have shown a decrease in sales due to the increased prices. Maria Villanueva offered some good suggestions but with our budget we very selective in our decision making process on the steps needed to increase sales volume. The prediction tool allowed me to see the relationship between the amount of cookies sold and the decisions I made. By lowering the price on Lemon Crème and the Real Mint cookies we saw an increase in sales, but that alone did not give us optimal results. In order to achieve optimal results we had to increase contribution to the distributors and increase advertising. The contribution margins for both were relatively close so I decided to maximize the potential of the Lemon Crème cookie. October was an exciting month. Aunt Connie received a proposition for a bulk order of a million Real Mint cookies for $1.2 versus the normal price of $1.5 per pack. Maria suggested to reduce the production of the Lemon Crème cookies to avoid maximizing production capacity. I did not agree with her suggestion. The Lemon Crème cookies had a larger contribution margin then the Real Mint cookies, the optimal choice was to reduce the production of the Real Mint cookies at $1.5 per pack to make room for the $1.2 per pack bulk
Reflecting on the simulation I see how difficult the decision making process can be for any manager. There are usually several options and pros and cons to each of them. The proceeding essay will describe the prerogatives and choices of a manager and also the need for Aunt Connie to have a cost accounting system. A cost accounting system will help Aunt Connie’s Cookies determine the optimal product costs. The cost accounting system is nothing more than a technique to set the price of a product. The simulation looks at several aspects from; unit pricing, marketing expenditure, break-even point, operations, etc. This essay will elaborate …show more content…
The previous months have shown a decrease in sales due to the increased prices. Maria Villanueva offered some good suggestions but with our budget we very selective in our decision making process on the steps needed to increase sales volume. The prediction tool allowed me to see the relationship between the amount of cookies sold and the decisions I made. By lowering the price on Lemon Crème and the Real Mint cookies we saw an increase in sales, but that alone did not give us optimal results. In order to achieve optimal results we had to increase contribution to the distributors and increase advertising. The contribution margins for both were relatively close so I decided to maximize the potential of the Lemon Crème cookie. October was an exciting month. Aunt Connie received a proposition for a bulk order of a million Real Mint cookies for $1.2 versus the normal price of $1.5 per pack. Maria suggested to reduce the production of the Lemon Crème cookies to avoid maximizing production capacity. I did not agree with her suggestion. The Lemon Crème cookies had a larger contribution margin then the Real Mint cookies, the optimal choice was to reduce the production of the Real Mint cookies at $1.5 per pack to make room for the $1.2 per pack bulk