HELP Project Help Needed!!!!

ACC 220: The Cookie Project Activity 1

Job Order Costing

The goal of this project is to allow you to experience some of the problems that a typical cost accountant or a manufacturing manager might face when costing, pricing and budgeting their product. In the final activity we will attempt to determine whether making (manufacturing) the product is worthwhile....or whether we should outsource the production.

Rather than using an imaginary product, you will produce a REAL product that we are all familiar with:

COOKIES!

The bottom line is this; you will 1) produce a batch of cookies, 2) provide evidence of your batch, 3) gather data as you produce, and 4) in later activities, make decisions regarding the future and viability of your product.

There are definite advantages to you, the student, transforming the things that you have learned in the course into a practical application. Do a very good job on the first activity as you will be required to use the data you gather on the rest of the activities.

BE CERTAIN THAT YOU NOTE THE AMOUNT OF TIME IT TAKES YOU TO DO EACH STEP IN THE PROJECT! You will need this data later.

Below are the steps to take for the first activity in this project:

Research (many companies call this research and development) the product you are about to produce:

Select criteria for the product you wish to make. Do you want chocolate chip? macadamia chocolate chip? oatmeal? bourbon balls? etc. Of course, this may be done simultaneously with the next step.

Go to Google and select a recipe for your cookies, or use your own favorite recipe. Try typing in "cookie recipes". If you do not have an oven, try typing in "no-bake cookie recipes".

Select a delicious cookie that might be cost-effective and affordable for you to produce.

For this project you cannot just purchase ready to bake cookie dough.. You need to find a cookie recipe that has at least 3 separate ingredients (not including water).

Purchase your Direct Materials.

I strongly suggest purchasing all of the material you will need for your selected recipe (and your packaging) rather than using things that you have "on hand". You will need your receipt, or an accurate price, in order to determine the COST PER UNIT of the materials.

I also strongly suggest you purchase all your materials on a receipt separate from other grocery purchases you make for your personal use. It will be easier to have one receipt that only includes the materials for your product

Note the amount of time you spend on shopping for the required materials, including your transportation time to and from the store. (Please, do not get a speeding ticket to reduce your direct labor cost by a few cents) J

Determine the COST PER UNIT of your materials. You might try a converter such as onlineconversion.com or bakery converter. Here's an example of what you might do (numbers in the example are COMPLETELY made up!) :

I bought 5 pounds of flour for $1.59

I measured the number of cups in the bag of flour, and there were ten cups.

I determine the COST PER UNIT = $1.59 COST/10 CUPS = $.159 COST per CUP.

My recipe calls for 2 cups 2 * $.159 = $.318 COST per RECIPE or 31.8 cents.

Manufacture (prep, mix, bake, package, and cleanup) your cookies. Keep track of your time in each separate function! In other words, you will engage in several tasks: measuring, mixing, assembling, baking, packaging, cleanup. Try to gather as much data concerning times so you can accurately fill out your job order cost sheet.

Create a job order cost sheet template in Excel. You can see examples in Chapter 19 and/or do a Google images search for job order cost sheet. Its suggested that you should list each individual DIRECT MATERIAL item (actually list all ingredients in your recipe and any packaging materials) and DIRECT LABOR TASKS and their cost individually on your job order cost sheet.

The direct labor rate you will use to pay yourself is $10/hour.

List the time for each task and list all tasks individually that are required to produce your cookies (shopping time, prep work, mixing, bake time, packaging, and cleanup). However, there are a few adjustments you will make for your time:

Shopping time Only record 1/10^th of the time it took you to drive to/from the store and shop. Why?? Because if you were to do this for a real side business, you wouldnt shop for materials after every batch. For this project well assume you need to go shopping after every 10 batches of cookies produced.

Baking time Only record 1/5^th of your baking time. Why?? Because if you were to do this as a real side business, you would be prepping the next batch as the previous batch is baking. Well assume you make 5 batches/day.

Cleanup time Only record 1/5^th of your cleanup time. Why? Because if you were to do this as a real side business, you would only cleanup after the very last batch you make for the day. Well assume you make 5 batches/day.

Assume that FACTORY (MANUFACTURING) OVERHEAD is applied at the rate of $2.00 per DIRECT MATERIAL DOLLARS spent on the recipe. We will hone in on a more accurate rate a little later.

Determine the total cost of producing your batch of cookies by completing the job order sheet you created

Determine the number of individual cookies of finished product that were produced

Determine how many cookies you will put into a package for sale (Recommendation: It should be somewhere between 4-12 cookies/package)

Package your cookies

If you normally attend class in-person, deliver this package to your instructor by the due date. Label the package with your name.

If you normally attend class virtually, take a picture of your package of cookies and submit it to your instructor

Submit the following to your instructor in Connect

Your Excel job order cost sheet

Please put the following in a Word.doc by inserting pictures/screenshots

A copy of the recipe you followed to make your cookies

A copy of the receipt from the purchase of your direct materials

A picture of your packaged cookies

Save all of your cost measurements for the next part of the project.