Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The opener for chapter 20 featured Suzy Batlle and her company Azucar Ice Cream Company. As described in the textbook: MIAMISuzy Batlle was new to

The opener for chapter 20 featured Suzy Batlle and her company Azucar Ice Cream Company. As described in the textbook:

MIAMISuzy Batlle was new to running a business when she started Azucar Ice Cream Company (azucaricecream.com). But Suzy knew ice cream, having grown up in a family that ate it nearly every night. We Cuban people love ice cream, exclaims Suzy from her shop in the Little Havana section of Miami. Suzy took classes to learn the ice creammaking process and mastered the permitting process to open her store.

Suzys recipes use tropical fruits found throughout Central and South Americaruby-red guava, mamey, papaya, and plantains, for exampleand stem from an adventurous streak passed down through her family.

My grandmother traveled extensively, explains Suzy, and always made ice cream with the new exotic fruits she found. We have Cuban-inspired flavors you wont see anywhere else.

Ice cream is made in a process operation and produced in large volumes. Ill buy 1,000 pounds of mamey at a time says Suzy. These perishable raw materials enter a continuous production process that also uses direct labor (Suzy has 14 employees) and overhead (depreciation on processing machines, for example).

Each production run yields many gallons of ice cream. Suzy uses a process costing system to determine her production costs per gallon. Suzy credits courses from nearby Miami Dade College with improving her management and accounting skills.

Azucar is flourishing, and Suzy opened a new store in Dallas. Suzy advises, Work hard and love what you do!

Sources: Azucar Ice Cream Company website, January 2021; Saveur , July 7, 2016; Miami Today, February 2, 2016; Mic.com, November 28, 2016

Please discuss the following points as it relates to Azucar Ice Cream Company ("AICC"):

AICC tries to buy raw materials just-in-time for use in production. How does holding raw materials inventories increase costs? If the items are not used in production, how can they impact profits?

How can companies like AICC use yield to improve their production processes?

Suppose AICC decides to allow customers to make their own unique ice cream flavors. Why might the company then use a hybrid costing system?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit And Assurance Study Text

Authors: Get Through Guides

1st Edition

1848080255, 978-1848080256

More Books

Students also viewed these Accounting questions

Question

Show that standard Brownian motion is a Martingale.

Answered: 1 week ago