You own the Sweet Cheeks Baking Co. and you employ one baker working with you full time that you currently pay minimum wage. You just got a contract to bake 24 dozen chocolate chip cookies for a customers party.

Requirements:

• Create a bottom-up estimate which includes both items needed for the project and their cost. Also, consider your bakery overhead rate of 35% applied to the direct materials and direct labor.
• Based on your bottoms-up estimate and profit rate, how much should the baker charge for the cookies? When estimating this project, please base it on actual recipes found on the internet and provide a copy of the recipe showing the materials (ingredients) needed along with the time needed. The ingredients should be based on current pricing at your local grocery store, and you will need to decide which ones would be considered direct material (ingredients) and which ones would be considered indirect.
• Also, in addition to considering profit/fee, also consider current competition by pricing cookies at your local bakeries and comparing with the price you are calculating so that you stay competitive with local bakeries.
• (Assume the overhead rate considers employee benefits, utilities, rent, indirect materials (baking supplies), etc.)
• (Make sure you document all assumptions and provide support for any numbers provided.)