Aunt Connies's Paper

Aunt Connies's Paper

Aunt Connie’s Cookies Simulation

Alexandra Dunda

ACC/561

March 7, 2011
Cynthia Reyburn

Aunt Connie’s Cookies Simulation

      This paper will describe the prerogatives and choices a successful family owned business (Aunt Connie’s Cookies) is facing in relation to its production of two main products Lemon cream and Mint cream. I have been pointed from Chief Executive Officer (CEO) as a Chief Operating Officer (COO) to be in charge of make decisions to maximize the business contribution margin (CM) and operating process (OP). Seeking this, I will design the best accounting system appropriate to Aunt Connie’s Cookies.
Prerogatives and Choices
      The business is confronting the most common short-term decision in parts where differential cost analysis may be organized.
-Accepting or rejecting special orders
-Making or buying decisions
-Selling or processing decisions
-Reducing or maintain a price decisions
-Add or drop production decisions
-Operate or shut down decisions
      Starting September the business received a bulk order for the production of a million packs of real mint cookies to be completed in a month’s time. I receive suggestions from CEO to grab the order based on contribution margin and operating profits been less for lemon cookies than for mint cookies.
      My decision is to accept the order reducing volume of production on mint cookies seeking to maximize OP by producing more lemon cookies that has a greater CM per unit. It is an Opportunity cost approach in where you give up one alternative for another in order to obtain a benefit that is considered valuable.
      A competitor’s peanut butter cookie manufacturing unit is on sell. The CEO suggested not to purchase the unit because according to projected data is a greater demand for lemon cookies.
      I consider the business must buy the unit and use a Six Sigma beyond a defect-elimination programmer to become a company-wide initiative to reduce costs...