Costing Methods

Clifford Brown
November 9, 2011
Wanda Rivers

  Costing Methods
Super Bakery Inc. was a virtual corporation in favor of subcontracting its major business applications. This was with a view of reducing the cost of operation comparative to its levels of income.   By Super Bakery Inc outsourcing, they are able to manage control of the flow of the actions that produced its revenue. This was without essentially attaining to take the   responsibility of accepting the risks involved with every phase of production and operation.   This explains the accomplishment of its goal to decrease expenses. Otherwise, the company   encounters the expenses through the acquisition of pertinent assets for the numerous processes included. These processes consist of machinery for production of the various products, maintenance of the machines as well as their replacement when required, and the expense of production.   Examples of outlays of production include the raw materials cost and other contributions as well as overhead expenses, to include the cost of water, electricity, wages and salaries for the larger number of employees who would have to be directly and indirectly involved in the process (Staubus, 1971). The costs for transportation, as well as finished goods to the countless distribution points is also purged, as is the costs of raw materials storage and finished products before transportation to the target market (Horngren & Foster, 2003).
Super Bakery Inc. utilize the traditional costing methods that depends on recording of the costs for the different businesses it had required to perform the assortment of responsibilities on its behalf. This involved the recording of the company’s individual schedule for all businesses in a way their individual expenses and profits were not independent of Super Bakery’s costs schedule. What this means is the closing cost per product was evenly spread out in its units of merchandise....