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The paper addresses four main issues that face the new Chief Operations Officer at the Aunt Connie's Cookies company, including volume and pricing, acceptance of bulk orders and capacity, expansion through a buyout of a competitor and meeting demand through innovation or extended workforce. The paper shows how the leadership for Aunt Connie's Cookies must use cost accounting data to aid in evaluation, planning and decision-making to achieve optimal outcomes.
From the Paper:"The University of Phoenix simulation (2010) states recent price increases have resulted in decreased sales volume and revenue. One option the Chief Operations Officer could implement would be to either raise or lower the prices. Pricing is strategically significant because of the relationship between product volume and profits (Horngren, et al, 2008). Although there is no single strategy to determine pricing, economists have derived several steps needed to develop a sound pricing strategy. These principles include devising a marketing strategy using a comprehensive market analysis approach, defining the marketing mix of product, distribution, and promotions, understanding and estimating the demand curve, calculating the most effective cost by analyzing fixed and variable costs, understanding industry factors, setting pricing objectives, and finally determining the pricing based on the aggregate of information (NetMBA, 2007).
"Decisions on the sales-mix of Lemon Creme and Real Mint cookies must be determined to make the most of production and meet demand. By lowering the prices and increasing volume, sales could increase resulting in improved profits (Horngren, et al, 2008). Conversely, raising or maintaining prices in this scenario could add to already declining volumes, increase excess capacity, and drive profits further down."
Sample of Sources Used:
- Davila, A. and Oyon, D. (2006). The journey of management accounting. Indifference point. Retrieved January 23, 2010 from http://maleafd.com/?q=node/15
- Horngren, C. T., Sundem, G. L., Stratton,W. O., Burgstahler, D., and Schatzberg, J. , (2008). Introduction to Management Accounting (14th ed.). Upper Saddle River, NJ: Prentice Hall.
- NetMBA. (2007). Pricing Strategy. Retrieved January 22, 2010 from http://www.netmba.com/marketing/pricing/
- University of Phoenix. (2010). Aunt Connie's Cookie simulation. Week three course materials. Retrieved January 21, 2010 from https://ecampus.phoenix.edu/classroom/ic/classroom.aspx
Cite this Term Paper:
Using Cost Accounting Systems (2012, March 14) Retrieved September 27, 2022, from https://www.academon.com/term-paper/using-cost-accounting-systems-150568/
"Using Cost Accounting Systems" 14 March 2012. Web. 27 September. 2022. <https://www.academon.com/term-paper/using-cost-accounting-systems-150568/>
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