Professional Documents
Culture Documents
Student Name:
Student ID:
Course Name:
Date:
1. Background
The reason behind forming the Cookie Factory Company started out with a committee
meeting to decide on the cookie kind, cookie size, cookie yield, and first investment. It was
ultimately agreed to make only one kind of cookie and sell them in two different quantities per
box: two and four. What's more, we're going to send all of our money to Nepal. Next, we divided
up tasks across team members according to their particular strengths. Because we had no idea
how to properly use the oven, we first burned the cookies. Then we got back together to amass
more facts and data prior to calling in an expert. Based on a recommendation from an Indian
restaurant chef friend of one of the company's founders, we decided to produce and market
quality chocolate chip cookies. In order to find the optimal component proportions for the
desired sweetness and smoothness, the creators enlisted the help of taste-testing friends. The
crew started and finished baking the cookies on the same day they bought the ingredients for
testing, which was Sunday, May 17, 2014. Unfortunately, the experiment was a failure since the
cookies were burned. We restocked on ingredients and engaged the help of bakers to ensure that
every batch of cookies was of the highest possible quality and taste. Two dozen cookies were
placed in clear plastic bags with the words "Thank you" written on them. The Cookies Factory
Company produced us videos to promote their cookies and get people talking about them on sale
day. In order to attract customers' attention, we decked up our booth with eye-catching paper,
tasty treats, and promotional images. We zeroed in on educators and learners from all corners of
the world. In less than 90 minutes after the company's May 22, 2015, cookie debut in the APU
cafeteria, more than 400 pieces had been sold. Three variables were utilized to determine how
I. Outstanding decorating - We adorned our booth with vibrant paper that draws customers in
addition to lovely images and fascinating films.
II. Donation to Nepal - We informed our customers that 100% of our profits would be given to
Nepal, which piqued their curiosity and made them happy to make a purchase.
III. Delivery Service - In order to reach as many clients as possible, we placed several cookie
packets on a tray and separated some staff members to stroll around the cafeteria. We are happy
that we can contribute to helping Nepal and are quite thrilled of how quickly our items were sold.
The Cookie Factory team had members who didn’t have any baking experience before the
project. So we thought research & development process would be needed to make cookies for
meeting customers’ tastes. In addition, we were introduced to Keshav Ahuja who was running a
restaurant in Beppu by one of our team member. So we could get good advice on how to make
Points to consider
- Type of cookies that students are willing to buy from our company
Even though students like chocolate chip cookies, we discovered that there would be no
chocolate chip cookies served on selling day because they are too sweet, and difficult to make.
As a result, we decided to make semi-sweet chocolate chip cookies with support from Keshav
Ahuja, chef of Ahuja restaurant. Since the cookies should look nice and interesting, we also used
Equipment
Thanks to Keshav’s help, we were able to use his restaurant between 3 to 5 p.m., when the
restaurant was closed for preparing dinner time. Therefore, we used the restaurant for the R&D
process and pre-sale production process. Fortunately, we also could borrow all the other
necessary supplies – spoons, forks, baking trays, pans, bowls, measuring cups, etc… - from the
Recipe
After our market research, we decided to make chocolate chip cookies. But we did not decide
on the cookie shape until after the first baking practice, because we wanted to make a decision
after many attempts to shape the cookies by hand. Finally, we agreed the shape of cookie - circle
and 5cm in diameter. According to the size of cookie, we concluded a cookie recipe that fitted
our budget and also the expected profit. The final recipe is as follows:
Chocolate Chip··································100 g
Coco powder·····································15 g
Flour··················································85 g
Butter················································125 g
Sugar powder····································30 g
Brown sugar······································30 g
Egg·····················································1
[Directions]
2. Put the butter and sugars into a bowl and beat until creamy.
We spent a total of 1,130 yen on the research and development of 20 biscuits. Through
trial and error, we figured out how long to bake the cookies for and how much sugar and flour to
cookies cookie
Direct Materials
material)
*Notes:
No costs associated with getting there or using the facilities have been included in
since they were provided at no cost (for example, the restaurant let us use their
financial statements.
Following fruitful R&D, we set the retail price of a box of two cookies at 150 yen ($0.02)
and a bundle of four cookies at 300 yen ($3.00). We determined the break-even threshold
in terms of units sold and Japanese yen by factoring in both fixed and variable expenses.
= 3163.22 Yen
= 3,163.22 Yen
Cookie Specification
Because we did not add baking soda to make soft cookies, the cookies retained the same size
and form after baking as they did before. The only kind of cookie we made were chocolate chip
cookies. We packaged them in two sizes: two cookies per box and four cookies per package.
Budgeting
We decided our sales price 75yen per one cookie. And make our budget for final production
is as follows:
Variable Expense JP
Fixed Expense JP
Y
R&D Expense JP 1,130 2.51
After purchasing all materials needed, we did the cookies production part (both baking and
Cookie Production
Number rejected 0
Number reworked 0
Unexplained differences 0
Cookie Size
Bake time for one cookie sheet x Number of cookie sheets processed (2 30 min
Downtime –
Required Comments:
What should be the denominator for the cost per cookie calculation?
We made a total of 450 cookies, but 14 of them went toward quality control samples or
customer tastings on sale days, meaning we lost money on those sales. This led us to divide total
production expenses by the remaining 436 cookies in stock to arrive at our cost per unit.
What measures would your group use to effectively evaluate production performance?
The production efficiency was measured by calculating the percentage of finished cookies
that met quality standards relative to the total number of cookies manufactured. With us, it was
perfect in every way: flavor, look, and consistency. This high success percentage may be
attributed mostly to thorough research and development testing carried out before the real pre-
Since we utilized a squeezer to portion out each cookie onto the baking trays, which made it
simpler to create accurate size, we didn't need to make any cookies over, which reduced the
number of cookies that were rejected, redone, or had inexplicable variances. The fact that we had
previously done extensive testing and recipe revisions throughout the development phase
The job order cost card for our project is illustrated on the next page.
Required Comments:
The true overhead rate can be more than $2 for every $1 spent on direct supplies and labor.
In our instance, however, we were able to complete the majority of the job without spending any
money on overhead since we had access to free resources like water, power, ovens, and so on.
That's why we've settled on a reasonable overhead rate of 0.3 dollars for every dollar of direct
Since the calculated overhead and the actual overhead both came in at 3,766 yen, our
overhead variance was zero. Since there was no overage variance, we did not have to write it off.
Number of cookies produced for sale: 436 Time started: 3pm ; Time completed: 5pm
Manufacturing
Direct Materials Cost Direct Labour Cost
Overhead Cost
Flours 4kg 300 yen 2 hours x 700 yen 0.3 yen 3,766
7 direct
of 100g cost
of 12 eggs
* Note: The Job Cost Card above is based on the following assumptions:
The labor cost per hour of 700 yen was applied based on the fact that this is the minimum
I. Electricity, ovens: these were free since we were able to use all equipment at our
friend’s restaurant.
II. Transportation: we actually bought ingredients for the project when we went
5. Results
Variable Expense
Fixed Expense
In budget, the contribution margin ratio is 24.7 %. On the other hand, the actual
contribution margin ratio is 24.4 %. Even though the overhead cost from the budget was reduce
by half, the contribution margin ratio has hardly changed due to the labor cost has doubled.
(in yen)
Donation
There is a total of 19,547 JPY (Japanese yen) available for contributions. The calculated
total takes into account the hypothetical inclusion of direct labor and overhead expenditures in
operational revenue. In this case, charitable giving accounted for 59.8 percent of total sales.
Variance Analysis
Actual Quantity Actual Quantity Standard Quantity
X X X
Which results in
Variance
The total amount of Japanese yen (JPY) available for donations is now 19,547. The
estimated sum factors in indirect costs and labor costs that may be included in operating income
revenue.
Income Statement
After factoring in both direct and indirect costs, we see a net profit of JPY 6,851. Adding
the expenses of indirect and direct labor to the net income yields the true amount of cash on hand
of JPY 19,547. In this scenario, we just considered the upfront resources needed.
References
www.analyticsvidhya.com/resources-excel/. s
www.youtube.com/user/MyOnlineTrainingHub.
“Superstore.” Www.kaggle.com, www.kaggle.com/shobanama/superstore.