Aunt Connie's Cookies

Running head: AUNT CONNIE’S COOKIES

Aunt Connie’s Cookies

University of Phoenix

ACC/561

Aunt Connie’s Cookies

Connie Rocha created Aunt Connie’s Cookies in 1986 with the assistance of Maria Villanueva, her grand niece. With Maria Villanueva as the Chief Operating Officer the duo has built a successful family run business producing popular Lemon Crème and Real Mint cookies. Basic understanding of accounting systems and practices is important to the success of any business, but especially for a small business without the professional and business acumen of many large organizations. In this paper I will explore how using cost accounting systems to determine product costs will be beneficial to Aunt Connie’s Cookies.

Using Cost Accounting to determine Product Costs

A cost accounting system is a technique used to determine the cost of a product, service, customer, or other cost object. According to Horngren, the cost accounting system is a vital element of a cost management system, which supports all other cost management system tools and resources. Cost accounting systems must be able to provide detailed, timely and reliable cost data so that managers can be informed decisions about production, pricing, competitive approach, future investment and other issues, (Kucera, n.d.). For a small business unreliable information could possible end their business. For a small business operation such as Aunt Connie’s Cookies a reliable cost accounting system in place is crucial to the life and success of the organization. Aunt Connie’s Cookies have been experiencing a reduction in sales based an increased pricing strategy. A cost accounting system can assist management in decision regarding best pricing in the competitive environment. In addition to deciding on pricing, management can make informed decisions regarding taking orders outside of their normal production scope. With a good understanding of variable expenses and costs changes with...