Accounting

Accounting

Introduction

The prime bakery is situated in the center of London, we are operating with clear mission and that is provide customer excellent quality of bakery food, at twenty-four hours a day. In addition to this prime bakery is also known to providing best quality services to its customer.

Further, this company is operating since 1995, and has able to introduce its business in most part of London; the management of the bakery is positive in maintaining its quality standards, and sustains their customer loyalty. Hence, for a purpose we are also planning to extend our product range for instance, we are planning to introduce, branded cakes manufactured at our stores, new snacks, verities in sweets and others.

Further, the management of the bakery always tries to provide extra benefits to its loyal customers, for instance in last Christmas the management of the bakery arrange coupon of famous Christmas function that took place every year for its loyal customer. Similarly, management is also planning something unique for Christmas and New Year eve (Oliver, 2000)

Q1) Identify activities that generate costs to your business. You need to identify at least three activities.

Our bakery is used to generate cost from three major activities and those are purchasing of product, baking, and supply of product to local stores. For instance, in bakery cost is generated in the purchasing department for the purchase of wheat, flour, salt, sugar, and other useful ingredients.

Similarly in baking department, the cost was generated from instruments like gas, electricity bill, percentage of material used in production of bakery foods, and finally in supply department we generate cost of fuel and other travelling expenses like, repairing of bikes, license expense and insurance of employee (Needles et al, 2010).

Q2) Identify the cost drivers for each activity.

Activity Cost driver

Purchasing no of purchase orders

Baking Machine ...