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Galleta del valle 2010 s

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  • 1. Galleta del Valle Cookie of the Valley Chefs Francis Liao Mark Messenger © 2010 Galleta del Valle
  • 2. Galleta del Valle
    • Cookie of the Valley
      • ABOUT US
    • Founded in the heart of the Silicon Valley and named in recognition of California’s rich and spirited Spanish cultural and culinary heritage.
    • We carefully make delicious baked goods that bring sensory delights to our customers.
    • Net profits of Galleta del Valle are donated to various initiatives that help build world peace – which is the driver of our goal for ‘mo profit’.
    • To solicit your confidence, in this presentation we reveal a sample of our secret cookie recipes, measurements of how we approach our job, and all of the job cost assumptions.
    • We invite peace-loving folks like you to become our lifetime Cookie of the Valley Preferred (CVP) program member. Every $10 donation will yield you 6 cookies and few more steps toward world peace.
    • Please send one-time CVP membership initiation fee ($50) to:
    • Galleta del Valle
    • c/o Accounting Department
    • De Anza College
     RECIPE ANALYZING JOB COST JOB MEASUREMENT JOB COST CARD SUMMARY COOKIES OF THE DAY ANALYZING MEASUREMENT ABOUT US
  • 3. Galleta del Valle
    • Cookies of the Day
    • White Chocolate Chip & Macadamia Nuts
      • JOB SPECIFICATIONS
    • To make 60 specialty cookies for sale – first priority to our members.
    • Appearance – cookies should be in light brown color with chips & nuts visible.
    • Taste – not so sweet so as to suggest calories conscientiousness.
      • Packaging – individually wrapped when necessary, but purposely not overdressing it.
      • TASK ASSIGNMENTS
    • Job tasks are split 50-50 between two chefs.
    • One in charge of operations and the other of sales & admin.
    • We develop measurements and analyze costs together.
    • We thought of recruiting an advisor, but concluded that it was not a wise idea.
     RECIPE ANALYZING JOB COST JOB MEASUREMENT JOB COST CARD SUMMARY COOKIES OF THE DAY ANALYZING MEASUREMENT ABOUT US
  • 4. Galleta del Valle
    • Ingredients
    • Standard batch each for
    • About 30 cookies
    • .
    • 1 cup butter, softened
    • 1 cup granulated sugar
    • 3/4 cup light brown sugar
    • 2 teaspoons vanilla
    • 1/2 teaspoon salt
    • 2 eggs
    • 2 1/2 cups all purpose flour
    • 1 teaspoons baking soda
    • 10 ounces white chocolate
    • 1 cup chopped macadamia nuts
    • Instruction
    • Heat oven to 375F.
    • Beat butter, sugar, vanilla, and salt until creamy. Then add eggs and beat well.
    • Mix flour and baking soda and then add to butter mixture
    • Stir in white chocolate chips and macadamia nuts
    • Drop by rounded teaspoons onto ungreased cookie sheets
    • Bake 8 to 10 minutes or until set
    Secret Recipe White Chocolate Chip & Macadamia Nuts  ** We reduce salt and sugar contents when possible without affecting quality RECIPE ANALYZING JOB COST JOB MEASUREMENT JOB COST CARD SUMMARY COOKIES OF THE DAY ANALYZING MEASUREMENT ABOUT US
  • 5. Galleta del Valle
    • Job Measurements
     RECIPE ANALYZING JOB COST JOB MEASUREMENT JOB COST CARD SUMMARY COOKIES OF THE DAY ANALYZING MEASUREMENT ABOUT US Category Item Measurement Throughput Time (in minutes) Mixing 15 Baking 10 Cooling 30 Packaging 30 Downtime & Cleanup (use baking & cooling time) Cookie Size Before Baking 2.5” After Baking About 3.0” Cookies Made # Met Specs 65 # Rejected 0 # Reworked 0 # Sampled /QC 5 # For sale 60 Cost (Expected) Per Cookie $0.90
  • 6. Galleta del Valle
    • About Measurements - FAQ
    • What was the denominator used for the cost per cookie calculation?
      • We divide total production costs by total number of cookies made
    • What measures did Galleta del Valle use to evaluate production performance?
        • We used (1) job specs and (2) job measurements as benchmarks to evaluate production performance
    • Were there any measures that you would take out next time? Why?
          • We might not measure throughput activities separately and linearly - certain activities can be done in parallel, for example, we can cleanup while cookies are being baked or in cooling stage thereby better utilizing time. Chefs must multitask.
     RECIPE ANALYZING JOB COST JOB MEASUREMENT JOB COST CARD SUMMARY COOKIES OF THE DAY ANALYZING MEASUREMENT ABOUT US
  • 7. Galleta del Valle
    • Job Cost Card
    Job No. 01-2010 Item Macadamia & White Chip For Acctg 1C Account  Qty Needed 65 Date Requested 7/31/10 Date Completed 8/02/10
    • Assumption 1 - Actual overhead in our case may include a total monthly costs of $2,000 :
      • ($1,000 Shop rental, $200 Utilities, $300 Baking equipment depreciation and $500 Selling & Admin.)
    • Assumption 2 – Each production task is not separately paid – we are paid hourly rates above minimum wage at $8 per hour and multitask. Our output is limited to what maximum cookies our ovens can bake.
    Total Cost (DM+DL+OH assigned) = $64.70 Unit Cost (for Qty needed) = $1.00 RECIPE ANALYZING JOB COST JOB MEASUREMENT JOB COST CARD SUMMARY COOKIES OF THE DAY ANALYZING MEASUREMENT ABOUT US Direct Materials Direct Labor Mfg Overhead Items Costs Tasks Hour Costs Items Expenses Flour $0.25 Purchasing 0.50 $4.00 Equipment Fixed rental  Butter 2.00 Measuring 0.25 2.00   Utility Mixed  cost Granulated Sugar 0.50 Mixing 0.25 2.00 Indir. Mat. Variable cost Brown Sugar 0.40 Baking 0.75 6.00   Indir. Labor Fixed nominal  Vanilla Extract 1.00 Packaging 0.50 4.00     Eggs 1.00 Clean-up 0.10 0.80     Chocolate Chips 5.00     Macadamia Nuts 5.00             Baking Soda 0.15        Tot Dir Materials $15.30 Tot Dir Labor 2.35 $18.80 Assigned At $2 x DM$ $30.60
  • 8. Galleta del Valle
    • Analyzing Job Cost
    • Is the $2 overhead rate reasonable?
      • If we make, say, 5000 pieces a month, on a per unit basis the overhead costs could drop to 40 ¢ .
      • Using $2 per $1 direct material rate, or in our case, 47 ¢ cost per unit, would have over-applied the overhead.
    • What’s our consensus on disposing of overhead variance?
      • The over-applied overhead, we agreed, should be credited to the cost of goods (cookies) sold account, thus enabling us to recognize slightly higher profits.
     Qty Needed 65 Date Requested 7/31/10 Date Completed 8/02/10 Job No. 01-2010 Item Macadamia & White Chip For Acctg 1C Account Total Cost (DM+DL+OH assigned) = $64.70 Unit Cost (for Qty needed) = $1.00 RECIPE ANALYZING JOB COST JOB MEASUREMENT JOB COST CARD SUMMARY COOKIES OF THE DAY ANALYZING MEASUREMENT ABOUT US Date Direct Materials Direct Labor Manufacturing Overhead July 29 $15.30 $18.80 $30.60 Applied Per unit cost 24 ¢ 29 ¢ 47 ¢
  • 9. Galleta del Valle
    • Summary
    • We will continue to improve the cookie quality to help increase our sales volume.
    • We also want to achieve a lower production cost.
    • The combination of better quality and lower unit cost should ultimately improve our overall profits. And you know what that would lead to.
    • Please remember to send in your membership initiation fee to:
      • GALLETA del VALLE
      • ~ COOKIE of the VALLEY ~
     RECIPE ANALYZING JOB COST JOB MEASUREMENT JOB COST CARD SUMMARY COOKIES OF THE DAY ANALYZING MEASUREMENT ABOUT US