Accounting Question

The Product
The company’s only product is soft cookies, of which it makes over 50 varieties. Larger
companies, such as Nabisco, Sunshine, and Keebler, have traditionally The Company
The Lew-Mark Baking Company is located in a small town in western New York State.
The bakery is run by two brothers.The Customers
The cookies are sold in convenience stores and supermarkets throughout New York and
New Jersey.
The Production Process
The company has two continuous band ovens that it uses to bake the cookies. The production
process is called a batch processing system. It begins as soon as management gets orders from
distributors
Inventory
Most cookies are loaded immediately onto trucks and shipped to distributors. A small
percentage is stored temporarily in the company’s warehouse,
Quality
The bakery prides itself on the quality of its cookies. A quality control inspector sample
cookies randomly
Scrap
The bakery is run very efficiently and has minimal amounts of scrap. For example, if a
batch is mixed improperly
New Products
Ideas for new products come from customers, employees, and observations of competitors’
products
Potential Improvements
There are a number of areas of potential improvement at the bakery. One possibility would
he automates packing the cookies into boxes.
Questions
1. Briefly describe the cookie production process.(1 Mark) 150 words
2. What are two ways that the company has increased productivity? Why did increasing the
length of the ovens results in a faster output?(1 Mark) 150 words
3. Do you think that the company is making the right decision by not automating the packing
of cookies? Explain your reasoning. What obligation does a company have to its employees
in a situation such as this?(2 Marks) 200 Words
4. What factors cause Lew-mark to carry minimal amounts of certain inventories? What
benefits result from this policy?(1 Marks) 100 words

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