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Running head: AUNT CONNIE’S COOKIES
Aunt Connie’s Cookies
YOUR NAME(S)
ACC/561
DATE
PROFESSOR’S NAME

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AUNT CONNIE’S COOKIES 2
Aunt Connie’s Cookies
How Aunt Connie’s Cookies could use cost accounting systems to determine their product
costs
Aunt Connie’s Cookies could utilize traditional cost accounting by using a mixture of
materials and labor costs and allocating their expenses to each product. It would assume that the
more cookies are created, the more overhead there will be. This would be a simple approach for
Aunt Connie’s Cookies, but it may not necessary provide them with sufficient data to properly
determine their product costs. Aunt Connie’s Cookies could use activity-based costing, in order
to examine its costs by type of activity instead of end product. Unlike the traditional method, it
would let the company analyze the overall systems with more detail in order for them to see if
there are cost inefficiencies. It would be particularly helpful for Aunt Connie’s Cookies if its
indirect costs are greater than its direct costs. If Aunt Connie’s Cookies were to utilize activity-
based accounting, it would first need to identify its activities, and then designate a cost to each
activity. Once that is completed, a determination of the components of each cost must take place,
followed by data collection for every activity. Finally, a determination of the product costs can
be made by dividing each product into unit-level activities, cost per batch, product-sustaining
activities, and facility-sustaining activities.
Total cost analysis and life-cycle cost analysis can also be used by Aunt Connie’s
Cookies. This would help the company examine its products. It is, however, typically a
component of activity activity-based costing, although it can be used by itself. Life cycle cost
analysis is mostly used for both product development and figuring out the total cost of creating a
product, as in our scenario. Total cost analysis, nonetheless, would probably be the most
beneficial since it is primarily used for purchasing decisions.

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Running head: AUNT CONNIE’S COOKIES Aunt Connie’s Cookies YOUR NAME(S) ACC/561 DATE PROFESSOR’S NAME Aunt Connie’s Cookies How Aunt Connie’s Cookies could use cost accounting systems to determine their product costs Aunt Connie’s Cookies could utilize traditional cost accounting by using a mixture of materials and labor costs and allocating their expenses to each product. It would assume that the more cookies are created, the more overhead there will be. This would be a simple approach for Aunt Connie’s Cookies, but it may not necessary provide them with sufficient data to properly determine their product costs. Aunt Connie’s Cookies could use activity-based costing, in order to examine its costs by type of activity instead of end product. Unlike the traditional method, it would let the company analyze the overall systems with more detail in order for them to see if there are cost inefficiencies. It would be particularly helpful for Aunt Connie’s Cookies if its indirect costs are greater than its direct costs. If Aunt Connie’s Cookies were to utilize activity-based accounting, it would first need to identify its activities, and then designate a cost to ...
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