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Galleta del Valle
Cookie of the Valley
Chefs
Francis Liao Mark
Messenger
© 2010 Galleta del Valle
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
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.
RECIPE
ANALYZING JOB COST
JOB MEASUREMENT
JOB COST CARD
SUMMARY
COOKIES OF THE DAY
ANALYZING MEASUREMENT
ABOUT US 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.
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 mixtureStir in white chocolate chips and macadamia nutsDrop by rounded teaspoons onto ungreased cookie sheetsBake 8 to 10 minutes or until set
RECIPE
ANALYZING JOB COST
JOB MEASUREMENT
JOB COST CARD
SUMMARY
COOKIES OF THE DAY
ANALYZING MEASUREMENT
ABOUT US
Secret RecipeWhite Chocolate Chip & Macadamia
Nuts
** We reduce salt and sugar contents when possible without affecting quality
Galleta del Valle
Job Measurements
RECIPE
ANALYZING JOB COST
JOB MEASUREMENT
JOB COST CARD
SUMMARY
COOKIES OF THE DAY
ANALYZING MEASUREMENT
ABOUT USCategory 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
Galleta del Valle
RECIPE
ANALYZING JOB COST
JOB MEASUREMENT
JOB COST CARD
SUMMARY
COOKIES OF THE DAY
ANALYZING MEASUREMENT
ABOUT US
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
Galleta del Valle
Job Cost Card
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
Chips5.00
Macadamia Nuts
5.00
Baking Soda 0.15
Tot Dir Materials
$15.30Tot Dir Labor
2.35 $18.80 AssignedAt $2 x
DM$$30.60
Job No. 01-2010
ItemMacadamia & White Chip
For Acctg 1C Account
Qty Needed 65 Date Requested 7/31/10Date Completed 8/02/10
o 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.)o 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
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.
DateDirect
MaterialsDirect Labor
Manufacturing Overhead
July 29 $15.30 $18.80 $30.60 Applied
Per unit cost 24¢ 29¢ 47¢
Qty Needed 65
Date Requested 7/31/10Date 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
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 ~
