Question

Question 1 (7 marks) Just Good Food Catering specializes in a variety of healthy, prepared meals for customers who do not have time to cook and would prefer healthy alternatives. The Company realized that there was growing demand for “healthier” desserts that were gluten free. Therefore in 2019, the Company undertook the development of a healthy desserts by having the marketing team determine the types of healthy desserts the market may be looking for. Early research showed that consumers preferred desserts that were flourless and eggless. Top flavours were chocolate and cinnamon, with vanilla and strawberry a close second. Therefore, the company focused on developing two types of desserts. A flourless chocolate cake made with real cocoa and a gluten free cinnamon cake. Once developed, Just Good Food Catering conducted taste testing at local grocery stores. It was estimated that the chocolate cake would sell more than the cinnamon cake. The Company decides to start making the chocolate cake for distribution; they estimate the product cost to be $6.50 per cake and that they can sell each cake for $9.50. Production costs are budgeted at 300 cakes at $6.50 per cake. Actual production costs are higher than expected at $6.75 per cake, so the company in purchasing adjustments of materials to bring down the cost. The Company calculates its market share to have grown by 2% after the new product is introduced in the market. Required 1. For the scenario above, identify one event for each step of the decision-making process. 2. For the scenario above, identify one planning decision and one control decision.

Answer 1

2. planning is important in the growth and sustainability of an organization. The approval of planning process will require accounting information to make As pes scenario provided, one planning decision is to undertook the development of healthy desserts the market may be Looking for. control is anothes critical process of decision. organization should be able to detect deviations from plan and take appr- opriate action for betterment. As pesscenario provided, one control decision is to detect the actual production costs are highes than expected at $6.75 per cake t down the cost. of materials to bring