Bake Me a Cake
The sole proprietor of a small cake-baking and cake-decorating business needs to make some decisions regarding the company’s future. The company’s growth has brought new challenges including possible space constraints. The desire to improve profitability and to take the business to the next level leads the owner to consider increasing prices and the development of a new advertising strategy.
This case covers many of the concepts taught in an introductory managerial accounting course. It is best suited for second-year or higher-level managerial accounting courses at the undergraduate level. The case may serve as a comprehensive case or can be used as a testing point. Case analysis requires students to complete the following: 1) corporate size-up, (2) industry analysis, (3) competitive analysis, (4) analysis of a statement of cash flows, (5) analysis of financial ratios, (6) differential analysis for the location decision, (7) contribution analysis for the pricing decision, (8) development of an advertising plan and (9) preparation of projected financial statements (statement of earnings and statement of financial position).
Cost/Benefit Analysis; Contribution Analysis; Advertising; Pricing; Canada
Accommodation & Food Services
Canada, Small, 2012
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