ABSTRACT
The CFO has already expressed a certain hesitation. On one hand, it seems quite reasonable to accept that a 40% reduction in price would result in a loss. On the other hand, the CFO is fully aware that some of the costs allocated to the cost-per-unit of the products might not increase proportionally, if Daily Bread decides to accept the offer. The basic idea of cost accounting, which was developed over a century ago, is that effective cost allocation methods produce a reliable estimate of the cost per unit. Daily Bread is a medium-sized producer of bread and other bakery products. The company sells to supermarkets, bakery shops and hotels. Daily Bread just received an interesting business offer. Events to Remember wants to use Daily Bread products for all their events. In the case of Daily Bread, a concern that either the ovens or the packing line would become a bottleneck has to be verified.
