Production Costing and Accounting Primer for Bakeries

Production Costing and Accounting Primer for Bakery

Bread is consumed all over the world, and is a staple food in some countries. Bread comes in various sizes, shapes, compositions and price tags to meet the needs of different categories of consumers. The Bread and Confectioneries industry has been growing proportionately to meet up with the demand and will continue to grow as the population keeps increasing. However, the profit margin has been going down as inflation keeps pushing up the cost of production. The challenge before the industry, therefore, is not necessarily about how to produce more Bread—the challenge is how to produce Bread with the lowest possible production cost to maximize profit.

At the moment there are no formal costing methods or procedures specifically designed to meet the peculiar needs of Bakeries. Indeed, existing production optimization techniques can be applied to bread production, just like any other manufacturing process, but the operators in the Bread and Confectioneries industry are not technically prepared or financially equipped to apply these complex methods. This book is inspired by the need to provide them with a formal costing and accounting methods that are easy to understand and implement.

In this book you will find out how to accurately cost and account for the production of Bread and Confectioneries using standard methods and procedures; you will also learn how to optimize your production cost to obtain maximum profit, using simple techniques. The costing and optimization techniques described in this book do not require solving any complex mathematical equations—they are modeled based on empirical data which have already produced great results.

To go with this book is ABC BakerMITS—automated production costing and accounting software for Bakeries. BakerMITS makes the task of implementing the methods and procedures in this book as simple as ABC.

Remember, it does not matter whether you are manufacturing at industrial scale or from your kitchen—the result is the same: If you cannot determine what it costs you to produce a product accurately, you will, certainly, not be in a position to know how much profit or loss you are making until, perhaps, things get out of hands. Now, you have no excuse to let that happen to you.