Tour #1: ROYAL CAKE COMPANY

Rating: *** 1/2

Company Overview: A manufacturer of cookies, sweet snacks and pies based in Winston-Salem , North Carolina .

Managerial Accounting Topic(s): production costs

Web Site: www.royalcake.com

To Take the Tour: From the home page, check out “products” first. Then go back to the home page and click on “Plant Tour.” (Warning: this plant tour might leave you feeling hungry!)

Question: Chapter Five discusses the behavior of costs and decision making. Based on the virtual plant tour of Royal Cake Company, identify two specific variable costs, two specific fixed costs (identify them as being committed fixed or discretionary fixed), and two specific mixed costs. Also explain how estimating costs (through the scattergraph, high-low method, and/or regression method) will help a manager make more informed decisions.