Tour #1: Royal Cake Company

Rating: *** 1/2

Company Overview: Royal Cake Company, based in Winston-Salem, North Carolina, is a manufacturer of cookies, sweet snacks, and pies.

Managerial Accounting Topic: Production costs

Web Site: www.royalcake.com

To Learn More about the Company: From the home page, click on the following links:

1. Products - Read the descriptions of the company's products. 
2. Plant Tour - Learn more about the manufacturing process.

Discussion Questions:

1. What variable costs, fixed costs, and mixed costs would be incurred by Royal Cake Company? (Provide two specific examples of each.)
2. Would the fixed costs identified above be classified as committed or discretionary costs?
3. How would the estimation of costs (using the scattergraph, high-low method, and/or regression method) help a manager make more informed decisions?