Carrie Dunn Is the Owner and Operator of Dunn's Best

question 107

Essay

Carrie Dunn is the owner and operator of Dunn's Best Jams,which she sells at craft festivals.She makes and sells only three types of jams-pecan pie jam,chocolate pie jam,and lemon tart jam.The joint costs of leasing her professional kitchen for manufacturing,travel to craft shows,insurance,and so on are allocated on an equal basis to the three types of jams sold.Last year's sales figures and allocated joint costs follow.Should Dunn's Best Jams stop selling its pecan pie jam? Why or why not?
$\begin{array}{c}\begin{array}{l}\\\\\text { Sales}\\\text { Less: Cost of goods sold}\\\text { Gross margin}\end{array}\begin{array}{c}\text {Pecan Pie Jam}\\\\\$ 4,000 \\\underline{5,000} \\( \$ 1,000)\end{array}\begin{array}{c}\text {Chocolate Pie}\\\text { Jam } \\\$ 8,000 \\\underline{5,000} \\ \$ 3,000 \end{array}\begin{array}{c}\text {Lemon Tart Jam}\\\\\$ 9,000 \\\underline{5,000}\\\$ 4,000\end{array}\end{array}$

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Definitions:

Company's Strategy

A plan devised by organizations to achieve overarching goals and secure a competitive position in the market.

Work Flow Design

The process of defining the optimal course of action and organization of work tasks to ensure efficient completion of work processes.

Production

The process of creating goods and services through the combination of labor, materials, and technology.

Work Flow Analysis

The study of the flow of work among individuals and groups within an organization, aimed at improving efficiency and effectiveness.