For the past 2 years, 3 companies have dominated the high protein sports bar industry holding a combined 80% of the market. Rocket Sports currently ranks second in the market. Its management is considering introducing a new Heatr line of winter protein bars utilizing a groundbreaking new protein form. Rocket Sports produces the bars in a single department and all materials are added at the beginning of the process. As corporate cost accountant you have developed the following cost of production information for the Heatr line.
WIP Inventory: Units Costs
January 1 (50% complete) 2200
Direct Materials $2080
Conversion Costs $620
December 31 (60% Complete) 2000
Direct Materials $1880
Units Started during the year 458500
Materials added 430990
Conversion added 229400
Selling and administrative costs are $1.60 per unit. Each of Rocket Sports’ main competitors is selling a protein bar. Company X sells its bar for $4.10 and Company Y sells its bar for $4.05. Rocket Sports tries to earn a profit of 20% of the unit cost.
1. What factors must Rocket Sports consider in setting their price?
2. Using the average costing method what is the cost per unit?
3. Recommend and defend a unit selling price range for the Heatr protein bars.
Since accounting standards vary from country to country, it is important to understand the causes of these variations as well as identify similarities and differences. Conduct research to locate an article that addresses the differences in accounting standards. Prepare a brief summary of the article and make sure to include the URL of the article. Why do you feel there are so many similarities/differences? How will this impact your career?
Competitive advantage is what sets an organization apart. A competitive edge is a necessary ingredient for an organization’s long-term success and survival. Unique resources provide a company with a sustainable competitive advantage. The four characteristics of unique resources are value, rarity, ability to duplicate, and ability to exploit. Resources that have all four of those characteristics can be used to form sustainable competitive advantages.
Based on the four characteristics of a product with potential for sustainable competitive advantage and based on your conducted research; identify a company that does an effective job of utilizing these resources in the competitive marketplace. Also describe the product in relations to the four characteristics of sustainable competitive advantages.