Dream Chocolate Company: Choosing a Costing System
Analysis of D.C.’s Competitive Environment and Information Need Dream Chocolate (D.C.) is a small company trying to survive in an industry with many competitors. The competitive environment comes from some factors. Firstly, D.C. bars are sold in specialty markets, fine gift stores and also available online. However, the competitive companies can also provide various chocolate bars for customers with the low price on the Internet. Secondly, comparing to the big chocolate company like Mars, D.C. is a small company that has the lower brand reputation. Therefore, there may be not many people would trust their products. On the other hand, facing this competitive environment, D.C. has developed many competitive advantages that could attract customers to choice its products. D.C. Company pursues the high quality chocolate and changes the basic milk chocolate bar into variety of flavors. The company’s niche is European-style custom chocolate bars and labeling, and it is known for its flexibility and speed. A small customer order can be printed, labeled, and ready for pick up or shipping within one hour if the company already has the label in its system, which few company can achieve that level. Moreover, D.C. also faced the pressure from the continued national recession hurt sales in 2011. Thus, in order to deal with the internal and external competitive environment, the D.C. Company needs more business to utilize their capacity and make a profit. The main issue will be training people. It takes up long time to train people adequately. Also, customer labeling needs to be more effectively marketed, which is D.C.’s best margin area. For purpose that the company’s strategy and product can be efficiently carried out, D.C. Company should provide actual cost per order or per unit that can compute the operating margin for the individual products and the allocation of overhead costs that can know whether orders are...
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