Dream Chocolates Current Situation and Informational Needs
The chocolate industry is a highly completive industry with many players both large and small. Dream Chocolate faces heavy brand loyalty and price competition from some behemoth companies such as Hershey’s, Mars and Nestle. However, Dream Chocolates also offers wide customization options, which opens them up to the custom niche-market landscape as well. Where Dream Chocolate excels, is its commitment to high quality standards and its unique flavors (such as the pub collection) and its eye-catching labels (PMS Chocolate for Women). Additionally, Dream Chocolate offers flexibility and speed, in that an order can often be ready for shipment within an hour (even on custom orders)! Dream Chocolate, and owner Kay Johnson, prefer to not compete in the marketplace
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This number is vital in job costing. Without the POHR, the manufacturing overhead applied to each job could be skewed, which would provide faulty job profitability data. By applying the overhead based on the cost driver (labor hours) a more accurate picture can be formed. (Although, job costing is not a science and it must be noted that it is still an “estimation”). Following is the POHR for Dream Chocolate company that will be used to calculate job profitability.
Once the POHR has been calculated each “job sheet” is completed using the data. Please note that it is assumed that there are no special ingredients or stir-ins for the following jobs. The hours are the actual hours as reported in Table 5 Panel F of the project. Please note that there is not any information in relation to labor costs for designing, in the future I would recommend that design hours relating to each job be tracked and added to the job cost sheet. In the following charts it is omitted due to lack of data.
Financial Impact of Job