Garnicki Foods makes frozen dinners that it sells through...

Garnicki Foods makes frozen dinners that it sells through grocery stores. Typical products include turkey dinners, pot roast, fried chicken, and meat loaf. The managers at Garnicki have recently introduced a line of frozen chicken pies. They take the following actions with regard to this decision. a. Garnicki performs a taste test at the local shopping mall to see if consumers like the taste of its proposed new chicken pie product. b. Garnicki sales managers estimate they will sell more meat pies in their northern sales territory than in their southern sales territory. c. Garnicki managers discuss the possibility of introducing a new chicken pie. d. Garnicki managers compare actual costs of making chicken pies with their budgeted costs. e. costs for making chicken pies are budgeted. f. Garnicki decides to introduce a new chicken pie. g. To help decide whether to introduce a new chicken pie, the purchasing manager calls a supplier to check the prices of chicken.

Garnicki Foods makes frozen dinners that it sells through grocery stores. Typical products include turkey dinners, pot roast, fried chicken, and meat loaf. The managers at Garnicki have recently introduced a line of frozen chicken pies. They take the following actions with regard to this decision.
a. Garnicki performs a taste test at the local shopping mall to see if consumers like the taste of its proposed new chicken pie product.
b. Garnicki sales managers estimate they will sell more meat pies in their northern sales territory than in their southern sales territory.
c. Garnicki managers discuss the possibility of introducing a new chicken pie.
d. Garnicki managers compare actual costs of making chicken pies with their budgeted costs.
e. costs for making chicken pies are budgeted.
f. Garnicki decides to introduce a new chicken pie.
g. To help decide whether to introduce a new chicken pie, the purchasing manager calls a supplier to check the prices of chicken.

Key Concepts

Relevant Costs

Relevant costs are those that will be directly affected by making a specific decision. In decision-making contexts, only the future costs and revenues that differ between alternatives are taken into account. This concept helps managers focus on the incremental effects of each option and ignore costs that remain unchanged regardless of the decision.

Incremental Analysis

Incremental analysis is a decision-making tool that involves comparing the additional or marginal benefits and costs of one alternative over another. It is used to evaluate whether a specific business action, such as launching a new product, will add value by examining the differences in revenue and expenses directly associated with the decision.

Market Research

Market research involves systematically gathering, analyzing, and interpreting data about consumer preferences and market trends. Techniques such as taste tests and consumer surveys provide managers with information that guides product development and forecasting, ensuring that new product introductions are aligned with market demand.

Sales Forecasting

Sales forecasting is the process of estimating future sales revenues based on historical data, current market conditions, and expected future trends. Accurate forecasts help managers assess whether new initiatives will achieve desired sales volumes and profitability, and they form a critical part of strategic decision-making and resource allocation.

Budgeting and Variance Analysis

Budgeting is the planning process where estimated revenues and costs are set for a future period, serving as a benchmark for performance. Variance analysis involves comparing actual costs to the budgeted amounts to identify deviations. While this control mechanism is essential for performance evaluation, it does not necessarily affect the decision about whether to adopt a new alternative because budgeted costs may include fixed or sunk costs.

Transcript

00:01 So here is a question of chapter 1, the manager and management accounting.

00:05 Here are medicine foods that make frozen dinner and sell it through grocery store.

00:10 They are trying to make a new line of frozen chicken pies.

00:14 So their management have made a couple of statements or doing a couple of things.

00:19 So we have to go through each these statements and will give our opinion.

00:24 What is it for? so the first statement is medicine test.

00:28 Kitchen prepares a number of possible recipes for consumption.

00:31 Focus group they are made a couple of recipes to making for consumer focus groups they're trying to obtain the information by making couple of recipes for consumer and we will get their opinion about that so we will say that it is a or obtaining obtain information a they're trying to obtain information from the consumer b sales manager estimate they will sell more chicken pies in their eastern sale territory then their western cell territory sale is saying that we they will get more sale from the eastern side than then of western side so they are comparing or making a prediction though sale managing making a prediction we can say the sale manager is making the prediction about its sale or what to expect making prediction and what to expect see now we'll go to see manager discuss the possibility of introducing new chicken pie so possibility of new chicken pie so he thinks that the chicken pie is the only thing they try to make.

01:44 I think this is kind of a prediction.

01:46 This is also a prediction.

01:55 The next statement is manager compared actual labor costs of making chicken pies with the budgeted cost.

02:05 So he implemented the decision.

02:07 Now he is comparing what is the actual to the budgeted.

02:12 So we can say that evaluate performance and lunch.

02:15 He is trying to evaluate the performance and learn from it...

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