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Just in Time for Valentine’s-Noka Chocolate

Noka_chocolateFrom accounting bean counters to chocolate bean counters.  Yep a couple of CPAs in Plano have founded Noka Chocolate   click for the website and take the video tour.

As you can see they are making their own gourmet chocolate.  What have we learned in cost accounting that would help them succeed at this task?  Can you see how important cost control is in a manufacturing start up enterprise like this?  How would you use budgeting, standard costing, and target profit to help you succeed here?

If they are still going strong after three years, it is no doubt their accounting expertise is being put to good use.  So tell you sweetie to hold for a valentine, we understand that some of their chocolate goes for, no typo, $2,000 per pound!

DLE

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2 responses to “Just in Time for Valentine’s-Noka Chocolate”

  1. Kimi Pope Avatar
    Kimi Pope

    Well I took cost last Summer so I would definately need to review the concepts for management accounting. What I remember from microeconomics is that to maximize revenue, the company should set price where marginal revenue equals marginal cost. This is valid only in perfect competition, but I do think that the chocolate industry counts as perfect competion and not as a monopoly. I believe too that in order for the buisiness to enter into the long run, it would be all variable costs (no fixed costs). They can use the budgeting as a means of tracking their progress and ensuring that their costs do not rise. But wow, for $2,000 a pound you have to wonder where their target market is.

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  2. Dennis Elam Avatar
    Dennis Elam

    Kim
    I think the economic concept invovled here is ‘inelasticity of demand’ ie, demand stays strong when price goes up! I am sure they have targeted standard costs for producing the chocolate and no doubt it provides for a substantial contribution margin, sales per unit minus VC per unit
    DLE

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