COST MANAGEMENT PRACTICES OF SELECTED
BAKERIES IN TAYABAS CITY
Fabie, Jersie Mae G.
Jardin, Reicel P.
College of Business Administration
Southern Luzon State University
2018-2019
ii
BIOGRAPHICAL SKETCH
Name: Jersie Mae G. Fabie
Birthday: December 22, 1998
Birthplace: Lucena City
Permanent Address: Brgy. Wakas, Tayabas City
Contact Number: 0912-631-8027
Educational Background:
School/University Inclusive Years Honors/Awards
Wakas Elementary School 2005 – 2011 Third Honorable Mention
Luis Palad National High School 2011 – 2015 -
Southern Luzon State University 2015 – Present
Academic Affiliations:
Junior Philippine Institute of Accountants – Member
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BIOGRAPHICAL SKETCH
Name: Reicel P. Jardin
Birthday: November 16, 1998
Birthplace: Tayabas City
Permanent Address: Brgy. Ilayang Ilasan, Tayabas City
Contact Number: 0948-645-4246
Educational Background:
School/University Inclusive Years Honors/Awards
Ilasan Elementary School 2005 – 2011 -
Luis Palad National High School 2011 – 2015 -
Southern Luzon State University 2015 – Present
Academic Affiliations:
Junior Philippine Institute of Accountants – Member
iv
Program/Project Planning and
Administrative Support
CERTIFICATE OF AUTHENCITY FROM ADVISER
This is to certify that the undersigned has thoroughly reviewed the accompanying
submissions in the form of soft and hard copy of the work entitled COST MANAGEMENT
PRACTICES OF SELECTED BAKERIES IN TAYABAS CITY by JERSIE MAE G FABIE
and REICEL P JARDIN and that as far as our knowledge, the hard and soft copies are one and
the same.
HERMINIA E. BABIA, CPA
Research Adviser
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APPROVAL SHEET
In partial fulfilment of the requirements for the DEGREE OF BACHELOR OF
SCIENCE IN ACCOUNTANCY, this research paper entitled, “COST MANAGEMENT
PRACTICES OF SELECTED BAKERIES IN TAYABAS CITY”, has been prepared and
submitted by JERSIE MAE G. FABIE and REICEL P. JARDIN, who are hereby recommended
for oral examination.
HERMINIA E. BABIA, CPA, MBA
Research Adviser
Approved in partial fulfilment of the requirements for the degree of Bachelor of Science
in Accountancy by the Oral Examination Committee.
RANIEL R. RAMILO, CPA MAY ANNE C. CALUBAYAN, CPA
Member Member
MARIBETH B. VILLON, CPA, MM
Chairperson
Approved in partial fulfilment of the requirements for the degree of Bachelor of Science
in Accountancy.
_________________ JOANNA PAULA A. ELLAGA, DBA
Date Dean
vi
DEDICATION
This research is dedicated to my beloved parents, Imee G. Fabie and Flomencio N. Fabie
for their undying love and support throughout my life; to my two younger brothers,
Paulo and Jayvee; to my second family, Tabi Family to all of my friends who
are always motivating me and who are always with me through thick and
thin especially to my best friend, Fatima, who are supporting me in all
aspects; to my choir mates; to my thesis partner, Reicel, who showed
unconditional understanding and patience; to Ma’am Babia,
our research adviser, for her valuable advice; to all
the people who contributed for the success of
this study; and most importantly, to our
God almighty, my creator, my
source of wisdom,
for the guidance
throughout my
life.
- JMGF
This piece of work I wholeheartedly dedicated to my parents Nanay Norcel and Tatay Reynaldo,
and to my Grandparents Nanay Susan and Tatay Efren who are always on my side,
gave me much inspiration and for supporting me; to my siblings Renalyn,
Ransell and Reiven that gave me a happiness and for trusting
me; to my partner and a friend of mine Jersie, who
share her knowledge and for understanding me;
and first of all is to our almighty
God for the reason of
happening all
this.
- RPJ
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ACKNOWLEDGMENT
The researchers would like to express their deepest thanks and gratitude to the following
persons who in one way or another contributed and extended their valuable assistance in the
preparation and completion of this research study, and for without them this challenging work
would not have been possible and accomplished:
Prof. Herminia E. Babia, their adviser, for her countless advice and endless guidance to this
study;
Prof. Maribeth B. Villon, chairperson, Mr. Raniel R. Ramilo and Mrs. May Anne
Calubayan, members of the Oral Defense Committee, for lending their time, comments and
suggestions through the oral defense that provided a great help to improve more this research;
To Mrs. Myra Iris Capila Reyes, Mr. Mario Reyes, Mrs. Joana Crizella Gizaldo, Mrs.
Jocelyn Sayson and Mr. Efren Sayson, respondents, and to their for the permission granted to
get all the necessary details and data needed and to their workers who assisted the researchers in
getting the informtion.
To BS Accountancy IV-B Family, for their prayers and support with a special mention to their
beloved friends, Clarice, Jessa, Cristine, Airene and Nica who have been so supportive along
the way of doing their thesis;
To researchers’ friends and bestfriends, for their encouragement, countless help and prayers
for the success of this study and for being with them at hard times and delight;
To researchers’ families specially to their parents for their endless prayers, guidance and
support;
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Above all, to our God Almighty for His endless blessings, strength, guidance, health and
wisdom.
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ABSTRACT
Title: Cost Management Practices of Selected Bakeries in Tayabas City
Researchers: Fabie, Jersie Mae G.
Jardin, Reicel P.
Adviser: Prof. Herminia Babia
The main objective of this study is to determine and assess the cost management practices of
selected bakeries in Tayabas City. Specifically, it aimed to accomplish the following: (1) To
determine the business profile of selected bakeries in terms of its historical background,
organizational structure, capital structure and technical structure. (2) To know the costing
management practices applied by selected bakeries in Tayabas City as applied to direct materials,
direct labor and factory overhead (3) To evaluate the financial profitability of selected bakeries
for the past three (3) years. (4) To know the common problems encountered by the business
regarding to its cost management practices. The researchers conducted a personal interview with
owners of the two (2) bakeries and workers guided by interview guide questionnaire. The
descriptive design has employed in the study. All necessary and available data was presented in a
narrative form, in figures, tables and illustrations. These design focused in describing the cost
management practices of Calle Maior Bakery & Pasalubong and Mendoza Bakery for the past
three (3) consecutive years. In manufacturing their products, the respondents identified: (1) direct
materials, (2) direct labor and (3) manufacturing overhead, as the three broad categories of
product costs. The common problems encountered by the two (2) bakeries on its costing
practices are: (1) Both bakeries have no formal cost sheet. (2) Faulty estimates of manufacturing
overhead (3) Defective bread products. Based on the findings and the results of the analysis, the
researchers therefore conclude the following : (1) Both bakeries are liquid and can meet their
current obligation (2) Based on the 2016 sales of Calle Maior Bakery & Pasalubong, the
establishment of bakeries nearby lowers the sales. Mendoza Bakery’s sales is near constant
because they are in public market (2) The owners of Calle Maior Bakery & Pasalubong and
Mendoza Bakery can be both considered successful because they managed their business to
grow. With the findings presented and the conclusions reached, the researchers humbly
recommend the following: (1) The owners should make a cost sheet for them to know if they are
gaining profit or not with the product they are producing. (2) The owners should know how will
they allocate the manufacturing overhead to the production. They can assign it based on the total
monthly production, or there is a uniform amount assigned in each product. (3) The owner
should lessen their defective product by way of making sure that all necessary raw materials are
of standard class, the equipments they are using in good condition and the man power are of
quality work. Defective products can’t be avoided but it can be lessen with some precautionaries.
Keywords: Cost Management, Bakery
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TABLE OF CONTENTS
Biographical Sketch……….……….……….……….……….……….……….…………………..ii
Approval Sheet……….…….……….…….……….…………….……….………………………iv
Dedication……….…….……….……….……….……….……….………………………………v
Acknowledgement………………….……….……….……….……….……….……….………...vi
Abstract………………………………………………………………………………………….viii
Chapter I – Introduction
Introduction………………………………………………………………………………………..1
Background of the Study………………………………………………………………………….2
Statement of the Problem………………………………………………………………………….3
Significance of the Study………………………………………………………………………….4
Scope and Limitation……………………………………………………………………………...4
Definition of Terms……………………………………………………………………………….5
Chapter II –Review of Literature
Related Literature………………………………………………………………………………….7
Conceptual Framework……………………….………………………………………………….43
Research Paradigm ………………………………………………………………………...…….44
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Chapter III – Methodology
Locale of the Study………………………………………………………………………...…….45
Research Design………………………………………………………………………...……….45
Unit of Analysis/Respondents………………………………………………………………...…45
Research Instrumentation………………………………………………………………………..46
Financial Ratios………………………………………………………………………...……….47
Chapter IV – Results and Discussion
Business Profile
A. Historical Background
I. Profile of the bakery……………………………………………………………...48
B. Organizational Structure…………………………………………………………..….….51
C. Capital Structure………………………………………………………………………....54
D. Technical Structure
I. Physical Structure…………………………………………………………..……62
II. Technical Process…………………………………………………………….......71
Cost Management Practices
Financial Performance
Problems Encountered
xii
Chapter V – Summary, Conclusions and Recommendations
Summary………………………………………………………………………...……………...104
Findings………………………………………………………………………...………………105
Conclusions……………………………………………………………………………...……...110
Recommendations………………………………………………………………………...…….111
Bibliography
Appendices
Financial Statements
Job Order Cost Sheet
Letter
Interview Guide Questionnaire
Pictures
xiii
LIST OF TABLES AND FIGURES
Tables
1. Capital Structure - Calle Maior Bakery & Pasalubong…………………………………..55
2. Capital Structure - Mendoza Bakery……………………………………………………..56
3. Total Monthly Production…………………………………..………………….………...77
4. Comparative Income Statement - Calle Maior Bakery & Pasalubong…………….…….96
5. Comparative Income Statement - Mendoza Bakery……………………………………..97
Illustration
1 Organizational Structure – Calle Maior Bakery & Pasalubong……………………….....51
2 Organizational Structure – Mendoza Bakery…………………………………………….51
3 Map of Tayabas City…………………………………..…………………………………58
4 Map of Poblacion of Tayabas City…………………………………..…………………..59
5 Vicinity Map - Calle Maior Bakery & Pasalubong……………………………………...60
6 Vicinity Map - Mendoza Bakery…………………………………..…………….……....61
7 Plant Layout (Office Area) - Calle Maior Bakery & Pasalubong………………………..63
8 Plant Layout (Office Area) - Mendoza Bakery…………………………………….…….64
9 Plant Layout (Working Area) – Calle Maior Bakery & Pasalubong…………...………..65
10 Plant Layout (Storage Area) - Calle Maior Bakery & Pasalubong……..………………..66
11 Plant Layout (Working Area) - Mendoza Bakery………………………………………..67
12 Bread Making Process…………………………………..………………………...……..70
13 Costing System – Calle Maior Bakery & Pasalubong
and Mendoza Bakery…………………………………..………………………………..74
