John Sather, a local grocer in Round Lake, Minnesota established Sather Company in 1936. He sold cookies throughout southwestern Minnesota. Sather re-bagged candy that he purchased in bulk from various sources. One of his sources was Farley Candy Company. The expansion of the company continued in 1972. Sather Company went nationwide and secured product distribution to half of the nation Kmart business. The corporation expanded and purchased Kitchen Fresh Company, Bayou Candy Division of the American Candy Company, Powell’s Candy Company, and Northstar Candy Company. In 1991, Sathers had three manufacturing facilities as well as two distribution centers. Farley and Sathers merged together in 1996 and purchased confectionary business units from Kraft Foods. Farley’s and Sathers Candy Inc., became an independent company as of January 2002. The company is engages in producing and distributing a wide range of candy and confectionary products. It’s most popular products consist of panned chocolates, toffee, and caramel nuts. In May of 2002, the corporation acquired several brands from Hershey such as Jujyfruits, Jujubes, Gummi Bears, Now and Laters, Chuckles, Hot Dog, RainBlo, Super Bubble, Wunderbeans and the list continues. Farley’s and Sather has made improvements to their product quality throughout the years by differentiating different colors in each product which represent the final output for each division. Their strategy of utilizing packaging and distribution of a high caliber has assisted in maintaining their position as a strong competitor in the candy manufacturing industry.
Examine the effect of changes in the variable cost / fixed cost structure of the company on cost- volume analysis decisions by managers
We have selected a company that is engaged in candy and confectionary products. Generally cost volume analysis is meant for understanding the how the cost and volume do help to generate good amount of profit for the business. As it is a company that deals with products at a large volume, we may say that, more the volume of products, it may reduce the cost of the product to a particular level and when the sales price of product are more than that, then the product fetches profitability to the company ("Definition of 'cost-volume," 2014). As the company prep