Tasteless Tea Company

8250 Words May 17th, 2013 33 Pages
ISSUES IN ACCOUNTING EDUCATION Vol. 26, No. 1 2011 pp. 163–179

American Accounting Association DOI: 10.2308/iace.2011.26.1.163

Tasteless Tea Company: A Comprehensive Revenue Transaction Cycle Case Study
Ronald F. Premuroso, William S. Hopwood, and Somnath Bhattacharya
ABSTRACT: It is challenging for students taking the introductory accounting information systems AIS course to envision how to apply the topics and concepts learned during the course in real-world situations. The motivation for this case study is to have groups of students apply the many topics and concepts learned in the first AIS course to a hypothetical real-world company situation, with particular emphasis on developing a proposed new and improved system for the
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For supermarket and restaurant chains, the sale typically is made to the purchasing department/buying division of the retailer. These sales often involve a significant amount of field testing by the direct sales force, giving Tasteless a competitive advantage. Tasteless heavily advertises its products in trade magazines and attracts individual sales through advertising in media such as health care magazines. Individual clients include CEOs of Fortune 1000 companies, as well as individuals from coast-tocoast. Management’s objective is to establish Tasteless as the most recognized and respected tea brand in the U.S. market, eventually supplanting Lipton Tea as the market leader in tea brand recognition and tea sales in both the higher-end and lower-end tea markets. While Tasteless currently is experiencing some sharp growing pains, the good news is the growing interest in different types of non-traditional beverages, combined with increasingly health-conscious baby boomers and younger adults. These factors have tripled sales over the past five years ending December 31, 2008. At the same time, new local and regional competitors with a bevy of new products are offering fast delivery from local production centers and in some cases lower prices, challenging Tasteless for retail shelf space. Without this shelf space, especially in supermarkets, Tasteless’ tea products cannot be retailed on a volume basis. Tasteless has

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