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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Some of Tasteless’ new tea-based products, introduced during the past year, include tea-ﬂavored frappuccinos and premium tea-ﬂavored ice cream sold in the freezer section of supermarkets and in restaurants. Tasteless’ biggest challenge is its tea’s short shelf life and the negative impact fresh air has on fresh tea leaves. With a shelf life measured in weeks, tea must be moved quickly from production to consumer. This is especially critical for those tea products that are not packaged in vacuumsealed storage containers; for example, some of the higher margin products include very small portions of high-quality, highly selective tea leaves. From a customer’s perspective, the tea may lose some of its aromatic qualities and potency, depending on how long it sits in manufacturing plants or on supermarket shelves; and experienced tea drinkers easily can tell the difference between fresh and stale tea. Tasteless goes to great lengths to ensure the freshness and integrity of its tea products; stale tea is removed immediately and donated to charities.
Organization and Sales Structure Corporate headquarters has a central mainframe computer that maintains the general ledger as well as most of the major business databases. All production takes place in local manufacturing processing plants located in Massachusetts, New Jersey, Tennessee, Illinois, Colorado, Washington, and California. Each processing