Explain what type of cost behavior you believe would be appropriate
During week 4 you were asked to find a publicly traded manufacturing company. For our week six discussion board post I would like you to select the same company. Go to their website and read about their products and operations. Then in your post list five costs that the company would incur. Explain what type of cost behavior you believe would be appropriate for each of these cost items. Please be sure to include a link to the company’s website in your post.
150 Words.
—–Week 4 assignment Below ( Use same company)
Wrigley Company is a publicly-traded company that announces its stock performance under the NYSE. This company specializes in manufacturing chewing gum and uses the system of process costing. The company has 14 factories that are spread out globally in Africa, North America, India, Europe, Asia, and Pacific regions. Wrigley Corporation manufactures gums that serve over 150 countries. The production of gum involves six orderly stages. The first stage is melting and purification of gum base, which is ordinarily small and round balls. Secondly, flavors and sweeteners are typically added to the melted base then mixed. The third step involves rolling of large gum loaves to reduce their thickness to standard size. Fourthly, the gum is cut into taking the shape of pellets or sticks through the scoring process. The fifth step involves conditioning. The gum is typically cooled and hardened into the right consistency for packaging. The final stage requires packaging. The chewing gum is packed and assorted for shipping.
The gum company generates identical product units in batches through a consistent process. This method depends entirely on the system of process costing. The system of process costing distributes costs to every process through totaling production cost to determine an average over production units to arrive at unit cost (Fisher & Krumwiede, 2015). Through this system, Wrigley relies on a separate account to record process inventory for work-in-process. This technique simplifies tracking costs for every level of its production process. The system of process costing uses the same cost flows to the job costing system. The main difference between the two methods is that Wrigley uses process costing to assign product costs such as manufacturing overhead, direct materials, and direct labor to every process or production unit. These units have separate inventory accounts for recording the work in process.
Reference
Fisher, J. G., & Krumwiede, K. (2015). Product costing systems: finding the right approach. Journal of Corporate Accounting & Finance, 26(4), 13-21.
Answer preview to explain what type of cost behavior you believe would be appropriate
APA
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