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.
—–Week 4 assignment Below ( Use same company)
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.
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.
Fisher, J. G., & Krumwiede, K. (2015). Product costing systems: finding the right approach. Journal of Corporate Accounting & Finance, 26(4), 13-21.