Topics: Costs, Cost, Variable cost Pages: 2 (583 words) Published: November 1, 2014
Week 3, Journal
Go the Hershey website to learn how to make Hershey chocolate. (There is also a "print friendly" version of the chocolate making process at the end of the video.) Review the process and take a look at some of the videos. Pay particular attention to the process steps of milling and pressing, mixing the ingredients, and refining. In at least one paragraph, describe the costing system that you would recommend Hershey use to account for its cost of goods sold and why. Include a few product costs you think would be traceable, which costs should be allocated and how Hershey should account and apply the manufacturing overhead costs. After reviewing the production videos on the Hershey’s website, it seems likely the company would use process costing versus job costing techniques to track the costs associated with producing the various chocolate bars. Both techniques will identify the costs associated with producing the candy bars, the difference is the process costing technique allocates the total cost of production across all units of output. This usually entails accumulation of costs for each stage (or department) of production and assigning those costs to all output from that stage. I feel that the process technique best matches the production process Hershey utilizes. Even on their website videos, Hershey breaks the production of the candy bars into seven separate functions, each with the end goal of developing the finest chocolate bars possible but with unique and separate processes. Just as Hershey has multiple processes, they will also have multiple product costs. A few traceable product costs that come to mind are associated with the seven website videos. The first film shows the production of the raw cocoa beans. The company will determine the costs associated with the purchase of raw materials such as the beans, sugar, and milk. This cost would be variable costs, as the production is increased, the volume of raw materials would also...
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