Support Live Chat
Nov 8, 2017 in Informative
Direct materials used in production of food products, which are produced in the factory are wheat flour, rice flour, and food flavors. Noodles produced at Nongshim factory are mainly made of flour. Flour constitutes the biggest percentage of ingredients used in production of these noodles. Some noodles are made of a combination of wheat flour and rice flour. Therefore, rice and wheat flour are used as a direct materials. Besides, the factory produces rice: haepssal steamed rice, which is freshly steamed rice. Nongshim uses homegrown rice, specifically sourced from Korea. The rice is steamed using spring water and then it is packed in sterilized food containers. Given that rice is one of the main products of Nongshim factory, raw rice is therefore a direct material in the factory. All of the Nongshim products have different food flavors. Flavors used in the factory include beef, vegetables, and fruits flavors. Therefore, flavors form part of direct materials since they constitute the ingredients used in production of Nongshim products.
Indirect materials used in the factory include packaging items used to pack the processed food products. Usually, the factory uses sterilized plastic containers, to pack their food products. These containers are not part of what the factory produces, but are necessary for completion of the factory’s processes. They are therefore categorized as indirect materials. Apart from indirect labor and materials, the factory has other forms of overheads. These overheads include power used to run the processing machines in the factory, and water. All machines used in the factory utilize electricity. The production process of noodles and rice requires a lot of water. Therefore, both power and water form part of the factory’s overheads. Other overheads include the cost of repairing and maintaining the factory’s equipments and buildings. Variable overheads observed in the factory are utilities costs for power and water, while maintenance cost of the factory’s equipments (depreciation) forms part of fixed overhead resources.
The Production Activity
The production activity, which can be termed as value adding activity in the factory is the one, which involves conversion of raw rice into noodles. It is a value adding activity because raw rice is first converted into flour, and then the rice flour is converted into noodles. The process of converting raw rice into ready-to-eat rice (freshly steamed rice) can also be termed as a value adding activity. Nongshim factory controls the quality of its production process by constantly testing the quality of the products, to ensure they meet the factory’s standards. In addition, the factory conducts routine checks on the processing machines, to ensure they are free from any mishaps.
To design a product costing system for Nongshim factory, one may have to evaluate the biggest cost driver in the factory. Since direct materials and labor account for the biggest proportion of the factory’s cost, then a simple product costing system can be based on direct costs. A product costing system based on direct costs involves pricing a product based on the amount of direct costs used in its production. Nongshim factory utilizes the same facilities to produce its products. For instance, it uses the same processing plant to produce different types of noodles. The factory also utilizes the same machine to covert wheat and rice into flour.
Given that the factory uses the same facilities to produce a wide range of products, it may not require using more than one cost pool. Utilizing many cost pools may be unmanageable and time consuming. Cost drivers that the factory can use may include direct labor (wages paid to individuals involved in the production process), cost of raw materials (wheat, rice, and flavors), and depreciation of machineries and equipments. The factory can use activity based cost pool, whereby costs incurred in the production activities are combined together to form a basis of pricing the final products (cost pool). These may include a combination of costs previously identified as cost drivers.
- Preventing Prison Riots
- Moby Dick: Argument on Whaling
- Polyvinyl Chloride
- Islam and Judaism
- Innovation Ecology
Customer`s comment 19 days ago
Big thanks to your writing team for coming through for me with my last order. I didn’t give them a lot of notice, but they were able to come up with a superb paper for me. This is the kind of service that I love. Sometimes, I get forgetful, and I forget when my paper due dates are. It is so comforting to know that I can be in a rush and contact Essays-Writer.net and that you will deliver a great paper for me, no matter what. The fact that you include an anti-plagiarism report is great, too. I appreciate knowing that my work is totally original. Essays-Writer.net rocks!
Customer`s comment 27 days ago
Your writers are masters at time management. I turned in an order for four very difficult papers, and they were all written perfectly, even with the short deadline notice. Thanks, Essays-Writer.net!
Customer`s comment 12 days ago
Your writing company delivers for me every time. I have never been disappointed.
Customer`s comment 3 days ago
I was happy with the two essays that your writers did for me. Even though the subject matter was quite dense, they managed to come up with high quality work. This has been my experience with Essays-Writer.net, over the long haul. Each and every time I have needed a high quality paper, you have come through with outstanding writing examples for me. I am pleased to recommend your writing service to my friends and colleagues.
Customer`s comment 8 days ago
The work I received from your writers was much better than expected, especially considering the affordability of your services! This is so impressive! I wasn’t aware, previously, that companies like Essays-Writer.net even existed, but then again, I’m pretty sure you are the only one that is this good. I have heard a lot of bad things about other writing companies, but never a negative word about Essays-Writer.net. You are reputed as being the best, and I, for one, am convinced that this is true.Thank you for the outstanding job you did on my essay and research papers.
Customer`s comment 18 days ago
Thank you for the great paper! My professor gave me a high mark for it.
Customer`s comment 16 days ago
As always, your writers have completed another impressive paper. This time, the subject matter required a lot of research. They not only completed the research. They also documented it absolutely perfectly. It would have taken me months to write a paper this thorough and of this high quality. Thank you so much for your diligence. It was greatly appreciated.
Customer`s comment 8 days ago
I find your writing service to be staffed with serious professionals who understand the urgency of turning out great writing for your customers. I have ordered papers from you for a year and a half now, and each time, I have been given superb papers that were error free and interesting to read. I truly appreciate your efforts, and hope to continue to do business with you from this point forward. You deserve my loyalty, because you are certainly loyal to your customers! Wishing you all the best.
Customer`s comment 1 days ago
Once again, I have sat down at my computer, because I feel I owe you big thanks. There is just no way to express how grateful I am for everything you did to make my research paper as good as it was. My professor gave me an A+ on it, which is the first A+ I have received during my entire college career.
Customer`s comment 7 days ago
Now I know where to go when I need an excellent paper written on a short notice. I am very happy with the paper your writers just produced for me. It was absolutely perfect. Please thank the ones who handled my order and let them know that I will definitely do business with Essays-Writer.net again.
Customer`s comment 24 days ago
Dear Writers #0019, Thank you for taking such a good care of me. I apologize for being as picky as I was, but I was only reflecting the professor’s requirements. I couldn’t believe my eyes when I got my grades back. He gave me an A+ on the paper, which is almost unheard. The paper you produced for me included each and every thing that the professor had required. He is notorious for giving us next-to-impossible tasks to perform in his class, but you managed to pull it off. I don’t know if any other student has received an A+ in this guy’s class, but he simply could not find a single thing wrong with my paper! Yay! Thanks so much.
Customer`s comment 27 days ago
My professor told me that the essay you wrote for me was the best one in the whole class! Thanks for doing such a good job. Compliments from this professor are rare!
Customer`s comment 13 days ago
Dear Essays-Writer.net, You handled my rush order beautifully. I am still amazed by the quality of the term paper, because your writers didn’t have a whole lot of time to write it. Still, they did a great job and I’m happy that I chose Essays-Writer.net. Thank you for taking care of this in such an eloquent way.
Customer`s comment 27 days ago
Dear Madam or Sir, Thank you for your competence and high standards. My paper was wonderful! I shall recommend your writing services highly. You are far and above better than other writing services that I have used. Your professionalism, attention to detail, high quality writing and great prices are a few of the reasons why I will never use any other writing service. Thanks again.
Customer`s comment 11 days ago
I am getting ready to graduate in another week, but had to take a minute to jot this line because I want you to know what a help your writing service has been to me, especially during my junior and senior years. The work has been hard, and I have had to study virtually all the time. With you helping me out with my more challenging writing projects, I have been able to move forward and do well on my tests and other school projects. I will be forever grateful to you for your help, and I wish you continued success with your fantastic writing service. All the best!