Better Bagels, Inc. manufactures a variety of bagels, which are frozen and sold in grocery stores. The production process consists of the following steps. 1. Ingredients, such as flour and raisins, are received and inspected. Then they are stored until needed. 2. Ingredients are carried on hand carts to the mixing room. 3. Dough is mixed in 40-pound batches in four heavy-duty mixers. 4. Dough is stored on large boards in the mixing room until a bagel machine is free. 5. A board of dough is carried into the bagel room. The board is tipped, and the dough slides into the hopper of a bagel machine. This machine pulls off a small piece of dough, rolls it into a cylin-drical shape, and then squeezes it into a doughnut shape. The bagel machines can be adjusted in a setup procedure to accommodate different sizes and styles of bagels. Workers remove the uncooked bagels and place them on a tray, where they are kept until a boiling vat is free. 6. Next the trays of uncooked bagels are carried into an adjoining room, which houses three 50-gallon vats of boiling water. The bagels are boiled for approximately one minute. 7. Bagels are removed from the vats with a long-handled strainer and placed on a wooden board. The boards full of bagels are carried to the oven room, where they are kept until an oven rack is free. The two ovens contain eight racks which rotate but remain upright, much like the seats on a Ferris wheel. A rack full of bagels is finished baking after one complete revolution in the oven. When a rack full of bagels is removed from the oven, a fresh rack replaces it. The oven door is opened and closed as each rack completes a revolution in the oven. 8. After the bagels are removed from the oven, they are placed in baskets for cooling. 9. While the bagels are cooling, they are inspected. Misshapen bagels are removed and set aside. (Most are eaten by the staff.) 10. After the bagels are cool, the wire baskets are carried to the packaging department. Here the bagels are dumped into the hopper on a bagging machine. This machine packages a half-dozen bagels in each bag and seals the bag with a twist tie. 11. Then the packaged bagels are placed in cardboard boxes, each holding 24 bags. The boxes are placed on a forklift and are driven to the freezer, where the bagels are frozen and stored for shipment. Required: 1. Identify the steps in the bagel-production process that fall into each of the following categories: process time, inspection time, move time, waiting time, storage time. 2. List the steps in the production process that could be candidates for non-value-added activities.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Better Bagels, Inc. manufactures a variety of bagels, which are frozen and sold in grocery stores. The production process consists of the following steps.
1. Ingredients, such as flour and raisins, are received and inspected. Then they are stored until needed.
2. Ingredients are carried on hand carts to the mixing room.
3. Dough is mixed in 40-pound batches in four heavy-duty mixers.
4. Dough is stored on large boards in the mixing room until a bagel machine is free.
5. A board of dough is carried into the bagel room. The board is tipped, and the dough slides into the hopper of a bagel machine. This machine pulls off a small piece of dough, rolls it into a cylin-drical shape, and then squeezes it into a doughnut shape. The bagel machines can be adjusted in a setup procedure to accommodate different sizes and styles of bagels. Workers remove the uncooked bagels and place them on a tray, where they are kept until a boiling vat is free.
6. Next the trays of uncooked bagels are carried into an adjoining room, which houses three 50-gallon vats of boiling water. The bagels are boiled for approximately one minute.
7. Bagels are removed from the vats with a long-handled strainer and placed on a wooden board. The boards full of bagels are carried to the oven room, where they are kept until an oven rack is free. The two ovens contain eight racks which rotate but remain upright, much like the seats on a Ferris wheel. A rack full of bagels is finished baking after one complete revolution in the oven. When a rack full of bagels is removed from the oven, a fresh rack replaces it. The oven door is opened and closed as each rack completes a revolution in the oven.
8. After the bagels are removed from the oven, they are placed in baskets for cooling.
9. While the bagels are cooling, they are inspected. Misshapen bagels are removed and set aside. (Most are eaten by the staff.)
10. After the bagels are cool, the wire baskets are carried to the packaging department. Here the bagels are dumped into the hopper on a bagging machine. This machine packages a half-dozen bagels in each bag and seals the bag with a twist tie.
11. Then the packaged bagels are placed in cardboard boxes, each holding 24 bags. The boxes are placed on a forklift and are driven to the freezer, where the bagels are frozen and stored for shipment.
Required:
1. Identify the steps in the bagel-production process that fall into each of the following categories: process time, inspection time, move time, waiting time, storage time.
2. List the steps in the production process that could be candidates for non-value-added activities.
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