Question

Pressed Organics is a cold pressed juice manufacturer who creates organic juices. As the budget accountant in the new processing department, you are given the task of identifying direct and indirect costs of each new cold pressing machine. Your supervisor has asked that you classify the majority of the juicer and department costs as indirect. Classifying the majority of costs will allow you to use the direct labor based overhead allocation method. Also using this method will charge a lower amount of overhead as long as the costs are smaller direct labor costs. You have realized that classifying the majority of the costs will cause a penalty for other departments that typically have larger allocations. These same departments will have lower performance ratings as a result of the change in classification.

Questions:

1. Considering your understanding of job order costing and process costing, analyze how a hybrid costing system can yield different results when costs are classified as direct versus indirect?

2. How would you handle this situation to be sure that classifying the majority of the costs does not cause penalties for other departments?

Answer 1

Answer

Here are the four essential plans of action for a cold processed juice business:

Delivery Only

Juice Bar/Retail

wholesale

combination

In this article, I will give an elevated level review of every business type and it's upsides and downsides as I see them.

Delivery Only

This has the least startup cost, and is an OK spot to begin. The absolute best brands today have begun thusly. This plan of action permits you to begin little. I have met a few proprietors of effective cold-squeezed juice business that began by either making juice in a leased grocery store kitchen (you can generally lease constantly), or sometimes in any event, making juice at home and conveying your requests from that point. I don't prompt beginning at home, as you are most likely violating local health code laws. By the by, it has been finished.

You can permit client to put orders for juices and cleanses online to be conveyed the following day, or on the off chance that you have your production and stock leveled out, you can convey right away. You can fabricate an eCommerce web site economically nowadays that can take request for juices and cleanses. In the event that building a web based business site on a budget, I suggest beginning with wix. The cycle truly isn't muddled to get a web based business webpage fully operational. You can likewise attempt to offer your products on nearby conveyance applications like uber eats.

Other than requiring juice equipment, individuals, and an online business site, you should do some marketing. Facebook has incredibly focused on marketing nowadays, and it's moderately modest. You can, for instance, promote to individuals in your general vicinity who have "enjoyed" photographs and records identified with wellbeing food, sustenance, and wellness. In the event that your instagram and facebook game is on fleek you ought to have the option to take care of a decent amount of orders, as long as the competition isn't excessively high in your general vicinity.