Go the Hershey website to learn how to make Hershey chocolate. (There is also a

Question

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

Explanation / Answer

So the costing system basically describes the total cost it would take to produce a unit a of merchandise for any given company. In order for Hershey's to have such an efficent system they must track how much of their product is actually getting used up. Are they being efficient or possibly wasting and throwing away perfectly good resources that could have made more chocalte and saved them money?

A few of the product cost that could be tracable are the amount of cacao beans they have purchased from the exotic equatorial regions as wellas the milk that they use to make the chocalte straight from the dairy farms. More traceable costs include machinery, it's energy usage, as well as its cost over time to be fixed. Lots of costs are already allocated. For example Hersheys themselves does not produce the milk but rather buys it from other companies so in a way they are saving money since another company with better equipment and more suitable for the job is helping them out. The overhead costs should be accounted by an organized system of workers. Workers should do routine checks on inventory and power usage to make sure they are getting what they are paying for and then make not of it, giving them a much more accurate apporximation of the companies overhead costs by having people monitoring the factory and other work areas.

Hope this helped, good luck with your work!

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