You are an accounting intern at Mooz4yoo, a company that produces a range of gourmet organic yogurts hat are sold to high-end grocery stores and restaurants. Production of the yogurts occurs in a single building, with offices for management and sales staff upstairs and the plant on the first floor. Production is made up of three processes: raw milk processing, where the milk, which is the major ingredient for the yogurts, is pasteurized; yogurt manufacture, where fruit and flavorings are added to the milk and the yogurt is made in bulk; and packaging, where the product is put into specially designed containers (with a foil insert).
Instructions
What costs would you expect to be included in the process cost for each of the three processing departments? Differentiate between variable costs, direct overhead costs, and indirect overhead costs.