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Blocher−Stout−Cokins−Chen: Cost Management: A Strategic Emphasis, Fourth Edition PART III PROCESS COSTING AND COST ALLOCATION C H A P T E R 404 III. Process Costing and Cost Allocation 11. Process Costing © The McGraw−Hill Companies, 2008 E L E V E N Process Costing After studying this chapter, you should be able to . . . 1. Identify the types of firms or operations for which a process costing system is most suitable 2. Explain and calculate equivalent units 3. Describe the five steps in process costing 4. Demonstrate the weighted-average method of process costing 5. Demonstrate the FIFO method of process costing 6. Analyze process costing with multiple departments 7. Prepare journal entries to record the flow of costs in a process costing system 8. Explain how process costing systems are implemented and enhanced in practice 9. (Appendix) Account for spoilage in process costing The Coca-Cola Company (www.coke.com) is the world’s leading manufacturer, marketer, and distributor of soft drink concentrates, syrups, and soft drinks. Coca-Cola’s strategy focuses on both price and differentiation. Coca-Cola’s differentiation strategy is apparent in its positioning: It positions itself as a unique and special product with a young, fresh image equal to none in the soft drink segment; it is a permanent reminder of classic values, of American culture inside and outside the country, and of all things American: entertainment, sports, and youth. Furthermore, its brand is recognized in practically every country in the world. Its exclusive formula makes it unique. Coca-Cola uses process costing to track product and customer costs such as direct materials, direct labor, and factory overhead costs incurred in three major processes: (1) concentrate and syrup manufacturing, (2) blending, and (3) packaging. During the first process, mixing
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