What types of costs are incurred when manufacturing marshmallow cookies?

This posting is about an activity you can use to discuss the various types of manufacturing costs.  The cost object is a box of marshmallow cookies.  The first step is to show (or ask students to watch) this 4:38 minute “How It’s Made” video about marshmallow cookies.


Questions

1) What are the direct materials of the cookies?

2) What workers would be classified as direct labor?

3) What workers would be classified as manufacturing overhead?

4) What other costs, not necessarily shown in the video, are likely to be classified as manufacturing overhead related to the marshmallow cookie facility?

5) What are likely to be some period costs associated with the marshmallow cookie line?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. †Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions. †The YouTube video link below is a narration of the blog post article (no discussion questions are included in the YouTube video; those can be assigned separately.)

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

About Dr. Wendy Tietz, CPA, CMA, CGMA

Dr. Wendy Tietz is a professor of accounting at Kent State University in Kent, Ohio, USA. She is also a textbook author with Pearson Prentice-Hall.

2 Responses to “What types of costs are incurred when manufacturing marshmallow cookies?”

  1. Teresa Stephenson Reply August 17, 2015 at 4:51 pm

    The YouTube video link to this assignment has been deleted.

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