What product costs and period costs go into making Dunkin’ donuts?

Photo of the Dunkin' Donuts restaurant exterior

The first Dunkin’ restaurant opened in 1948 in Quincy, Massachusetts, and is still in operation today. The recipe for Dunkin’ donuts has been a secret for 65 years.  To see how Dunkin’ donuts are made, see the video at https://www.youtube.com/watch?v=EwTRmfWUxlw (0:43 min.).

The Dunkin’ donuts at a restaurant are not usually made at that location. For example, several Dunkin’ store owners in northeastern Ohio formed an affiliate kitchen manufacturing facility (Cleveland CPL) where the donuts are made fresh daily for each of the member franchises. Other brands’ products are also manufactured at this facility.

View a quick tutorial video about product and period costs at this link and then answer the following questions.

Note to instructors: This post is assignable in Pearson’s MyLab and has questions that are auto-graded.

Questions

  1. What is a product cost? What is a period cost?
  2. Why is it important to sort costs into product costs and period costs?
  3. What are some product costs related to Dunkin’ donuts?
  4. What are some period costs related to the manufacture and sale of Dunkin’ donuts? (Use your imagination.)

Copyright 2022 Wendy M. Tietz, LLC

About Dr. Wendy Tietz, CPA, CMA, CSCA, 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 Education.

No comments yet... Be the first to leave a reply!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: