Chemicals-R-Us operates a large plant in the Midwest. It manufactures several common acids that are in high demand. In fact, several of its acid departments operate 24 hours per day, 7 days a week. Equipment in most of Chemicals’ departments is specialized. For example, mixing vats and piping are lined for sulfuric acid production. This is not necessary for several other chemicals produced by the company. Chemicals-R-Us keeps a huge storage warehouse near the factory to hold finished chemicals because demand fluctuates greatly and in some months exceeds the company’s production capability.

Required: What kind of cost accounting system would you recommend that ChemicalsR-Us use? What characteristics of the company caused you to make your recommendation? What features of the system that you recommended would be useful to the company? TLK=2