ACCOUNTING PRINCIPLES II

CHAPTER 3 WRITING ASSIGNMENT

For more than 60 years, Dow Chemical Company has made a sold a tasteless, odorless, and calorie-free substance called Methocel. When heated, this liquid plastic (methyl cellulose) has the unusual characteristic (for plastics) of becoming a gel that resembles cooked egg whites. It is used in over 400 food products, including gravies, soups, and puddings. It was also used as wampa drool in The Empire Strikes Back and dinosaur sneeze in Jurassic Park. Explain what kind of costing system is most appropriate for the manufacture of Methocel. Include in your explanation why this system is most appropriate. Describe the system, and include in the description a general explanation of how costs are determined.