Bacon- https://www.youtube.com/watch?v=_tvx_CKB7uI

The product I chose to write about is bacon. Bacon is processed and precooked in the factory. It begins with a load of pork bellies added to a tumbler machine. Then, it goes on a conveyor belt, which takes the pork bellies to an automated blade, slicing the skin from the meat. Once sliced, it is dropped onto another conveyor belt to be processed into pork rinds. Any remaining pieces of skin are removed manually. The meat is then submerged in a brine solution, for the meat to absorb extra liquid and salt. Flavorings are added and curing solution injected into each pork belly. In order to add flavor and color the pork bellies are hung on a rack and shower with liquid smoke. Pork bellies are cooked into an oven at low temperatures then transferred into a freezer and a cooler. They are trimmed and reassure there are no metal pieces lodged in the meat. Pork bellies are stacked and wrapped until ready to be sliced into bacon sized pieces. An inspector discards broken slices and then it is stacked for packaging.

The major material used in the process of making bacon is the curing solution to preserve the meat. The use of large quantities of salt and water for flavor and anti-microbial purposes as well as nitrate and sodium ascorbate are part of the solution, which costs is $6-$8 a pound. One decision manager might make is the use of right portions and completely dissolve ingredients in proper order to avoid wasting.

Direct labor is observed during most of the video, those employees directly involved in the process, such as the people operating machinery and people cutting bellies and packaging bacon. Indirect labor refers to employees or workers who do not directly produce goods or services, but who make their production possible or more efficient.

If a cost is not direct labor or direct material, the cost is overhead. Three examples of manufacturing overhead in this video could be the salaries for the factory workers, depreciation on equipment and rent on factory building.

The belly market continued its reduction from the record-high prices reached at the end of July, although this downward trend does appear to be showing indirect signs of slowing down. I think the cost range to make is $3-$6 per kilogram. However, it is possible to expect volatility in either direction. I would advice placing them into cold storage when there is excess supply and lower demand. Also, be ready to accommodate customer orders as demand increases, knowing the prices of how much they are going to sell the product for.

Two costs that the company incurs that are not related to making the products are salaries of supervisors and transportation of the meats to the factory. These are treated differently than the manufacturing costs because they are not directly involved in the active conversion of materials into finished products.

1) Identify two variable costs involved in making bacon and explain what makes them variable costs.

2) Identify two fixed costs involved in making bacon and explain what makes them fixed costs.

3) Identify one mixed cost involved in making bacon and explain why you consider it to be a mixed cost.

4) Thinking about the mixed cost you identified, and the mixed cost function, where y = a + xb, explain how each component (y, a, x, b) relates to your mixed cost.

Again, thinking about your mixed cost, and the idea of a relevant range, identify some constraints within the production of your project that would help determine the # of units of production that represent both the minimum and maximum boundaries of your mixed cost's relevant range.