This chapter’s opener featured Nick Nicolay and his company Kar’s Nuts.
Required
1. Kar’s Nuts uses three processes: roasting, blending, and packaging. What are some benefits of using separate process cost summary reports for each process?
2. Nick tries to order raw materials just-in-time for their use in production. How does holding raw materials inventories increase costs? If the items are not used in production, how can they impact profits? Explain.
3. Suppose Kar’s Nuts decides to allow customers to make their own unique trail mix flavors. Why might the company then use a hybrid costing system?