Decide what processes your given industry would likely include if they chose process costing.

Chose Adidas to write like example ..  then reply to coca cola and lulu


Everyone select a different industry.  Decide what processes your given industry would likely include if they chose process costing.

For instance, in semiconductors the major processes are

1. wafer

2. die

3. assembly

4. test

Within the die to assembly the decision point about whether to subject the die to additional processing is made.  Some die are put through bump, lead processing, flipping, etc. as additional processes with specific costs.  All die end up going to assembly and all then go to test, but the testing determines the end product and its’ usefulness.

In terms of equivalent units and cost stages you cost chips after fab, as wafer (mainly material)after die processing, as individual die (mainly material and labor)

All material is added at the beginning and there isn’t much material.

A lot of material is held at die until you start it into assembly processing.  Within assembly items remain at the die cost stage until assembly is completed, so they get around having  EQU on the cost stage.   Units are processed in ‘lots’ with the same device id and processing and assembly package.  After the assembly stage is completed the entire lot is ‘assembled’ and is costed based on that. Assembly includes most of the overhead application.



The Coca Cola company has three stages of production mixing, bottling and then inspected, labeled and packed.  All three together is considered Work in Process.  Once complete, the product becomes finished goods inventory.  It coverts to COGS upon delivery at retail stores.  This explains their process costing.

The Production Process at Coca-Cola

The Coca-Cola Company is one of the world’s largest producers of nonalcoholic beverages. According to the company, more than 11,000 of its soft drinks are consumed every second of every day.

In the first stage of production, Coca-Cola mixes direct materials—water, refined sugar, and secret ingredients—to make the liquid for its beverages. The second stage includes filling cleaned and sanitized bottles before placing a cap on each bottle. In the third stage, filled bottles are inspected, labeled, and packaged.

Work in process begins with the first stage of production (mixing and blending), continues with the second stage (bottling), and ends with the third stage (inspecting, labeling, and packaging). When products have gone through all three stages of production, they are shipped to a warehouse, and the costs are entered into finished goods inventory. Once products are delivered to retail stores, product costs are transferred from finished goods inventory to cost of goods sold.

The Luon Lifecycle

There are 6 different parts. They are design, material, manufactoring, distribution, store support, store.

Design: Lululemon design process begins with strategic intent where their teams align on goals, innovation, colours and raw materials. Then their creative designers get down to business and come up with the blueprints for their products. They make sure they last 5 years of wear.

Material: Their products begin to take shape. Material development begins with resource extraction or agriculture, then to their fabric mills for yarn spinning, dyeing, knitting and finishing.

Manufactoring:From the mills of their raw materials go on to the next stop in the lifecycle, the cut and sew factories, for assembling and finishing. Lululemon only work with partners who share our values of honesty, integrity, transparency and respect.

Distrubtion: Lululemon transportation team is doing some of the most innovative work in the company when it comes to goal setting and project management for sustainability. Their Shipped with Love philosophy, which guides the way ship product at lululemon, sets their intention to understand the impact lululemon have on the business and the environment.

Store support: Rather than a traditional head office, Lululemon has a Store Support Centre. They did this so they could support their stores.

Store:There are over 230 lululemon stores and every one of them is different. Each store reflects the local community it’s a part of, which makes for a familiar yet uniquely awesome kitchen party experience. And each store takes its own approach to sustainability.

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