Would job costing or process costing be used by the manufacturer of the dye used to turn the Chicago River green for St. Patrick’s Day? Original blog posting (March 15, 2017)

Chicago River – St. Patrick’s Day Members of the Plumbers Local have dyed the Chicago River green in honor of St. Patrick’s Day since 1962 1966 a switch was made to use an eco-friendly vegetable dye Dye is likely similar to the Bright Dyes Water Tracer Dye produced by Kingscote Chemicals of Ohio Copyright: <a href='https://www.123rf.com/profile_porbital'>porbital / 123RF Stock Photo</a>

Chicago River – St. Patrick’s Day Likely steps to produce dye: Mix together several chemicals in powder form Add a liquid chemical to the mix Heat and stir the mixture Cool the mixture Dry and grind the cooled mixture into a power form Dye is made in large batches Sold in 1, 10, & 25 pound containers Copyright: <a href='https://www.123rf.com/profile_porbital'>porbital / 123RF Stock Photo</a>

Question 1 Would Kingscote Chemicals be likely to use job costing or process costing when it accounts for the manufacture of its powder Bright Dyes products? Explain.

Question 2 List several conversion costs that might be incurred in the production of the Bright Dyes powder.

Question 3 Describe the accounting for conversion costs at a manufacturer such as Kingscote Chemicals.

Question 4 If Kingscote Chemicals routinely has little to no inventory at the end of each period, what effect would that lack of inventory have on its costing system?

Question Recap Would Kingscote Chemicals be likely to use job costing or process costing when it accounts for the manufacture of its powder Bright Dyes products? Explain. List several conversion costs that might be incurred in the production of the Bright Dyes powder. Describe the accounting for conversion costs at a manufacturer such as Kingscote Chemicals. If Kingscote Chemicals routinely has little to no inventory at the end of each period, what effect would that lack of inventory have on its costing system?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu