Question

How It's Made is a documentary television program that is aired on the Discover/Science Channel weekly. This is a fascinating program explores the manufacturing process of products such as marbles, toothpicks, ice cream, and pencil erasers, to name a few.

Using the Internet, search to the television show How It's Made, select an episode that interests you and that has not already been posted. Watch the episode and discuss why you select that product. Take notes while watching the episode and share in this discussion thread the 'process' by which the product selected is made. No detail is too small, describe the entire process from beginning to end and include what are considered direct materials, direct labor, and what was included as factory overhead (all indirect costs). let me stress -- I want the costs. I want you to clearly label what are direct/indirect costs. That is what I will be mainly grading you on.

Answer 1

                                                             HOW IT'S MADE - PEANUT BUTTER

Peanut Butter is a daily life product and is interesting to know the process for thing we like. The process of manufacturing peanut butter requires Peanuts ( 565 Gram of peanut for 500 gram of peanut butter), machines like hot air roaster, Grinder, stainless steel container, Glass Jar, Capping machine, salt, sugar, vegetable oil.

Process -

• After bringing the peanut to the factory struggle them through hot air roaster at 240 degree C.
• Cool the peanut using suction fan. Supervisor has a watch on the production process.
• Outer skin of peanuts are removed using machine that are used by farmers for animal feed.
• Peanut are put in Grinder to form paste.
• Other ingredient like salt, sugar and vegetable oil are mixed into the peanut paste.
• Peanut butter is almost prepared and ready to to be packed into glass jar. Packing and labeling is performed at the end of the process.

Direct Cost - Cost which are directly identifiable with the cost object are direct cost

Indirect Cost - Cost incurred which cannot be accurately attributed to specific cost objects are indirect costs.

Various Cost identified during the production process are labeled in below table as Direct or Indirect cost depending on their nature. ---

Particular	Item Included	Nature of Cost (Direct/Indirect)
Materials	Peanut, salt, sugar,Vegetable oil	Direct
Labour	Automated Plant therefore no wages/ Labour	Not Applicable
Factory Overhead	Depreciation, Salary of Supervisor, Rent Of premises	Indirect
	Power Consumption	Direct
Primary Packaging	Labels, Glass Jar	Direct
Secondary Packaging	Wooden boxes for transportation	Indirect
Administration Overhead	Front office expense, audit fees	Indirect
Selling Expenses	Agent's Commission	Indirect

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