The Cost Component of Kellogg's Cereal Kellogg’s is the world leading producer of cereals and convenience foods. They offer a variety of cereals to kids for good taste and to moms for easy to make. Being a leading producer, Kellogg’s should consider the cost of its cereals and current issues dealing with it. In today’s era there are many factors affecting costs of products which became the source of rise in prices and quality reduction. Not only implicit costs but also explicit costs affect the product of a company. Kellogg said that high commodity costs led to a one per cent decrease in operating profit during the third quarter, despite a six per cent increase in sales. Like many food companies, Kellogg is struggling to maintain margins as the cost of commodities, particularly sugar and wheat, continue to rise. (Charlotte Eyre, 2007) The marginal cost of production is the increase in total cost as a result of producing one extra unit. This cost cannot be affected by fixed cost of any commodity, due to which profit maximizing quantity and price does not change. Revenue is the money the company receives for selling their product or service. It is calculated by taking the selling price and multiplying it by the number of units sold.
The study is aimed to provide more insights which determines and gives rise to some of the organizational problem and also to evaluate the required solutions for assisting the organization in the formation of a new strategy or a course of action. The report will highlight the problems that Kellogg’s has faced recently. Apart from this the report will also try to put some of the ways by which the problems can be sorted out.
The modern trends in cost estimating are discussed and various software programs with their brief functional capabilities and advantages are also mentioned. The various types of cost estimates have been classified on the basis of detail provided in them and their function.
The financial report from 2006 to 2010 includes five years, which need to be examined in order to know the stock movements in Kellogg. The company Kellogg is a leading producer and distributor of cereals, which was founded in the year 1906. The company’s name is listed on the New York Stock Exchange and the Dow Jones Stock Exchange.
Business always requires to make proper appraisal of its people and this can be achieved only if it depends on accurate and effective costing method. Strict compliance to a specific costing method has always been considered to be vital to measuring and assessing the costs incurred especially in today’s contexts in which more advanced manufacturing techniques are used.
It will be open for 5 weeks and will be from 18 a.m. to 7 p.m. A lecture will follow to inform students on the background of South African literature. Objectives This art show is important for students need to learn about South African literature and culture.
In terms of goods and services industrialization is an implementation of highly productive and standardized method to facilitate increase in efficiency and reduction in cost. Industrialization is a very important step for technological advancement,
There are various other competitors that have also existed, but they are not equivalent to what they have actually already lost to their competitors. In each and nearly every country there are local brands that are operating in the
The company also holds the highest market share in the Australian market despite of strong competition posed by Nestle and Aldi. Kellogg’s has introduced a series of cereal products targeted at different consumer demographics. The promotional activities have been
The traditional costing method relies on the volume of a cost driver including direct materials, machine hours and labour time consumed in producing an item when assigning manufacturing overhead. On the other hand, activity-based costing apportions the costs
2 pages (500 words)Research Paper
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Cost components of Kellogg’s cereals Abstract This article discusses the cost components and impact of new technology on Kellogg’s cereals. Many factors are affecting cost of commodity and have impact on revenue generated by Kellogg’s. With an increase in sales, the product lost its operational profit due to certain reasons…