Manufacture

Polytechnic University of Puerto Rico

MGM 5500 – Managerial Accounting

Final Exam

#48248

February 15, 2011

Crayola is a brand of artist supplies manufactured by Crayola LLC, which was founded in 1885 as Binney & Smith. It is best known for its crayons. The company is based in Easton, Pennsylvania. Originally an industrial pigment supply company, it soon shifted its focus to art products for home and school use, beginning with chalk, then crayons, followed later by colored pencils, markers, paints, modeling clay and other related goods. Being Crayola crayons its major product. Crayola crayons raw materials consist of paraffin wax and powdered pigment. Heated tanks store the wax. Pre-measured pigments are added to the wax and mixed, and then the paraffin wax and powdered pigment mixture are poured into the crayon molds, (direct material), filling the molds from the tip up. The wax mixture is cooled using a water cooling system. Each Crayola Crayon is inspected manually and by computers for imperfections, molded crayons that do not pass inspection are re-melted and remolded. Quality crayons are fed into a cylinder. Labels are then fed onto the rotating cylinder while a white roller presses the label against the glue and the label wraps around the crayon twice for strength, (direct labor). Crayola Crayons are packaged in different size boxes and packages; (manufacturing overhead).

Packing

Labeling

Quality Assurance

Flat Bed Molding

Wax & Pigment

Manufacturing Process

Manufacturing Overhead

Direct labor

Direct material

The Crayola Company is most likely to use a process costing because the company produces a large volume of similar products, and production is continuous to ensure that adequate inventories of the finished product(s) are on hand.

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