ACTG F066 COST ACCOUNTING TERM PAPER
Name: Apoorva Arya
SID: 20323178
Cost Accounting Policies: Whole Foods
Index:
A. Introduction : Understanding the Entity
B. Cost System
C. Budgets & Approvals
D. Manufacturing Costs
E. WIP (Work in Progress)
F. COGS (Cost of Goods Sold)
G. Financial Statements (Income Statement)
H. Conclusion & Summary
Disclaimer: Many policy ideas and execution plans are taken from Edward J. VanDerbeck and
Maria R Mitchell’s book “Principles of Cost Accounting”, 17th edition.
A. Introduction: Understanding the Entity
Whole Foods Market is an American chain of supermarkets that specializes in the sale of
organic products and products without additives, colors, flavors, sweeteners, fats, etc.
The accounting policies, specifically the cost accounting policies, followed by the firm
are used towards making business decisions about the firm and any decisions related to
the financial statements. All managers and executives are responsible for policy
compliance and adherence to the accounting codes and principles.
B. Cost System
Whole Foods uses an activity based costing system, since there isn’t too much
manufacturing and production involved, and more of sale. The cost is distributed by
organizing activities into different cost pools such as; packaging, processing, inventory
loading, unloading, transportation, etc. Some pointers:
i. Indirect overhead costs are to be traced to their original activities as best as possible.
ii. Different cost pools have different drivers. However, two of the main cost drivers in
every cost activity pool will be machine hours and direct labor hours.
