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Asia/Pacific Ed. 2017
North American Ed. 2017
North American Ed. 2018
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The Book
Q&A's On Ice Cream
Accelerated Shelf-life
Testing
Antifreeze Proteins
Buttermilk: Use of
Calcium Nutrient
Content Claims
Chocolate Ice Cream:
Formulating
Color in Ice Cream
Cost Management
Cost Management
Drawing Temperatures
Filtered Milks
Gelato
Gelato
Glycemic Index
"Good For You"
I/C: Formulation
Hybrid Products
Ice Cream as
Functional Food
Ice Cream:
Gumminess
Ice Cream Inclusions
Ice Cream: Shelf Life
Ice Cream Sweetness
Ingredients Cost
Savings
Lactose Reduction
Line Cost Averaging
Low Carb
Ice Cream
Low Carb
I/C: Formulation
Low Temperature
Processes
Meltdown Behavior
Mix Aging
Mix Composition:
Effect on Flavor
Mix Processing
Variables
No Sugar-Added
Ice Cream
Novelties:
Adding Inclusions
Novelties:
Preventing Soggy
Cones & Wafers
Nutmeats
Pasteurization,
Homogenization
Premium Light
Ice Cream
Prevention of Coarse
Texture
Prevention of Fat
Accumulation
Sensory Evaluation-
QA/Product
Development
Sucrose Replacement
Sweeteners: Blending
Sweeteners:
Considerations
Vanilla Crisis I
Vanilla Crisis II
Visual Defects:
Pink Discolouration
Visual Defects:
White Particles
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Questions & Answers
from "On Ice Cream" featured in Dairy Foods magazine
and sourced from "On Ice Cream" technical short courses.


Line Cost Averaging:

Question: What is meant by "line cost averaging"?

Answer: "Line cost averaging" is the method by which cost can be estimated for a product line (e.g., full fat ice cream) with multiple items (i.e., flavors), costs, and production volumes. Since the selling price of each item of a line is normally the same and costs of each differ, some type of "average" cost is useful. Actual costs at any given time for any given item can be difficult to assess. To calculate the "line cost average", the expected cost of each flavor is determined. This cost includes fixed (costs that apply no matter what volume is produced) and variable (costs that change with production volume) costs. This calculated cost is then multiplied by the actual, or expected, volume of the specific flavor. All such calculated costs are added and divided by the total actual, or expected, volume. This determines the "line cost average." "Line cost averaging" can help set sales and volume expectations, aid the development of new product lines, and calculate return on invested capital. For product development, the "line cost average" sets limits so that any new flavor does not negatively change overall pricing strategies. Comparing actual costs to the "line cost average" can alert operations to the impact of cost avoidance and reduction opportunities, and when pricing changes might be necessary.


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