Some are calling this the new “Cheeseapocalypse” as Kraft Foods Group recalls 260 cases of Velveeta sold to Walmart because the batches lack enough preservatives and could “spoil prematurely and/or lead to food borne illness.”
1. What states are affected by the recall?
2. What ingredient is causing the recall?
3. What types of costs would Kraft Foods have for their liquid gold campaign and how should they be recorded in the financial statements?
4. What types of costs would Kraft Foods have for their recall of the product and how should these be recorded in the financial statements?
5. Since the recall have either Kraft Foods or Walmart stocks gone down in the market? Could this be due to the recall? Explain.
Picchi, A. (2014). With Velveeta Recall, A New ‘Cheesapocalypse.’ CBS News Watch, June 20 (Retrievable online at http://www.cbsnews.com/news/with-velveeta-recall-a-new-cheesapocalypse-emerges/)