Creative Trophies Inc uses a job order cost system for
Creative Trophies Inc. uses a job order cost system for determining the cost to manufacture award products (plaques and trophies). Among the company’s products is an engraved plaque that is awarded to participants who complete an executive education program at a local university. The company sells the plaque to the university for $40 each.
Each plaque has a brass plate engraved with the name of the participant.
Engraving requires approximately 20 minutes per name. Improperly engraved names must be redone. The plate is screwed to a walnut backboard. This assembly takes approximately 10 minutes per unit. Improper assembly must be redone using a new walnut backboard.
During the first half of the year, the university had two separate executive education classes. The job cost sheets for the two separate jobs indicated the following information:

a. Why did the cost per plaque increase from $25.50 to $28.66?
b. What improvements would you recommend for Creative TrophiesInc.?
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help