job order costing - how do these articles relate???

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job-order costing (managerial accounting)
1. locate the articles or websites listed at the end of the each of the featured business stories below.
2. what in the articles relates to job-order costing from your research.

is this really a job?
vbt bicycling vacations of bristol, vermont, offers deluxe bicycling vacations in the united states, canada, europe, and other locations throughout the world. for example, the company offers a 10-day tour of the puglia region of italy—the “heel of the boot.” the tour price includes international airfare, 10 nights of lodging, most meals, use of a bicycle, and ground transportation as needed. each tour is led by at least two local tour leaders, one of whom rides with the guests along the tour route. the other tour leader drives a “sag wagon” that carries extra water, snacks, and bicycle re- pair equipment and is available for a shuttle back to the hotel or up a hill. the sag wagon also transports guests’ luggage from one hotel to another.
each specific tour can be considered a job. for example, giuliano astore and debora trip- petti, two natives of puglia, led a vbt tour with 17 guests over 10 days in late april. at the end of the tour, giuliano submitted a report, a sort of job cost sheet, to vbt headquarters. this report detailed the on the ground expenses incurred for this specific tour, including fuel and operating costs for the van, lodging costs for the guests, the costs of meals provided to guests, the costs of snacks, the cost of hiring additional ground transportation as needed, and the wages of the tour leaders. in addition to these costs, some costs are paid directly by vbt in vermont to vendors. the total cost incurred for the tour is then compared to the total revenue collected from guests to determine the gross profit for the tour.
sources: giuliano astore and gregg marston, president, vbt bicycling vacations. for more information about vbt, see

bucking the trend: using people instead of machines
for decades overhead costs have been going up and labor costs have been going down as compa- nies have replaced people with machines. however, at the french automaker renault, the exact opposite has been happening with its new, no-frills vehicle called the logan. the logan was inten- tionally stripped of costly elements and unnecessary technology so that the car could be sold for $6,000 in emerging eastern european markets. the car’s simplified design enables renault’s manu- facturing plant in romania to assemble the car almost entirely with people instead of robots. the monthly pay for a line worker at renault’s romanian plant is $324 versus an average of more than $4,700 per worker in western european countries. thanks in part to low-cost labor, logan’s produc- tion costs are estimated to be just $1,089 per unit.
the logan is finding buyers not only in emerging markets but also in more advanced western european nations where customers have been clamoring for the car. renault expects sales for the logan to climb to one million vehicles by 2010—adding $341 million to its profits.
source: gail edmondson and constance faivre d’arcier, “got 5,000 euros? need a new car?” businessweek, july 4, 2005, p. 49.

reducing health-damaging behaviors
cianbro is an industrial construction company headquarted in pittsfield, maine, whose goal is “to be the healthies company in america.” it introduced a corporate wellness program to attack employee behaviors that drive up health-care costs. the table below summarizes the number of employees in five health risk catagories as of 2003 and 2005. the decreases in the number of employees in these high-risk categories are evidence that the wellness program was effective in helping employees make positive lifestyle changes. this should result in reduced health-care costs for the company.

number of employees
health risk category january 2003 march 2005 decrease
obesity……………. 432 353 79
high cholesterol….. 637 515 122
tobacco use………. 384 274 110
inactivity………….. 354 254 100
high blood pressure.. 139 91 48

source: cianbro, welcoa’s absolute advantage magazine, 2006.

one-of-a kind masterpiece
in a true job-order costing environment, every job is unique. for example, purdey manufactures 80-90 shotgun per year with each gun being specially commissioned one-of-a-kind masterpiece. the price starts at $110,000 because every detail is custom built, engraved, assembled, and polished by a skilled craftsman. the hand engraving can take month to complete and may add as much as $100,000 to the price. the guns are designed to shoot perfectly straight and their value increase over time even with heavy use. one purdey gun collector said “when i shoot my purdeys i feel like an orchestra conductor waving my baton.”
source: eric arnold, “aim high”, forbes, december 28, 2009, p. 86

managing job costs in a service business
ibm has created a software program called professional marketplace to match ibm employees with client needs. “using marketplace, ibm consultants working for customers can search through 100 job classifications and 10,000 skills, figuring out who inside ibm is available, where they are located and roughly how much it costs the company to use them.” thus far, the results have been encourag- ing. ibm has reduced its reliance on outside contractors by 5% to 7% and its consultants spend more of their time in billable work. furthermore, ibm’s senior consultants can search across the globe for available employees with particular niche skills with the click of a mouse instead of having to rely on numerous time-consuming phone calls and emails.

source: charles forelle, “ibm tool deploys employees efficiently,” the wall street journal, july 14, 2005, p. b3.,,sb112130518499485395,00-search.html
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