Sharp 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 $75 each.
Each plaque has a brass plate engraved with the name of the participant. Engraving requires approximately 6 minutes per name. Improperly engraved names must be redone. The plate is screwed to a walnut backboard. This assembly takes approximately 3 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 $49.40 to $64.30?
b. What improvements would you recommend for Sharp TrophiesInc.?

Transcribed Image Text:

Job 103 March 4 Cost per Unit Units Job Cost Direct materials: Wood $600.00 540.00 120.00 42.00 180.00 $1,482.00 30 49.40 $20.00/unit 30 units 30 units 3 hrs Brass Engraving labor Assembly labor Factory overhead 18.00/unit 40.00/hr 28.00/hr 30.00/hr 1.5 hrs 6 hrs. Plaques shipped Cost per plaque Job 116 April 15 Cost per Unit Units Job Cost Direct materials: Wood $20.00/unit 25 units500.00 450.00 160.00 56.00 120.00 $1,286.00 20 $64.30 Brass Engraving labor Assembly labor Factory overhead 18.00/unit 40.00/hr 28.00/hr 30.00/hr 25 units 4 hrs. 2 hrs. 4 hrs Plaques shipped Cost per plaque