Hathaway Trophies Inc. uses a job order cost system for determining the cost to manufacture award products (plaques and trophies).
Each plaque has a brass plate engraved with the name of the participant. Engraving requires approximately 30 minutes per name. Improperly engraved names must be redone. The plate is screwed to an oak backboard. This assembly takes approximately 6 minutes per unit. Improper assembly must be redone using a new oak 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 $25.47 to $28.02?
b. Based upon unit costs, what is an area of concern for Hathaway Trophies, Inc.?
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Step by Step Answer:
Chapter # 10
Section: Metric-Based Analysis
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Question Posted: February 16, 2017 09:33:05