Working in a cost accounting environment you will probably use costing software that will roll the product cost for you. Your responsibility is to make sure all part cost and labor rates are in the respective cost files. Please note the cost you develop is used to calculate cost of goods sold and to value inventory, accuracy is imperative.

Product costing is a tedious and involved process. This project will afford you at least a rudimentary knowledge if you should be employed as a cost accountant.

Material Cost File

Part Number Unit Cost

A2 .35

A3 .40

B2 .20

B3 .30

C2 .15

C3 .25

Labor rate per hour is $15.00.

Assembly time from industrial engineering is .012 hours per assembly.

Factory overhead rate is 150% of labor cost.

Please cost the Widget above. Use the material cost file for material cost, assembly time from industrial engineering for assembly and the overhead rated determined from the budgeting process. Please pay attention to the quantity column.

Widget-ProductStructure