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Boardies @ Mermaid (Boardies) is a manufacturer of a number of items of代写澳洲论文surf gear. What began as a small family business has now grown into a firm with a large and very popular product range. The business has always been organised as a partnership, and is not looking to change the business structure.

The department of interest for this case is the Clothing Department of Boardies which produces the board shorts product range. The firm produces three lines in the range – Surf, Sun and Sand. Some of the firm’s products have a relatively short lifetime. It is quite possible that styles popular in one period are out of fashion by the next period. This is the case with board shorts.

The firm has begun a review of its costing systems across all its departments and management is requesting some information to assist with the review.

Costing system currently used

The firm accounts for its products using standard absorption job costing, applying overhead to products using a plant-wide rate based on direct labour hours. Materials purchases are recorded at actual cost. Work in process and finished goods inventories reflect standard costs. All cost variances in the period are transferred to cost of goods sold at the end of the period.

This existing costing system was established when only one line of board shorts was produced and when overhead was a significantly smaller proportion of total cost than it is now.

Standards are determined at the point when the product is initially designed. These are regularly updated to take into account changes in the manufacturing process and reflect the increased expertise of direct labourers in the factory. In the period just past a slight change was made in the layout of the Clothing Department manufacturing space which should reduce the standard time per product, but the standard for labour had not yet been changed to reflect this. The firm prides itself on its very efficient labour force, and the Clothing Department seldom has cost over-runs due to labour inefficiency.

Materials for board shorts are fabric, cottons, and depending on the styles, zippers, buttons, Velcro and logos. In the existing costing system the only material which is traced directly to the product is fabric. Cottons, buttons, zippers, Velcro and logos are treated as indirect materials (OH). All on-costs on wages are treated as indirect costs (OH). In this past reporting period a new type of fabric was purchased from Boardies’ fabric supplier. The supplier had claimed (and testing by our factory supervisors and workers supported this claim) that the new material (which was of very high quality, yet cost a similar price to the old material) was easier to work with in terms of both cutting and sewing. The supplier is known to be reliable in terms of material supply. These facts are not in dispute.

Areas of responsibility

Production supervisors have discretion about the volume of production, and purchasing supervisors discretion about the purchase of material. 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。