Assignment: Product Costing Project
Develop the full cost of a simple item for managerial accounting
1) Choose a simple, everyday household item (i.e. loaf of bread, fabric placemat, broom) to investigate its full cost.
2) Describe the product and why it was chosen.
3) Identify all direct and indirect materials used in production.
4) Identify the different production stages and the labor requirements for each stage.
5) Calculate the overhead.
6) You will use the material, labor, and overhead amounts to calculate the production cost per unit.
7) Find the selling price for your product.
8) Assumptions:
a) Production will be in your personal kitchen or workshop, therefore no rent expense will be incurred.
b) Use the fixed amount of $100 per month for the additional utility expense that will be incurred in the production of your product.
c) No additional major machinery/equipment will need to be purchased. Small tools and equipment such as hammers or cookie sheets may be lumped together. They will be considered to have a limited one-year life with no salvage value.
d) The federal minimum wage should be used as the labor cost per hour.
e) Assume no indirect labor.
9) Requirements:
a) The written portion of the project should be 5-6 pages, including the spreadsheets (but not including the cover page)
b) The written portion to include:
i) Why product was chosen?
ii) How cost was derived (where materials were obtained, etc.)?
iii) How was the price determined?
iv) Why your classmates should purchase your product? (Sell it - this part should be fun!)
Format your assignment according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
Attachment:- Product-Costing-on-Line-Spreadsheet.rar