Catering

Wedding$-$planning consulting

Video production company

Pool building company

Personal shopping service

Interior design business

Flower shop

Rock$-$climbing guide service

River$-$rafting company

Web design company

Required:

For whatever business venture you select, answer the following questions:

What would the major costs of your business be$?$ Try to classify the costs into the areas of direct materials; direct labor; manufacturing overhead; and selling, general, and administrative expenses. $($Hint: Not all businesses will have all of these cost classifications.$)$

Why would you need to determine the cost of providing your product or service to individual customers? In other words, what types of decisions would you expect to make based on job order cost information?

In general, would you expect your company's indirect $($overhead$)$ costs to be less or more than the direct costs $($direct labor and materials$)?$ What allocation base do you think you would use to charge overhead costs to individual customers? How much do you think the overhead rate would need to be$?$

Create a job cost sheet for a hypothetical "average" customer that includes estimates of the major costs of serving that customer. How much do you think you would need to charge to cover all of the costs plus provide a reasonable profit for yourself?