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Job Order Costing - The Chocolate Chip Cookie Project Activity 1 - Job Order Costing: Select a company name for a cookie company. Determine job
Job Order Costing - The Chocolate Chip Cookie Project
Activity 1 - Job Order Costing:
- Select a company name for a cookie company.
- Determine job specifications: cookie quality, size, appearance, special features (types of chips, nuts) quantity, and packaging. (See the quality standards information below).
- Determine production tasks and feel free to enlist family, friends or classmates in this project. If enlist help, it is appropriate to make team assignments (i.e., mixer, baker, timer, quality control, materials purchaser, accountant, marketer).
- Select a recipe.
- Using Excel, develop job measurement document. (See information below)
- Using Excel, develop job order cost card. (See information below)
- Produce a product and complete the job measurement and job cost information.
- Take a picture of the final product and illustrate a promotional piece for the product. (Create in Microsoft Office Word (.doc or .docx) or Rich Text format (rtf.)
- Evaluate results of the process, and final product. Determined the quality standards. (See information below). (Create final evaluation results in a Microsoft Office Word (.doc or .docx) or Rich Text format (rtf.) for submission.)
Job Measurement Document
- Cost per cookie
- Number of cookies produced=number meeting specs + number rejected + number reworked + number sampled for quality control + unexplained differences
- Size of cookies before baking
- Size of cookies after baking
- Total throughput time=mix time + (bake time for one cookie sheet x number of cookie sheets processed) + packaging time + downtime + cleanup time
Required Comments:
- What is the cost per cookie?
- What measures are used to effectively evaluate production performance?
- What measures would be unnecessary? Why?
Job Cost Card (Reference Chapter 5)
- Assume an overhead rate of $2 for every $1 of direct materials.
- Assign each production task an hourly rate or a monthly salary based on the perception of the job market for the task involved.
- Attempt to quantify actual overhead. List the types of costs that would go into the actual overhead.
- Evaluate the $2 overhead rate for reasonableness.
Promotional Piece Create a flyer to promote a product. The flyer should include:
- A chosen company name
- Job specifications
- Recipe
- Job cost card
- A picture of the final cook product
- What makes the cookie better than the competition? Utilize the predetermined evaluation criteria with promotion.
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