need help with a,b,c, and d. I need complete steps to answers please not just the answer. thanks
Scott has pulled two representative customer orders for comparison (both used 100% cotton T-shirts): Customer #1 (the Autism Awareness Society) used five colours (black, yellow, red, orange, and fuchsia) and Customer #2 (a minor hockey under-12 team) used two colours (black and white only). Orders are typically placed in quantities of 100 T-shirts. Scott plans to continue to allocate overhead costs using a predetermined rate of $2.50 per T-shirt; those overhead costs include rent, equipment maintenance and depreciation, utili- ties, part-time staff and owner salaries, and office supplies. Required Prepare a report for Scott White that addresses the following: (a) Calculate the cost of the two representative customer orders using the proposed job-order costing system envisioned by Scott. Calculate the profit margin of each T-shirt in the two representative customer orders using the current pricing scheme (that is, single price). (b) Using the cost from the proposed job-order costing system as the basis for determining price, deter- mine the appropriate price to charge for each T-shirt for the two representative customer orders. (c) Scott designs and prepares the stencils on the computer. He doesn't feel that he needs to include his design time and the cost of printing the stencils in the direct cost of the T-shirts because the computer generates both the designs and the stencil printing. Advise Scott as to whether he should incorporate the design and stencil-printing costs into his retail prices. (d) What factors should Scott consider if he refines the proposed job-order costing approach to his costing and pricing scheme? EXHIBIT 1 - COST PER COLOUR APPLICATION Colour Cost per 100 ml of ink Average Cost per Application per T-Shirt White $ 5.00 $1.00 Black $ 5.00 $1.00 Red $10.00 $2.00 Blue $12.00 $2.25 Yellow $12.00 $2.25 Purple $14.00 $2.25 Orange $15.00 $3.00 Fuchsia $20.00 $4.00