Tapestry, Inc. is a leading New York-based house of modern luxury lifestyle brands. The company was formerly known as Coach, Inc. and was founded in 1941. Today, Tapestry operates through its three flagship brands: Coach, Kate Spade, and Stuart Weitzman. The company designs, manufactures, and markets handbags, footwear, accessories, and ready-to-wear apparel for women and men. Tapestry's products are sold globally through its retail stores, e-commerce websites, and wholesale distribution channels.

Tapestry's business environment is highly competitive and influenced by changing consumer preferences and fashion trends. The company operates in the fashion and luxury goods industry, which is sensitive to economic cycles and consumer spending patterns. Tapestry's production process involves designing and developing new products, sourcing raw materials, manufacturing, distribution, and marketing.

Product Costing Method:

1.Tapestry is likely to use job costing for its product costing, as each product is unique and requires a different set of inputs. For example, the company's Kate Spade handbags are designed with unique prints, shapes, and materials, making it challenging to apply process costing. In contrast, Stuart Weitzman's footwear may be better suited for process costing as the production process is more standardized. However, given the company's focus on customization and personalization, it is likely that job costing is the more appropriate method for Tapestry's product costing.

In the fashion and luxury goods industry, the use of process costing is not common as products are designed to be unique, and there are no standardized production methods. The industry is also known for high customization and a focus on craftsmanship, which favors job costing.

Joint Products and Cost Allocation:

2. In Item 1 of the 10-K, Tapestry mentions that its Coach brand offers fragrance products and jewelry, which can be considered joint products. For example, the company's fragrances are designed to complement its handbags and accessories, and its jewelry collection is designed to match its clothing and handbags.

The split-off point for these joint products is likely to be at the point of sale, as the products are sold separately and have different costs of production. To allocate joint costs, the company can use the sales value at split-off method or the physical measure method. The sales value at split-off method allocates joint costs based on the relative sales value of each product, while the physical measure method allocates joint costs based on the physical quantity of each product.

Overall, Tapestry's business environment is highly competitive and sensitive to changing consumer preferences and fashion trends. The company's production process involves designing unique products, sourcing raw materials, manufacturing, distribution, and marketing. Tapestry is likely to use job costing for its product costing, and joint products can be allocated using the sales value at split-off or physical measure method.

3. In Item 1 of the 10-K, Tapestry mentions that its Coach brand offers fragrance products and jewelry, which can be considered joint products. Fragrances and jewelry are complementary products that are designed to enhance the overall brand experience for customers. Another example of a joint product for Tapestry could be its Kate Spade handbags and accessories. These products are designed to be worn together and complement each other, such as a handbag and matching wallet or scarf. The split-off point for these joint products would also be at the point of sale, as the products are sold separately and have different costs of production. The sales value at split-off method or physical measure method could be used to allocate joint costs for these products.

Overall, Tapestry offers several complementary products that can be considered joint products, such as fragrances and jewelry, as well as handbags and accessories. The company can use the sales value at split-off or physical measure method to allocate joint costs for these products.

 

Reference: 

Tapestry Inc. 10- K Annual