COMM 294 Lecture Notes - Lecture 5: A143 Road, Finished Good
Document Summary
Needed for decision making by managers: pricing!products!&!services! market may override products" price, but!can"t!ignore!________________________________, price!oben! disconnected !from!cost,!e. g. market force. ______________________________________________: adding/dropping!products!&!services! (resource!allocajon), make!or!buy!decisions! (outsourcing), bidding!:!e. g. !for!an!rfp! ( request!for!proposal !or!a!tender), accept!or!reject!special!orders! For!products!that!are!individually!manufactured!or! manufactured!in!small!batches! if there is bene t much more than the cost of tracing the record, then use job-ordering costing. Unique!nature!of!each!order!requires!tracing!or! allocajng!costs!to!each!job,!and!maintaining!cost! records!for!each!job. software company, airplane manufacture, bechtel, bombardier. Charge dm and dl costs to each job as work is performed. Manufacturing overhead, including indirect materials and indirect labour, are allocated to all jobs rather than directly traced to each job. Supervisor c. m. w o rk m an. Accumulate!actual!overhead!charges! heat, light, security, cleaning, maintop supervision, prop, tax, insurance, depreciation. Drivers are imperfect e. g. heat costs for icu in hospital stay constant. Pohr is an estimate of what costs will be incurred. !#units!in!allocajon!base)! how much for one unit of product. #8dlh * / #2 units = . Cost of job = for 2 units.
