Question

XKR1 EX 17-15 Decision making with job order costs Moss Manufacturing Inc. is a job shop. The management of Moss Manufacturing uses the cost information from the job sheets to assess their cost performance. Information on the total cost, product type, and quantity of items produced is as follows: Date Job No. Product Quantity Amount Jan. 2 300 $ 6,600 Jan. 15 26 M-Z4 1,300 11,700 Feb. 3 M-Z4 1,100 14,300 Mar. 7 XKR1 460 7,360 Mar. 24 SL500 1,850 12,950 May 19 SL500 2,200 19,800 June 12 XKR1 4,800 Aug. 18 SL500 2,750 30,250 Sept. 2 M-Z4 900 9,000 Nov. 14 XKR1 540 4,320 Dec. 12 SL500 2,350 32,900 a. Develop a graph for each product (three graphs), with Job Number (in date order) on the horizontal axis and Unit Cost on the vertical axis. Use this information to determine Moss Manufacturing's cost performance over time for the three products. What additional information would you require to investigate Moss Manufac- turing's cost performance more precisely? 400 102 b.

Answer 1

A B С D E F G Unit Cost of Product Amount Unit Cost [A/B aty [A] [B] 1 XKR1 Jan-02 Unit Cost of Product XKR1 22 6600 300 22 Mar-07 25 16 7360 460 16 4 Jun-12 12 4800 400 20 12 5 Nov-14 8, 4320 540 8 б 15 7 10 Unit Cost of 8 To resize chart data range, drag lower right corner of range. Product XKR1 9 5 10 0 11 Jan-08 Jan-10 12 Jan-06 13 14 15 16 17 Jan-02 Jan-04 Jan-12 Jan-14

A D E F G Total Per Unit Unit Cost Amount Units Cost [A/B] of M-Z4 [A] [B] 1 2 Jan 15 9 11700 1300 3 Feb 03 13 14300 1100 13 Unit Cost of M-Z4 4 Sept 02 10 9000 900 10 14 6 12 To resize chart data range, drag lower right corner of range. 7 10 8 8 Unit Cost of M-Z4 6 10 4 11 12 2 13 0 14 Feb 03 Jan 15 Sept 02 15 16 17 18 m n

A B C D F G Total Per Unit Cost Unit Cost Amount Units [A/B] of SL500 A] [B] 1 12950 2 Mar 24 7 1850 7 wwww 3 May 19 9 19800 2200 9 Unit Cost of SL500 4 Aug 18 30250 11 2750 11 5 Dec 12 32900 16 14. 2350 14 6 14 ll 7 12 To resize chart data range, drag lower right corner of range 8 10 9 8 Unit Cost of SL500 10 6 11 4 12 2 13 0 14 Mar 24 May 19 Aug 18 Dec 12 15 16 17 18
Unit cost of product XKR1 is declining.

Unit cost of product M-Z4 is varying. There is no fixed pattern in the unit cost.

Unit cost of product SL500 is increasing.

b. The break up of fixed and variable costs is required to evaluate the cost performance more precisely.