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Product Costing Project Develop the full cost of a simple item. Choose a simple, everyday household item (i.e. loaf of bread, fabric placemat, broom) to 1. investigate its full cost. 2. Describe the product and why it was chosen. 3. Identify all direct and indirect materials used in production. Identify the different production stages and the labor requirements for each stage. 4. 5. Calculate the overhead. You will use the material, labor, and overhead amounts to calculate the production cost per 6. unit. Find the selling price for your product. 7. 8. Assumptions: Production will be in your personal kitchen or workshop, therefore no rent expense a. will be incurred. Use the fixed amount of S100 per month for the additional utilities expense that will b. be incurred in the production of your product. No additional major machinery/equipment will need to be purchased. Small tools . and equipment such as hammers or cookie shecets may be lumped together. They will be considered to have a limited one year life with no salvage value. d. The federal minimum wage should be used as the labor cost per hour. Assume no indirect labor. . 9. Requirements: X f G14 A C E F G H Product Costing Project 1 Loaf of Bread Name: 4 1) What is your product? 6 7 2) Find the direct material cost. Cost for End Centainer Direct Material 9 Sze of Package Unit Sze Cost per Unit Example flour 5 bs/22.5 cups 10 $2.50 1 cup $0.11 11 12 13 14 15 16 17 18 19 20 21 23 3) How many units will be manufactured per production run? 25 4) List amounts of all direct materials used in production per production run. Cast per un Quaity Used Direct Material m pat 2 per Preduction Cast per Preducton Run 27 above Run 28 Example flour $0.11 2 cups $0.22 29 30 31 32 33 34 35 36 37 38 39 Total direct material cost per production run 41 5) List amounts of all indirect materials used in production per month. Cent or n Indirect Material Amouet Used 43 Se af Pak Cannr Cast ger Monn par Ma 44 Example paint 5 gallons $20.00 1 gallon $4.00 45 Sheet1 Sheet2 Sheet3 + Ready Review View Formulas Data Page Layout Draw Insert Home ab A A Calibri (Body) 11 A IUv Paste X fx G85 D G A 5 List amounts of all Indirect materials used in production per month 41 Cast for ted Centainer Amauet Used Indirect Material Cest per Man Se af Parkage per Me 43 5 gallens $2000 1 gollon $4.00 Example point 44 45 46 47 48 49 50 Total Indirect material cost per month 51 6) Lst all small tools and equipment tht must be purchased. 52 Small Tools and Equipment 54 Cast 55 56 57 58 Total cost of small tools and equipment 59 60 7) What are the labor requirements? Production Stage Labor Cost per Hours per Prodution Run 62 Stage 63 64 65 66 67 Total labor hours per produtlon run 68 Total labor cost per prodution run 69 70 E) How many production runs per month? 9) What are the estimated labor hours for the entire month? 71 72 73 10) Find the estimated manufacturing overhead costs for a montth Estimated Manufacturing Overhead Costs 75 Cast 76 Utlities indirect materals (section S) 77 78 Small toos/eqipment monthly depreciation (compute using section 6 information) 79 80 Total estimated menty manfatuing overhead cost 82 11) Using labor hours as the activity base, find the overhead application rate 84 Total estimated monty manutcturing overhead cost bection 30) 85 Tatal estimated monthly labor hours betion S BE ahed netien Sheet1 Sheet2 Sheet3 + Ready ili Review View Data Formulas Page Layout Draw Insert Home A A 11 Calibri (Body) Av Paste BIU fx G124 D G H A Estimated Manufacturing Overhead Costs Cost 75 Utilities 76 Indirect materials (section 5) Small tools/equipment monthly depreciation (compute using section 6 information) 77 78 79 Total estimated monthly manufacturing overhead cost 80 82 11) Using labor hours as the activity base, find the overhead application rate. 84 Total estimated monthly manufacturing overhead cost (section 10) 85 Total estimeted monthly labor hours (bection 9) 86 Overhead application rate 87 BB 12) Find the applied overhead per production run 90 Labor hours per production run (section 7) 91 Overhead application rate (section 11) 92 Applied overhead 93 94 95 13) Find the product cost 97 Direct Materials Cost per groduction run section 4) 98 Direct Labor Cost per production run ection 7 99 Applied Overhead per production run (bection 12) 100 Total product cost per prodution run Units manufactured per production runsection 3) 101 102 103 Unit Cost 104 105 106 107 14) Pricing Decisions Be sure to include how the product will be packaged (how many per package, etc) How did you arive at the selling price? 108 209 110 111 112 113 114 Selling Price 115 116 117 118 119 15) Convince your classmates to purchase your product (sel 120 121 122 123 124 125 Product Costing Project Develop the full cost of a simple item. Choose a simple, everyday household item (i.e. loaf of bread, fabric placemat, broom) to 1. investigate its full cost. 2. Describe the product and why it was chosen. 3. Identify all direct and indirect materials used in production. Identify the different production stages and the labor requirements for each stage. 4. 5. Calculate the overhead. You will use the material, labor, and overhead amounts to calculate the production cost per 6. unit. Find the selling price for your product. 7. 8. Assumptions: Production will be in your personal kitchen or workshop, therefore no rent expense a. will be incurred. Use the fixed amount of S100 per month for the additional utilities expense that will b. be incurred in the production of your product. No additional major machinery/equipment will need to be purchased. Small tools . and equipment such as hammers or cookie shecets may be lumped together. They will be considered to have a limited one year life with no salvage value. d. The federal minimum wage should be used as the labor cost per hour. Assume no indirect labor. . 9. Requirements: X f G14 A C E F G H Product Costing Project 1 Loaf of Bread Name: 4 1) What is your product? 6 7 2) Find the direct material cost. Cost for End Centainer Direct Material 9 Sze of Package Unit Sze Cost per Unit Example flour 5 bs/22.5 cups 10 $2.50 1 cup $0.11 11 12 13 14 15 16 17 18 19 20 21 23 3) How many units will be manufactured per production run? 25 4) List amounts of all direct materials used in production per production run. Cast per un Quaity Used Direct Material m pat 2 per Preduction Cast per Preducton Run 27 above Run 28 Example flour $0.11 2 cups $0.22 29 30 31 32 33 34 35 36 37 38 39 Total direct material cost per production run 41 5) List amounts of all indirect materials used in production per month. Cent or n Indirect Material Amouet Used 43 Se af Pak Cannr Cast ger Monn par Ma 44 Example paint 5 gallons $20.00 1 gallon $4.00 45 Sheet1 Sheet2 Sheet3 + Ready Review View Formulas Data Page Layout Draw Insert Home ab A A Calibri (Body) 11 A IUv Paste X fx G85 D G A 5 List amounts of all Indirect materials used in production per month 41 Cast for ted Centainer Amauet Used Indirect Material Cest per Man Se af Parkage per Me 43 5 gallens $2000 1 gollon $4.00 Example point 44 45 46 47 48 49 50 Total Indirect material cost per month 51 6) Lst all small tools and equipment tht must be purchased. 52 Small Tools and Equipment 54 Cast 55 56 57 58 Total cost of small tools and equipment 59 60 7) What are the labor requirements? Production Stage Labor Cost per Hours per Prodution Run 62 Stage 63 64 65 66 67 Total labor hours per produtlon run 68 Total labor cost per prodution run 69 70 E) How many production runs per month? 9) What are the estimated labor hours for the entire month? 71 72 73 10) Find the estimated manufacturing overhead costs for a montth Estimated Manufacturing Overhead Costs 75 Cast 76 Utlities indirect materals (section S) 77 78 Small toos/eqipment monthly depreciation (compute using section 6 information) 79 80 Total estimated menty manfatuing overhead cost 82 11) Using labor hours as the activity base, find the overhead application rate 84 Total estimated monty manutcturing overhead cost bection 30) 85 Tatal estimated monthly labor hours betion S BE ahed netien Sheet1 Sheet2 Sheet3 + Ready ili Review View Data Formulas Page Layout Draw Insert Home A A 11 Calibri (Body) Av Paste BIU fx G124 D G H A Estimated Manufacturing Overhead Costs Cost 75 Utilities 76 Indirect materials (section 5) Small tools/equipment monthly depreciation (compute using section 6 information) 77 78 79 Total estimated monthly manufacturing overhead cost 80 82 11) Using labor hours as the activity base, find the overhead application rate. 84 Total estimated monthly manufacturing overhead cost (section 10) 85 Total estimeted monthly labor hours (bection 9) 86 Overhead application rate 87 BB 12) Find the applied overhead per production run 90 Labor hours per production run (section 7) 91 Overhead application rate (section 11) 92 Applied overhead 93 94 95 13) Find the product cost 97 Direct Materials Cost per groduction run section 4) 98 Direct Labor Cost per production run ection 7 99 Applied Overhead per production run (bection 12) 100 Total product cost per prodution run Units manufactured per production runsection 3) 101 102 103 Unit Cost 104 105 106 107 14) Pricing Decisions Be sure to include how the product will be packaged (how many per package, etc) How did you arive at the selling price? 108 209 110 111 112 113 114 Selling Price 115 116 117 118 119 15) Convince your classmates to purchase your product (sel 120 121 122 123 124 125

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