Designer 50 Cannon Number of orders per year Annual bolts demanded Price per bolt Ordering cost per order Inspection cost per bolt Average inventory level Expected number of stockouts Stockout cost of rush order Estimated number of jeans returned by customers because of defective fabric Cost of fixing jeans returned by customers because of defective fabric Opportunity cost of investment Other carrying costs per bolt per year 1. What is the relevant cost of purchasing from Designer Fabrics and Cannon Cotton? What factors other than cost should Couture Jeans consider? 50 2,000 $ 195 2,000 $ 200 $ 150 $ 30 20 10 $ 20 100 $ 200 $ 30 20 10 $ 15 $ 25 15% $ 10 200 $ 25 15% $ 10 Required
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Supply-chain effects on total relevant inventory cost. Couture Jeans orders high-quality denim fabric from two different suppliers: Designer Fabrics and Cannon Cotton. Couture would like to use only one of the suppliers in the future. Due to variations in quality, Couture would need to inspect 20% of Designer’s 30-yard bolts (rolls) and 30% of Cannon’s. The following data refer to costs associated with the two suppliers.
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