Textile Crafts Company (TCC) sells craft kits and supplies to retail outlets and through online sites such as Etsy.com. Some of the items are manufactured by TCC, while others are purchased for resale. For the products it manufactures, the company currently bases its selling prices on a product-costing system that accounts for direct material, direct labor, and the associated overhead costs. In addition to these product costs, TCC incurs substantial selling costs, and Roger Jackson, controller, has suggested that these selling costs should be included in the product pricing structure. After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Sales commissions Pay-per-click/Search engine optimization Cost of online sales. Credit and collection Total selling costs Order Size Small Medium Large The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is not permitted. Commissions are paid on sales to retail outlets but not on online sales. The cost of online sales includes technology infrastructure costs and the wages of personnel who process the online orders. Jackson believes that the selling costs vary significantly with the size of the order. Order sizes are divided into three categories as follows: Online Sales skeins Retail Sales 1 to 10 boxes 11 to 20 boxes Over 20 boxes An analysis of the previous year's records produced the following statistics. 1 to 10 11 to 20 skeins Over 20 skeins Items Retail sales boxes (12 skeins per box) Online sales, skeins Amount $ 738,000 Small Cost Driver Boxes of yarn sold to retail stores Number of online leads 548,100 117,600 89,100 Number of retail orders Skeins sold online 5,500 86,000 555 459,590. $ 1,492,800 Order Size Medium 55,500 59,000 2,765 550,370 Large 185,000 51,000 4,780 86,240 Total 246,000 196,000 8,100 1,096, 200 Number of retail orders Number of online leads Required: 1. Prepare a schedule showing TCC's total selling cost for each order size and the per-skein selling cost within each order size. Note: Round your intermediate calculations and unit cost per order to 2 decimal places.

Textile Crafts Company (TCC) sells craft kits and supplies to retail outlets and through online sites such as Etsy.com. Some of the items are manufactured by TCC, while others are purchased for resale. For the products it manufactures, the company currently bases its selling prices on a product-costing system that accounts for direct material, direct labor, and the associated overhead costs. In addition to these product costs, TCC incurs substantial selling costs, and Roger Jackson, controller, has suggested that these selling costs should be included in the product pricing structure. After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Sales commissions Pay-per-click/Search engine optimization Cost of online sales. Credit and collection Total selling costs Order Size Small Medium Large The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is not permitted. Commissions are paid on sales to retail outlets but not on online sales. The cost of online sales includes technology infrastructure costs and the wages of personnel who process the online orders. Jackson believes that the selling costs vary significantly with the size of the order. Order sizes are divided into three categories as follows: Online Sales skeins Retail Sales 1 to 10 boxes 11 to 20 boxes Over 20 boxes An analysis of the previous year's records produced the following statistics. 1 to 10 11 to 20 skeins Over 20 skeins Items Retail sales boxes (12 skeins per box) Online sales, skeins Amount $ 738,000 Small Cost Driver Boxes of yarn sold to retail stores Number of online leads 548,100 117,600 89,100 Number of retail orders Skeins sold online 5,500 86,000 555 459,590. $ 1,492,800 Order Size Medium 55,500 59,000 2,765 550,370 Large 185,000 51,000 4,780 86,240 Total 246,000 196,000 8,100 1,096, 200 Number of retail orders Number of online leads Required: 1. Prepare a schedule showing TCC's total selling cost for each order size and the per-skein selling cost within each order size. Note: Round your intermediate calculations and unit cost per order to 2 decimal places.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4PA: Listed as follows are various costs found in businesses. Classify each cost as a fixed or variable...

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