Chapter 17, Problem 17.15EX

Decision making with job order costs

Alvarez Manufacturing Inc. is a job shop. The management of Alvarez Manufacturing Inc. uses the cost information from the job sheets to assess 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	1	TT	520	$16,120
Jan. 15	22	SS	1,610	20,125
Feb. 3	30	SS	1,420	25,560
Mar. 7	41	TT	670	15,075
Mar. 24	49	SLK	2,210	22,100
May 19	58	SLK	2,550	31,875
June 12	65	TT	620	10,540
Aug. 18	78	SLK	3,110	48,205
Sept. 2	82	SS	1,210	16,940
Nov. 14	92	TT	750	8,250
Dec. 12	98	SLK	2,700	52,650

• 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 Alvarez Manufacturing Inc.'s cost performance over time for the three products.
• b. What additional information would you require in order to investigate Alvarez Manufacturing Inc.’s cost performance more precisely?