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  • A Breakdown of Our Goals and Plans

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    Hakeshi Scarlet
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    The document discusses IKEA and job costing. It provides information about IKEA, including that it is a Swedish multinational retailer known for ready-to-assemble furniture. It defines direct labor as employees who work directly on products, and direct materials as raw materials made into finished products. It also explains that overhead refers to ongoing business expenses, and that IKEA assigns overhead costs by dividing total overhead by direct labor hours. Finally, it outlines the six steps IKEA uses to determine what to charge customers which includes identifying activities, allocating costs, selecting cost drivers, defining volumes, calculations, and adding profit margins.

    Original Description:

    Example of process costing and its description on IKEA

    Original Title

    A breakdown of our goals and plans

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    The document discusses IKEA and job costing. It provides information about IKEA, including that it is a Swedish multinational retailer known for ready-to-assemble furniture. It defines direct labor as employees who work directly on products, and direct materials as raw materials made into finished products. It also explains that overhead refers to ongoing business expenses, and that IKEA assigns overhead costs by dividing total overhead by direct labor hours. Finally, it outlines the six steps IKEA uses to determine what to charge customers which includes identifying activities, allocating costs, selecting cost drivers, defining volumes, calculations, and adding profit margins.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    11 views14 pages

    A Breakdown of Our Goals and Plans

    Uploaded by

    Hakeshi Scarlet
    The document discusses IKEA and job costing. It provides information about IKEA, including that it is a Swedish multinational retailer known for ready-to-assemble furniture. It defines direct labor as employees who work directly on products, and direct materials as raw materials made into finished products. It also explains that overhead refers to ongoing business expenses, and that IKEA assigns overhead costs by dividing total overhead by direct labor hours. Finally, it outlines the six steps IKEA uses to determine what to charge customers which includes identifying activities, allocating costs, selecting cost drivers, defining volumes, calculations, and adding profit margins.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 14

    Muhammad Ravi Adel Rayenzah 12010121190089

    Loran Vincentsius Yeremia 12010121190114


    Ghassani Nur Amalina Santosa 12010121190090
    Ashim Mortezza Marshal 12010121190104
    Document and
    What's the procedure for
    company records Direct Labour

    TODAY'S
    AGENDA
    Complete job Overhead Cost
    POINTS FOR DISCUSSION
    Accountment

    Charges Direct Materials


    determination
    WHAT IS
    IKEA
    A DISCUSSION ON JOB COSTING

    Swedish-origin company
    Swedish multinational conglomerate
    Based in the Netherlands
    Started in 1943
    World's largest furniture retailer since 2008.

    What do they offer?


    IKEA designs and sells ready-to-assemble
    furniture, kitchen appliances, home accessories,
    and various other goods and home services.
    Self Service
    warehouse
    What is it?

    Direct labor refers to the employees and temporary staff who


    work directly on a manufacturer's products.

    All individuals who responsible for producing in IKEA: production line


    workers, assembly line workers, packaging workers, production
    supervisors, and delivery truck drivers.

    Direct Labor Cost = Labor Cost per Hour * Number of Man Hours Required
    Direct materials are raw materials that are
    made into finished products: woods, steel,
    primary packing materials.

    DIRECT The cost of the material is evaluated before


    the material is processed using the proper

    MATERIAL equipment to shape it according to its final


    design of the products.

    Direct Material Cost =


    Sum of Every Direct Material Cost Consumed in
    the Period
    DIRECT MATERIAL

    WOOD WOOL

    NATURAL
    COTTON FIBRES
    DIRECT MATERIAL

    SCRAP OR RECYCLED PLASTIC

    COMPOSITE BAMBOO
    What is it?
    overhead refers to all ongoing business expenses.

    Take it home Policy help reduce


    How do IKEA assign overhead cost.
    overhead
    Divide entire overhead expenditures by total direct labor
    IKEA allows consumers to take home their purchases on hours. Then, they must multiply the overhead allocation
    the same day if they are able to do so by themselves. As rate by the number of direct labor hours.
    annoying as this policy may be, it does provide certain
    benefits to the overall effort to keep costs down.
    How do IKEA determine what to charge
    to customer?
    There are six steps to figuring out what to charge to customer
    Identify and select activities
    Allocate costs to the selected activities
    Select cost drivers
    Define the cost driver volumes:
    Calculations
    After knowing the total cost, add profit margin
    Accounting Completed Job
    Accounting Completed Job
    Cost of Goods
    Sold
    The cost of goods sold relates to both
    wholesale and Delft store sales. Inter
    IKEA Group manufactures about 11% of
    the IKEA product range and sources the
    remaining 89% from nearly 1,000
    external suppliers. This includes both
    home furnishing and food products.
    THANK YOU FOR
    YOUR TIME!
    Ask us for any questions

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