UNIVERSITY OF TECHNOLOGY MARA

CAWANGAN NEGERI SEMBILAN (KAMPUS SEREMBAN 3)

FACULTY OF ADMINISTRATIVE SCIENCE AND POLICY STUDIES

BACHELOR OF ADMINISTRATIVE SCIENCE

ACC416
COST AND MANAGEMENT ACCOUNTING

ASSIGNMENT 1
GROUP – N4AM2282A

PREPARED BY :
(1) NUR IZREEN SYAZMIN BINTI NASRUDIN 2022664124

(2) NUR AZLIN BINTI JAMIL 2022835674

(3) NURIN ATHIRAH BINTI ABD HOLED 2022864888

(4) MUHAMMAD HARITH ISKANDAR BIN ESA 2022616556

(5) NORIMAN ARIFF BIN SAIFUL BAHAR 2022912437

PREPARED FOR :
DR. SALWA

SUBMISSION DATE : 30th of JUNE 2023

 TABLE OF CONTENTS

1.0 ACKNOWLEDGEMENT
2.0 INTRODUCTION
2.1 BUSINESS BACKGROUND
2.2 NATURE OF THE BUSINESS
2.3 PRODUCT
3.0 MATERIALS
3.1 JUST-IN-TIME
3.1.1 DEFINITION
3.1.2 OBJECTIVES
3.1.3 CHARACTERISTIC
3.1.4 ADVANTAGES
3.1.5 IMPLICATION
3.2 SEVEN TECHNOLOGY TRENDS THAT MAY HAVE THE BIGGEST IMPACT
ON THE FUTURE OF WAREHOUSE
3.2.1 BIG DATA AND ANALYTICS
3.2.2 THE INTERNET OF THINGS
3.2.3 MOBILE TECHNOLOGY
3.2.4 THE TECH-SAVVY WORKFORCE
3.2.5 ADVANCED ROBOTICS
3.2.6 AUTONOMOUS VEHICLES
3.2.7 NEW ENERGY SOURCES
3.3 ECONOMIC ORDER QUANTITY (EOQ) TABULATION
4.0 OVERHEAD
4.1 TYPES OF OVERHEAD
4.2 OVERHEAD ANALYSIS SHEET
5.0 FACTORY JOB COSTING
5.1 THE DIFFERENCE BETWEEN JOB AND BATCH COSTING
5.2 JOB COSTING
6.0 CONCLUSION
7.0 REFERENCES

1.0 ACKNOWLEDGEMENT
We are grateful to Allah SWT for giving us the opportunity to finish this report with His
permission. This project assignment was under the University of Technology Mara and was
created based on the university’s suggested procedures.
First of all, we would like to give
2.0 INTRODUCTION
2.1 BUSINESS BACKGROUND

Name STyletto Company

Location No. 68, Jalan Kasawari 14,
Seksyen 31, Bandar Baru Bangi,
43650 Bangi,
Selangor
Capital RM300,000
Owner Shahmira and Talitha
Year of Establishment 2015 in Selangor
Type of Business Partnership
Name of Products Leather Shoes

STyletto is our company brand that sells leather shoes as the main products. It is
located in Bangi, Selangor that had been started its business operation for around 8 years
since 2015. This business operates as a partnership which has been registered under the
Business Registration Act 195 in the year of 2015 with Suruhanjaya Syarikat Malaysia
(SSM). We named the business as STyletto because it combined the capital letters of both
of the owner which is Shahmira and Talitha. In order to make it sounds unforgettable and
easy to remember, we added the word of style as leather represents stylistic and unique at
its points of view. So, whoever that wear the shoes looks expensive. As stiletto means a
shoe with a narrow, thin and high heels in Italy that usually worn by women, we changed it a
bit to make it difference from that context. Therefore, instead of high heels and only can be
wear by women, our shoes, STyletto was designed to be fit to everybody including both
women and men. For the initial capital, we started this business with RM300,000 that equally
provided by both of us, either from our own funds, saving or bank loan after we have been
graduated from university in Architecture and Interior Design in Taylor’s University.
Basically, we decided to produce leather shoes as
2.2 NATURE OF THE BUSINESS

Operation Hours 8 Hours

No. of Employees 150 Employees
Business Activity
Departments a. Production :
i) Stamping
ii) Sewing
iii) Assembling
iv) Finishing

b. Non-Production :
i) Packaging
ii) Store
2.3 PRODUCTS

Name of the Products Leather Shoes

Materials a. Direct

Process to Manufacture the Products
Material Costs
No of Labors in Each Department
Expenses
b. Indirect
a. Stamping – 20 Labors
b. Sewing – 30 Labors
c. Assembling – 40 Labors
d. Finishing – 45 Labors
e. Packaging – 10 Labors
f. Store – 5 Labors
3.0 MATERIALS
3.1 JUST-IN-TIME
3.1.1 DEFINITION
Just-in-Time (JIT) is a production strategy or inventory management approach that aims to
minimize inventory levels and associated costs by receiving and producing goods or
services only when they are needed. It involves synchronizing the flow of materials,
information, and activities within a production system to meet customer demand precisely.
By JIT, companies
strive to achieve a lean and efficient production system that maximizes value while reduces
waste.
3.1.2 OBJECTIVES
i. Minimizing Inventory
JIT seeks to reduce inventory levels to the bare minimum necessary for operations. Excess
inventory is prevented by using a "pull" approach, in which resources are only ordered and
produced as needed. This goal contributes to capital release, lowers storage expenses, and
delays obsolescence.
ii. Eliminating trash
JIT focuses on locating and getting rid of different types of trash, or "muda" as it is known in
Japanese. Waste here refers to overproduction, superfluous inventory, needless travel,
waiting periods, flaws, and ineffective procedures. Operational simplification, resource
optimization, and increased overall production are the objectives.
iii. Improving Quality
JIT places a strong emphasis on the need for high-quality product production. Defects and
mistakes are reduced by applying strict quality control methods throughout the production
process. This goal results in more customer satisfaction, less rework, and fewer defect-
related expenses.
iv. Enhancing Efficiency
JIT strives to increase operational efficiency by cutting down on lead times, setup periods,
and production cycle times. It emphasizes workflow optimization, optimal equipment
utilization, and the reduction of non-value-added operations. The goal is to enhance
throughput, decrease reaction times, and boost efficiency all around.
v. Increasing Flexibility and Responsiveness
JIT promotes organizations' flexibility and responsiveness to changing market conditions and
client demands. Companies may swiftly respond to changes in client preferences, market
conditions, and production requirements by keeping a lean inventory and using effective
manufacturing methods.
vi. Building Trustworthy Supplier connections
JIT understands the value of having trustworthy supplier connections. To guarantee the
timely delivery of supplies and parts and to uphold quality standards, close cooperation and
communication with suppliers are essential. This goal aids in establishing a dependable
supply chain and minimizing interruptions.
3.1.3 CHARACTERISTIC
i. Inventory Minimization
JIT places a strong emphasis on keeping inventory levels as low as possible. Rather of
keeping substantial inventories of completed items, work-in-progress (WIP), or raw
materials, JIT concentrates on having just the correct amount of inventory to satisfy current
production needs and customer requests.
ii. Demand-driven Production
JIT aligns production with actual customer demand. Rather than relying on forecasts, JIT
systems use real-time customer orders or signals to initiate production. This approach helps
avoid overproduction and reduces the risk of carrying excess inventory.
iii. Pull-based System
JIT utilizes a pull-based approach where production is triggered by the actual demand from
downstream processes or customers. Each step in the production process pulls materials or
components from the preceding step, creating a smooth flow of work and eliminating
bottlenecks.
iv. Continuous Flow
JIT strives to achieve a constant, continuous and uninterrupted flow of the materials and
information throughout the production process. This necessitates eliminating any pointless
holdups, waits, or non-value-added operations. JIT decreases lead times and boosts overall
production by streamlining the flow.
v. Quality Focus
JIT puts a lot of emphasis on quality control. JIT lessens the possibility of faulty goods or
faults spreading farther along the production line by identifying and resolving quality issues
at their source. Rework, scrap, and associated expenses can be reduced by upholding high
standards.
vi. Flexible Workforce
JIT systems frequently call for a flexible and multiskilled staff. Employees are capable of
adjusting to shifting production demands and are trained to do a variety of activities. This
adaptability promotes effective use of labor resources and facilitates efficient operations.
vii. Supplier Partnership
Strong ties and collaborations with suppliers are essential to JIT. Suppliers are expected to
deliver high-quality goods, parts, and services in the needed amounts and at the appropriate
times. To guarantee prompt and dependable delivery, close cooperation and contact with
suppliers are necessary.
viii. Continuous Development
JIT supports a culture of constant development. JIT works to reduce waste, reorganize
workflows, and boost productivity by utilizing strategies like Kaizen (continuous incremental
improvement). Organizations may optimize their operations and efficiently adapt to shifting
market conditions by continuously looking for ways to improve.
3.1.4 ADVANTAGES
i. Cost-cutting
JIT helps cut costs by lowering warehouse costs, inventory holding costs, and the risk of
obsolescence. Businesses are able to minimize overproduction and excess inventory, which
results in cheaper carrying costs and better cash flow.
ii. Waste Reduction
JIT decreases the risk of creating faulty or unneeded goods by generating products in
response to actual consumer demand. The waste brought on by extra inventory,
overproduction, transportation, waiting periods, and pointless processing steps is reduced as
a result.
iii. Better Quality
Quality control is heavily emphasized in JIT throughout the whole production process, which
results in higher quality products. Companies may more effectively detect and manage
quality concerns, leading to greater product quality and customer satisfaction, by lowering
batch sizes and concentrating on continuous improvement.
iv. Greater Adaptability and Responsiveness
JIT enables companies to respond more swiftly to shifts in consumer demand and market
circumstances. Companies may more readily change their production volumes, product mix,
and delivery timetables with a leaner and more effective production system. This
responsiveness improves customer service and aids in fulfilling particular consumer needs.
v. Lead Time Reduction
JIT seeks to reduce the amount of time needed to complete each stage of the production
process. Lead times may be greatly shortened by removing non-value-added tasks and
improving processes. As a consequence, orders are filled more quickly, cycles are shorter,
and delivery performance is enhanced.
vi. Optimization of Space
Since JIT reduces inventory levels, it helps to cut down on the amount of space needed for
storage and warehousing. This enables companies to make better use of their facilities and
perhaps save money on real estate.
vi. Employee Involvement and Empowerment
Employee empowerment and high levels of employee participation are necessary for JIT, as
is cross-functional cooperation. JIT may raise employee morale, job satisfaction, and general
involvement by giving them the freedom to make decisions, offer suggestions, and take part
in process changes.
3.1.5 IMPLICATIONS
i. Supply Chain Integration
JIT necessitates good coordination and cooperation with partners and suppliers. Increased
supplier connections, shorter lead times, greater communication, and better overall supply
chain management can all result from this integration.
ii. Flexibility Challenges
JIT depends on exact timing and synchronization, which can be problematic in dynamic
contexts, during times of strong demand, or when the supply chain is disrupted. Any point in
the supply chain that fails can have a big impact, possibly causing stockouts or production
delays.
iii. Risks of Disruption
JIT is extremely susceptible to supply chain interruptions. The entire manufacturing process
may be adversely impacted if a key supplier encounters challenges with production,
shipping, or other delays. JIT operations may potentially be affected by unanticipated
circumstances, political unrest, or natural calamities.
iv. Increased Dependence on Information Systems
The JIT process depends largely on fast and accurate information exchange amongst all
stakeholders. For an implementation to be effective, reliable communication links and
information systems are essential. Businesses must maintain robust data-sharing
capabilities and make investments in dependable IT infrastructure.
v. Staff Development and Training
To manage various duties and respond to shifting production demands, JIT frequently calls
for a highly competent and multi-trained staff. To effectively support JIT implementation,
spending on training and skill-development programs for staff becomes crucial.
3.2 SEVEN TECHNOLOGY TRENDS THAT MAY HAVE THE BIGGEST IMPACT ON THE
FUTURE OF WAREHOUSE
3.2.1 Big Data and Analytics

Big data analytics is the use

of advanced analytic techniques
against very
large, diverse data sets that
include structured, semi-
structured and
unstructured data, from different
sources, and in different sizes
Big data analytics is the use
of advanced analytic techniques
against very
large, diverse data sets that
include structured, semi-
structured and
unstructured data, from different
sources, and in different sizes
Big data analytics is the use
of advanced analytic techniques
against very
large, diverse data sets that
include structured, semi-
structured and
unstructured data, from different
sources, and in different sizes
Big data analytics is the used of advanced analytic techniques against very large, diverse
data sets that include structured, semi-structured and unstructured data from different
sources, in different sizes. It can be used to mine the expanding volume of data produced in
warehouses to uncover insightful information. It is possible to estimate demand, increase
overall efficiency, and optimize warehouse procedures by analyzing data from a variety of
sources, including inventory levels, consumer behavior, and supply chain performance.
3.2.2 The Internet of Things
Internet of Things or IoT are bringing interconnectivity to another level. Warehouses can
collect and process real-time data thanks to the IoT's ability to connect equipment and
systems. IoT sensors can track shipments, check inventory levels, make energy use more
efficient, and improve safety and security. IoT enables warehouses to increase operational
effectiveness, simplify supply chain management, and make data-driven choices.
3.2.3 Mobile Technology
Mobile technology follows the user wherever they go. It is made up of mobile two-way
communication tools, computing tools, and the networking technology that links them.
Tablets, smartphones and watches currently serve as the standard for mobile technology.
3.2.4 The Tech-Savvy Workforce
A tech-savvy workforce refers to a group of employees who can quickly adapt to changing
technologies by possess a high level of technological proficiency and expertise. This is to
enabling them to effectively leverage and utilize various technologies and digital tools in their
work. A tech-savvy workforce can help your organization improve operational efficiency,
enhance customer engagement, and develop new products and services
3.2.5 Advanced Robotics
Advanced robotics refers to application of cutting-edge technology and artificial intelligence
(AI) in the field of robotics. They are capable of taking commands and reacting to them in an
intelligent way. For example, a robot that is carrying out a task of transporting material within a
warehouse and, upon facing an unexpected obstacle, takes the decision to redefine the optimal route to
complete its mission.
3.2.6 Autonomous Vehicles
Autonomous vehicles are robotic vehicles that are designed to navigate and operate within
warehouse environments without human intervention. They equipped with sensors,
cameras, and onboard computers that enable them to perceive surroundings, plan paths,
and execute tasks autonomously such as material handling, order picking, and inventory
management. They can transport goods and materials from one location to another,
eliminating the need for human workers to manually move items.
3.2.7 New Energy Sources
Electricity can be produced at Green Warehouses using renewable energy sources like
solar, wind, or hydropower. By reducing reliance on non-renewable energy sources, the
warehouse can significantly reduce its carbon footprint and help fight climate change.
3.3 ECONOMIC ORDER QUANTITY (EOQ) TABULATION
STYletto Company produced units leather shoes monthly. Each unit of the shoes require of
leather. Normally, the supplier of the company was from HML Footwear Sdn Bhd. It costing
RM per. The company incurred administration cost of RM per order and delivery cost of RM
per order. The insurance on inventory of the leathers are 5% of the purchase price.
Information on the material :

Material required to produce one 3

product
Annual demand of the product leather shoes
Cost of material / purchase price RM per
Administrative cost per order RM per order
Delivery cost per order RM per order
Storage cost of material RM per unit of
Insurance on inventory of material 5% of