Cost Analysis

Corkstreet Tailoring:
Executive Tailor
Owner: No. of Employees:
JASEL P. CABILAO SIX (6) EMPLOYEES
Year Established: Products and services
2014 Offered:
Address: • Uniforms
M. Calo street, butuan city • Alterations
Nature of the Business:
TAILORING
 ITEM PRICE

Blouse – Type B ₱450.00

Slacks ₱500.00

Set of Type B uniform ₱1000.00

Corkstreet Price Rates

 Direct Materials
BLOUSE
Quantity Price per unit Cost
Direct Materials
Fabrics 1.25 meters ₱110 per meter ₱137.50
Buttons 4 pieces ₱2.88 per piece 11.52
Total Direct Material cost for ₱149.02
blouse
SLACKS
Fabrics 1.25 meters ₱110 per meter ₱137.50
Zipper 1 piece ₱25 each 25.00
Hook and Eye 1 pair ₱2 per pair 2.00
Total Direct Material cost for ₱164.50
slack
TOTAL DIRECT MATERIAL COST FOR TYPE - B ₱313.52
(blouse and slack)
 Direct Labor
Quantity Price per unit Cost
Direct Labor
Cutter 1 set ₱125 per set ₱125.00
Pattern Maker 1 set ₱180 per set 180.00
Tailor 1 set ₱175 per set 175.00
Total Direct Labor ₱480.00
 Manufacturing Overhead
Cost
Indirect Materials
Thread ₱ 250.00/month
Needles ₱ 100.00/month
Total Indirect Materials ₱ 350.00/month
Indirect Labor
Clerk ₱ 6000.00/month
Total Indirect Labor ₱ 6000.00/month
Depreciation-Sewing Machine ₱ 47.22*/month
Electricity Bill ₱ 4,000.00/month
Rent Expense ₱ 9,000.00/month
*[(15000-6500)/15
Total MOH Cost yrs.]/12 mos.= ₱47.22 ₱ 19,397.22/month
 Nonmanufacturing Cost

Cost
Nonmanufacturing Cost
Water Bill ₱ 300.00
Salary- Bookkeeper ₱ 10,000.00
Total Nonmanufacturing Cost ₱10,300.00
Material Requisition
Corkstreet Tailoring
Materials Requisition Form
Requisition #: 003
002
001
Job # to be Charged: #190317
#190316
#190315
Date: May 12, 2019
Customer: M.
T. Cape
Durano
R.Calo
Quantity Description Cost Per Unit Total Cost
Quantity Description Cost Per Unit Total Cost
1.25 meters
Quantity Fabric – dark blue
Description ₱ 110.00/meter
Cost Per Unit ₱ 137.50
Total Cost
1.25 meters Fabric – dark blue ₱ 110.00/meter ₱ 137.50
1.25
1.25 meters
meters Fabric
Fabric –– white
white 110/meter
110/meter
₱25.00 137.50
₱ 137.50
1 pc.
1 pc. Zipper
Zipper each
25.00 each 25.00
25.00
4 pcs.
1 pair
pair Buttons
Hook and
and Eye
Eye 2.88/pcs.
2.00/ pair 11.52
2.00
1 Hook 2.00/ pair 2.00
1
2 spool
1 spools
spool Thread
Thread
Thread 8.33/spool
8.33/spool
8.33/spool 8.33
8.33
16.66
Total
4 pcs.Cost Buttons 2.88/pcs. ₱157.35
₱172.83
11.52
Time Ticket
Time Ticket for Cutting Department
Corkstreet Tailoring
Time Ticket
Date: May 12, 2019 Ticket
Ticket #:
#: 003
002
004
Employee Name: Employee 1
Department: Cutting
Job # to be Charged: #190315
#190316
#190317

Start Stop Hours Hourly Rate Total Cost

Start
8:15 AM Stop
8:35 AM Hours
0.3333 hours Hourly Rate
P 62.50 Total Cost
P 20.83
9:15
8:40 AM 9:55
9:00 AM .6667
.3333 hours P 62.50 P 41.67
20.83
Time Ticket
Time Ticket for Sewing Department
Corkstreet Tailoring
Time Ticket
Date: May 12, 2019 Ticket #: 005
007
006
Employee Name: Employee 2
Department: Cutting
Sewing
Job # to be Charged: #190317
#190315
#190316

Start Stop Hours Hourly Rate Total Cost

8:40
1:00 AM
10:00 PM
AM 9:40
3:00 AM
11:00 PM
AM 21 hours
hour P 87.50 PP175.00
87.50
Manufacturing Overhead – Computation
Manufacturing
Predetermined Overhead
Overhead Application
Rate Calculation
𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑡𝑜𝑡𝑎𝑙 𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑖𝑛𝑔 𝑜𝑣𝑒𝑟ℎ𝑒𝑎𝑑 𝑐𝑜𝑠𝑡
Overhead applied to= 𝑂𝑣𝑒𝑟ℎ𝑒𝑎𝑑
𝑃𝑟𝑒𝑑𝑒𝑡𝑒𝑟𝑚𝑖𝑛𝑒𝑑 Predetermined
𝑅𝑎𝑡𝑒 = x Amount of allocation base
𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑡𝑜𝑡𝑎𝑙 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑎𝑙𝑙𝑜𝑐𝑎𝑡𝑖𝑜𝑛 𝑏𝑎𝑠𝑒
a particular job overhead rate incurred by the job

Job Predetermined OHR 𝑃 19,397.22(12

Allocation base 𝑚𝑜𝑠. )OH applied
𝑃𝑟𝑒𝑑𝑒𝑡𝑒𝑟𝑚𝑖𝑛𝑒𝑑 𝑂𝑣𝑒𝑟ℎ𝑒𝑎𝑑 𝑅𝑎𝑡𝑒 = = 𝑃 121.23/𝑀𝐻
incurred
1920 ℎ𝑜𝑢𝑟𝑠
190315 121.23/MH 1 hour P 121.23
190316 121.23/MH 1 hour P 121.23
190317 121.23/MH 2 hours P 242.46
JOB COST SHEET
COMPARISON – Job Order Costing System Vs. Actual Selling Price Applied

ITEM Job Order Costing Actual Selling

Price Applied

Blouse – Type B ₱386.91 ₱450.00

Slacks ₱402.39 ₱500.00
Set of Type B uniform ₱789.31 ₱1000.00
 Corkstreet Tailoring
INCOME STATEMENT
For the month of May
Sales Sales P 300,000.00 P 300,000.00
Cost of Goods Sold P 237,793.00**
Cost of GoodsCost
Soldof Goods Manufactured P 237,793.00**
Gross Margin P 62,207.00
Direct Materials [P 330.18(15)]20 P 99,054.00
Gross Expenses:
Selling and Administrative Margin P 62,207.00
days
Salaries Expense P 10,000.00
Selling and Administrative
Direct Labor Expenses: [P 216.67(15)]20 P 65,001.00
Water Bill P 300.00 days
Salaries Expense
Manufacturing Overhead P 10,000.00
[P 242.46(15)]20 P 72,738.00
Net Operating Income P 51907.00
days
Water Bill Cost of Goods Manufactured P 300.00
P 236,793.00

Net Operating Income P 51907.00

Cost of Goods Sold
Cost of Goods Manufactured P 236,793.00

Add: Underapplied P 1000.00

Adjusted Cost of Goods Sold P 237,793.00**
 For a tailoring business, like Corkstreet Tailoring,
where the services and products offered depends on
what the customers want and their specific orders, a
costing method that would best cater the breakdown
of each costs for a certain job is needed. In this case,
Job Order Costing Method is the most applicable
costing method to be applied. It is effective in
determining the cost of manufacturing a product
which has specific components.