Acct 311 Essay

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Custom Fabric Ventures is a small company that produces fabric-based wardrobe accessories (such as, handbags, scarves, and headbands) and home accessories (such as placemats, pillows, and window treatments). The company keeps a limited number of popular items in stock, but primarily produces custom orders. Customers are able to choose from a wide selection of styles, sizes, and fabrics for each type of product. Most of the company’s customers are small boutiques, home décor shops, and home-decorators who serve clientele with discerning tastes. As a result, customers expect high-quality products. The sales staff of Custom Fabric Ventures has just received the following order: ------------------------------------------------- See Excel file: Customer Order Form Due to its popularity, the Black and White Handbag (BW14293) is normally a stock item. However, the handbag is currently out of stock. Rather than producing only enough units to fill Katie’s order, management would like to produce a job (Job 114) that is large enough to fill Katie’s order and replenish stock. The fabric used for this job can be stacked four layers deep for cutting, while still maintaining the quality and precision of the cut. Therefore, the company is able to realize some economies of scale by producing the handbags in multiples of 4. Management would like to produce enough units in this job to have a minimum of 30 and a maximum of 35 handbags left in stock after Katie’s order has been filled. Your primary task is to determine the cost of producing Job 114 so that you can calculate the gross profit on the sale to Katie’s Boutique. As part of this process, you will be required to schedule production, purchase any raw materials that aren’t currently in stock, requisition materials for the job, and complete the job cost record. You will also be asked to consider

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