General

 Requirements:  
 
Presentation  Date:  June  28-­‐29,  2018  
 
Groups  may  opt  to  conduct  product  cost  analysis  of  a  manufacturing  firm  OR  answer  a  case  
study.  
 
The  results  will  be  presented  to  class  at  the  end  of  week  6.  No  term  paper  need,  submitting  
softcopy  of  the  presentation  will  suffice.    
 
The  group  will  be  given  10  minutes  to  present  their  report.  5  minutes  will  be  allotted  for  
question  and  answer.  Assessment  of  the  group  report  and  presentation  will  follow  the  
rubric  indicated  in  the  course  syllabus.    
 
 
Guidelines  for  Product  Cost  Analysis  Report  
 
Product  cost  analysis  of  Manufacturing  Firm  shall  cover  the  following:  
1. Company  profile  
a. Company  history  
b. Nature  of  business  
c. Major  products  and  services  
2. Documentation  of  cost  accounting  system    
a. Current  cost  accumulation  system  used  (job  order,  process,  ABC)  
b. Current  valuation  method  used  (actual,  normal,  standard)  
c. How  does  the  company  apply  production  costs  to  its  product  (prime,  direct,  
absorption)  
d. Current  material  inventory  system  and  costing  method?  (period  or  
perpetual,  FIFO  or  average)  
e. How  does  the  company  plan  for  material  requirements?    
f. What  material  inventory  controls  do  they  implement?    
g. How  does  company  record/  treats  its  scrap,  spoilage  and  defective  products  
h. What  timekeeping  procedures  do  the  company  employ  to  record  labor  
costs?  
i. How  do  the  company  allocate  payroll  costs?  
j. How  do  the  company  treat  idle  or  overtime?  
k. How  is  overhead  applied  to  production?    
l. What  do  the  company  do  to  dispose  over-­‐underapplied  overhead?  
3. Breakdown  and  analysis  of  product  cost    
a. From  all  the  products  of  the  company,  select  one  product  to  analyze  
b. Obtain  production  volume  as  well  as  statement  of  cost  of  goods  
manufactured  and  sold  for  the  last  3  years    
c. Compute  for  estimated  gross  margin  %  based  on  the  income  statement  for  
the  past  3  years  
d. Is  product  cost  composed  of  direct  materials,  direct  labor  and  overhead?  
e. Are  these  cost  considered  fixed,  variable  or  semi-­‐variable?  Compare  changes  
in  costs  with  changes  in  production  volume  using  cost  behavior  patter  
graphs.  
 f.
What  are  direct  and  indirect  costs  of  the  selected  product?  How  does  the  
company  allocate  the  indirect  cost?    
g. Develop  a  flow  of  product  costs  from  applicable  inventory  accounts  based  on  
the  statement  of  Cost  of  goods  manufactured  and  sold  
4. Conclusion  and  Recommendation  
a. Compare  the  actual  implementation  of  cost  system  with  the  concept  learned  
in  class  
b. Is  the  company  using  an  appropriate  cost  system?  If  not,  what  would  be  the  
appropriate  cost  system?  Job  order,  process,  ABC?  
c. Can  the  company  adopt  ABC  or  JIT?  Explain.    
d. What  non-­‐value  adding  costs  can  the  company  eliminate/  reduce?  How  can  
they  eliminate/  reduce  this  cost?  
e. What  other  products  can  the  company  produced  given  its  current  resources.