Question

You are starting a company that is going to manufacture Shaving products. Your companies three main material components include the Razor handle, the razor blades and shaving cream.

• Make the standard cost for one unit of your product. Include the bill of materials
• Create an Operations Flow Document. This can be done as a written description. Indicate if you are using a job order, process or hybrid costing. Estimate the amount of time each unit will remain in each department.  
• Create a Overhead Budget for your company. Make a monthly factory rent expense; between $5,000 - $10,000 per month. The overhead amounts should be detailed by expense type.
• Estimate the number of units that you expect to produce and calculate the predetermined overhead rate for use in the standard cost.

Answer 1

THIS WHOLE ANSWER'S IS FULL OF ASSUMPTIONS

STANDARD COST CARD

Selling Price @20/pc

Razor Handle @1.5/pc

Razor Blade @2/pc

Shaving Cream @5/pc

Direct Labour @0.5/pc

Contribution @11/pc

Operatioal Flow Document

After creating a market research estimate and forecast the sales demand.According to demand prepare a budget with optimum production.As we only assemble manufactured goods give quotation to the suppliers for materials and statisfy the demands need.After production work move to the sales department and to the respective customer

Costing

A Hybrid costing is much suitable for the firm as the production could be done batch while material could be as per job costing

Overhead Budget

Rents and rates $60000/year

Electricity $30000/year

Depreciation $10000/year

S&D Expense 1/unit

As the production is for single unit we could directly absorb to unit by planning a effective profit and revenue which could be earned

ESTIMATED UNIT 50,000

OAR= 1000000/500000=2 per unit

Selling Price 20/unit $1,000,000

Variable Cost 10/unit ($500,000)

Fixed Cost (100,000)

Profit $400,000