Custom Fabric Venturesis 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 ofCustom Fabric Ventureshas just received the following order: Custom Fabric Ventures Customer Order Form Customer:Katie'sBoutique Order Date: 10/2 Order Due Date: 10/15 Description:ModelNumber:QuantityUnit Sales PriceTotal Black & White HandbagBW149237$75$525 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 orderandreplenish 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 inmultiples 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 stockafterKatie'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 relevant management and accounting issues and record the transactions related to this job in the company's accounting records. The following step-by-step requirements will guide you through the entire job costing process.The documents you will encounter in this case normally interface with each other electronically in order to transfer data in real-time, eliminate tedious calculations, and prevent errors.However, the underlying process is the same regardless of whether the company uses electronic or manual documents.You'll be transferring data, as needed, in order to learn the underlying process.
Req. 1:Before the year began, Custom Fabric Ventures estimated the following costs for the year:
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