EAC694 Advanced Report Writing

Bob Morden, Treasure Trophy Company's new general manager, was about to set the selling prices for an order from the Royal Golf Club. The club had requested quotes before deciding on their purchase. Morden wondered what his own company's (i.e., the manufacturer's) costs were for filling the order so that he could provide a competitive quote on the order. 

Treasure Trophy Company (Treasure) manufactured trophies for all kinds of sports, businesses and celebratory events. All trophies were made to order, sometimes for retail stores and sometimes directly for the organizers of the events. Several trophy manufacturers competed for this business, and since their capabilities were about the same, prices were set with reference to a fairly narrow competitive range. Treasure used a job order system of cost accumulation. The company did not use a standard cost system since its products were all customized. 

The manufacturing process was divided into three departments: forming, finishing and assembly. The raw materials were machined to make up finished parts in the forming department. In the finishing department, these parts were sanded, polished, lacquered or subjected to whatever other finishing operations the job required. Any engraving was done in the finishing department. The assembly operation involved joining parts together to form the trophy, which most commonly meant gluing. Decals might also be glued onto trophies in the finishing department, particularly in the case of less expensive trophies that had little or no engraving. The company's budgeted costs for the year 2014 are shown in Exhibit 1.