The use of job costing as a tool for the pricing and cost control decisions in the printing industry: the case of Société de Presse et d'Editions (SOPECAM)

From the figures above, it appears that the unit cost is 474 F for the week under consideration using the absorption costing technique. This figure represents one of the mean that will be compared during the process of testing our hypotheses.

Since we are dealing with job costing, the best method of determining that unit cost is through the use of a Job cost Sheet like the following:

JOB COST SHEET: Absorption costing
Job number: 1			Start date: 01st august 2002
Department: printing			Delivery date: 05th august 2002
Item: Five-day production of CT			Units completed: 50 000
Direct Materials
Requisition N°		Amount	type of labour		ticket	Hours	Amount
paper 100		6 158 250 F	direct labour for pre-printing		1	39,5	237 000 F
black ink 101		700 000 F	direct labour for copy		2	9,8	24 500 F
blue ink 102		100 000 F	direct labour for soaking		3	14	84 000 F
red ink 103		150 000 F	direct labour for printing works		4	14	630 000 F
yellow ink 104		100 000 F	direct labour for edition		5	35	510 000 F
photographic sheet 104		2 500 000 F	Total C/F				1 485 500 F
photographic film 105		300 000 F
Sheet Developer 106		396 000 F	EXPENSES				Manufacturing Overheads
Film developer 107		45 000 F	Description		Amount		Type	Hours	Rate	Amount
Film fixing liquid 108		45 000 F	fixed admin. Exp.		2 500 000 F		water	80	845 F	67 600 F
sheet proofreader 109		10 800 F	variable admin. Exp.		1 350 000 F		electricity	80	2 625 F	210 000 F
eraser 110		16 000 F	variable selling exp.		950 000 F		depreciation	80	55 962 F	4 476 921 F
soaking solution 111		120 000 F	fixed selling exp.		500 000 F		spare parts	80	5 162 F	418 000 F
sheet cleaner 112		62 400 F	Total C/F		5 300 000 F		Total C/F			5 172 521 F
tracing paper 113		50 000 F
photocopy paper A4 114		90 000 F
photocopy paper A3 115		17 500 F	Job cost Summary
transparent sellotape 116		1 400 F	Direct materials		11 761 950 F
packaging sellotape 117		5 600 F	Direct Labour		1 485 500 F
packaging string 118		13 500 F	Manufacturing Overheads		5 172 521 F
white glue 119		3 500 F	Selling and Admin. Exp.		5 300 000 F
industrial rag 120		70 000 F	Total Cost		23 719 971 F
soap paste 121		3 000 F	Unit product cost		474 F
toner cartridge HP1200 122		720 000 F
toner cartridge HP5000 123		54 000 F
toner cartridge HP8500-black124		6 000 F
toner cartridge HP8500-blue 125		6 000 F
toner cartridge HP8500-Red 126		6 000 F
toner cartridgeHP8500-yellow 127		6 000 F
drummer KitC4153A 128		6 000 F
Total C/F		11 761 950 F

Graphically, the data on the daily unit costs could be presented as such:

Figure 1-2 Evolution of the unit cost (absorption costing)

Source: the author

We also need the standard deviation of the daily unit cost and this can be obtained from the formula:

SD=(?X_i-A₁)/N₁

X_i: daily unit cost

A₁: Mean unit cost

N₁: number of production days

Again, using the spreadsheet,

SD=

F33.03827