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)

B. MARGINAL COSTING

The following results have been obtained using Microsoft EXCEL® spreadsheets:

Table 4-10 Marginal costing for the determination of the unit cost of Cameroon Tribune (income statement format) VARIABLE COSTING FOR THE DETERMINATION OF THE UNIT COST OF THE NEWSPAPER
			MONDAY1	TUESDAY 1	WEDNESDAY1	THUSRDAY1	FRIDAY1	Totals
COST
DIRECT MATERIALS
paper			1 231 650 F	985 320 F	1 231 650 F	1 231 650 F	1 477 980 F	6 158 250 F
black ink			150 000 F	140 000 F	120 000 F	140 000 F	150 000 F	700 000 F
blue ink			20 000 F	20 000 F	20 000 F	20 000 F	20 000 F	100 000 F
red ink			30 000 F	20 000 F	40 000 F	30 000 F	30 000 F	150 000 F
yellow ink			20 000 F	10 000 F	10 000 F	30 000 F	30 000 F	100 000 F
photographic sheet			500 000 F	500 000 F	500 000 F	500 000 F	500 000 F	2 500 000 F
photographic film			60 000 F	60 000 F	60 000 F	60 000 F	60 000 F	300 000 F
Sheet Developer			79 200 F	99 000 F	59 400 F	59 400 F	99 000 F	396 000 F
Film developer			9 000 F	4 500 F	13 500 F	4 500 F	13 500 F	45 000 F
Film fixing liquid			4 500 F	4 500 F	13 500 F	9 000 F	13 500 F	45 000 F
sheet proofreader			1 080 F	3 240 F	2 160 F	2 160 F	2 160 F	10 800 F
eraser			3 200 F	3 200 F	3 200 F	3 200 F	3 200 F	16 000 F
soaking solution			30 000 F	18 000 F	24 000 F	24 000 F	24 000 F	120 000 F
sheet cleaner			12 480 F	9 360 F	10 920 F	10 920 F	18 720 F	62 400 F
tracing paper			10 000 F	5 000 F	15 000 F	5 000 F	15 000 F	50 000 F
photocopy paper A4			20 000 F	15 000 F	25 000 F	15 000 F	15 000 F	90 000 F
photocopy paper A3			3 500 F	1 750 F	1 750 F	5 250 F	5 250 F	17 500 F
transparent sellotape			280 F	280 F	280 F	280 F	280 F	1 400 F
packaging sellotape			1 120 F	1 120 F	1 120 F	1 120 F	1 120 F	5 600 F
packaging string			2 700 F	2 700 F	2 700 F	2 700 F	2 700 F	13 500 F
white glue			700 F	700 F	700 F	700 F	700 F	3 500 F
industrial rag			14 000 F	14 000 F	14 000 F	14 000 F	14 000 F	70 000 F
soap paste			600 F	600 F	600 F	600 F	600 F	3 000 F
toner cartridge HP1200			120 000 F	120 000 F	180 000 F	60 000 F	240 000 F	720 000 F
toner cartridge HP5000			10 800 F	9 000 F	7 200 F	12 600 F	14 400 F	54 000 F
toner cartridge HP8500-black			1 200 F	1 200 F	1 200 F	1 200 F	1 200 F	6 000 F
toner cartridge HP8500-blue			1 200 F	1 200 F	1 200 F	1 200 F	1 200 F	6 000 F
toner cartridge HP8500-Red			1 200 F	1 200 F	1 200 F	1 200 F	1 200 F	6 000 F
toner cartridgeHP8500-yellow			1 200 F	1 200 F	1 200 F	1 200 F	1 200 F	6 000 F
drummer KitC4153A			1 200 F	1 200 F	1 200 F	1 200 F	1 200 F	6 000 F
Total cost of direct materials			2 340 810 F	2 053 270 F	2 362 680 F	2 248 080 F	2 757 110 F	11 761 950 F
Direct labour
direct labour for pre-printing			48 000 F	42 000 F	48 000 F	42 000 F	48 000 F	228 000 F
direct labour for copy			5 000 F	4 500 F	4 500 F	5 000 F	5 000 F	24 000 F
direct labour for imposition			18 000 F	15 000 F	18 000 F	15 000 F	18 000 F	84 000 F
direct labour for printing works			135 000 F	112 500 F	135 000 F	112 500 F	135 000 F	630 000 F
direct labour for edition			102 000 F	102 000 F	102 000 F	102 000 F	102 000 F	510 000 F
Total labour costs			308 000 F	276 000 F	307 500 F	276 500 F	308 000 F	1 476 000 F
Variable factory overhead costs
water bills (variable)			14 000 F	12 000 F	15 000 F	13 600 F	13 000 F	67 600 F
electricity bills (variable)			42 000 F	45 000 F	40 000 F	43 000 F	40 000 F	210 000 F
spare parts (variable)			85 000 F	100 000 F	110 000 F	60 000 F	63 000 F	418 000 F
Total Variable factory exp.			141 000 F	157 000 F	165 000 F	116 600 F	116 000 F	695 600 F
Variable cost of goods to be sold			2 789 810 F	2 486 270 F	2 835 180 F	2 641 180 F	3 181 110 F	13 933 550 F
Variable selling and admin. Costs
variable admin. Exp.			250 000 F	300 000 F	350 000 F	250 000 F	200 000 F	1 350 000 F
variable selling exp.			200 000 F	150 000 F	250 000 F	150 000 F	200 000 F	950 000 F
Total variable selling and admin. Exp.			450 000 F	450 000 F	600 000 F	400 000 F	400 000 F	2 300 000 F
Total cost of goods sold			3 239 810 F	2 936 270 F	3 435 180 F	3 041 180 F	3 581 110 F	16 233 550 F
Units produced			10 000	10 000	10 000	10 000	10 000	50 000 F
Daily unit cost			324 F	294 F	344 F	304 F	358 F	325 F

Unit cost 325 F

Source: The author

JOB COST SHEET: Marginal 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			Direct Labour
Requisition N°		Amount	Type of labour		Ticket	Hours	Amount
paper 100		6 158 250 F	Direct labour for pre-printing		1	39,5	228 000 F
black ink 101		700 000 F	Direct labour for copy		2	9,8	24 000 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				1 476 000 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					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		Spare parts	80	5 162 F	418 000 F
soaking solution 111		120 000 F
sheet cleaner 112		62 400 F	Total C/F		2 300 000 F		Total C/F			695 600 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		1 476 000 F
packaging string 118		13 500 F	Manufacturing Overheads		695 600 F
white glue 119		3 500 F	Selling and Admin. Exp.		2 300 000 F
industrial rag 120		70 000 F	Total Cost		16 233 550 F
soap paste 121		3 000 F	Unit product cost		325 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

Source: the author

Graphically, the situation can be represented as follows:

Figure 4-3 Evolution of the unit cost (variable costing)

Source: The author

Using variable costing, the mean unit cost is therefore 325F

The standard deviation is

SD=26.74F

Given all these information that can be summarised in the following table, we can now start with the analysis part of this chapter.

Table 4-11 Recap of the information

	ABSORPTION COSTING	VARIABLE COSTING
MEAN UNIT COST	474 F	325 F
STANDARD DEVIATION	33.04 F	26.74F

Source: the author