What Is Skate Shack?

Skate Shack is a business that manufactures skateboards and skates. Skate Shack creates these products to then be put into stores to be sold. Skate Shack operates a Job Cost Sub-System. Having a job cost sub-system is purposeful for Skate Shack as this allows them to obtain an accurate figure of costs of production, this is important for the business to ensure that the price of the skateboards and skates are competitive and generating profit. To acquire the cost of production for the skateboards and skates Skate Shack adds the costs of raw materials (e.g. wood) plus the costs of labour and factory overheads. After obtaining the cost of production for one product Shake Shack will add their mark-up of 120% and also GST to find the price of which
Skate Shack uses a time sheet to record Labour hours. The purpose of a time sheet is to record the time spent by staff at work, and the time that went into each particular job they worked on. The labour would be recorded on a time sheet by detailing the name and number of the employee; the number of hours worked and the total cost of the labour for the specific job. The sheet will also state the job number and date the labour was done. It is important that the employee’s name and number that worked on the job is recorded on the sheet so the employer knows who is owed and also who worked on which part of the production. The number of hours worked and cost of the labour is important to be recorded on the sheet to calculate the total cost of labour contributed towards the production process. The number of the ‘Wheel’z” job that was stated on the time sheets was 271. Having this job number for the 30 skateboards is important for Skate Shack to be able to allocate the costs and time spent on this particular job. To ensure validity and accuracy the time sheets are also signed by the production supervisor. This is important because it minimises risk of inaccurate costs, e.g. employees adding hours to their time sheet which means adding to the overall cost to the Labour Hours for the job. The final total hours and cost of the “Wheel’z” job 255 hours at a rate of 4.25 per hour and a total cost of $1,200. This $1,200 will be transferred to ‘Wheel’z” job cost card to add to the other overall costs of the job. The more accurate the time sheet details are contributes the success of the correct selling price of the skateboards where the price is competitive and profitable for Skate