job order costing

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Greeting Inc. has operated for many years as a nationally recoginzed retailer of greeting cards and small gift items. It has 1500 stores throughout the united States located in high-traffic malls. as the stock price of many other companies soared, Greeting's stock price remained flat. as a result of a heated 2013 shareholders'meeting , the president of Greetings, Robert Burns, came under pressure from shareholders to grow Greeting's stock value. As a consequence of this pressure, in 2014 Mr. Burns called for a formal analysis of the company's options with regard to business opportunities. location was the first issue considered in the analysis. Greetings stores are located in high-traffic malls where rental costs are high. the additional rental cost was justified, however, by the revenue that resulted from these highly visible locations. In recent years though, the intense competition from other stores in the mall selling similar merchandise has become a disadvantage of the mall locations.
Mr. Burns felt that to increase revenue in the mall locations, Greetings would need to attract new customers and sell more goods repeat customers. In order to do this, the company would need to add a new product line. However , to keep costs down, the product line should be one that would not require much additional store space. In order to improve earnings, rather than just increase revenues, Greetings would have to carefully manage the costs of this new product line.
After careful consideration of many possible products, the company’s management found a product that seemed to be a very good strategic fit its existing products: highquality unframed and framed prints. The critical element of this plan was that customers would pick out prints by viewing them on widescreen computer monitors in each store. Orders would be processed and shipped from central location. Thus, store size would not have to increase at all. To offer these products, Greetings established a new

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