ACCT chapter4

Topics: Cost accounting, Variable cost, Costs Pages: 63 (4758 words) Published: September 21, 2013
CHAPTER 4
JOB COSTING

4.16 (10 min) Job order costing, process costing.

a. Job costingl.Job costing
b. Process costingm.Process costing
c. Job costingn.Job costing
d. Process costingo.Job costing
e. Job costingp.Job costing
f. Process costingq.Job costing
g. Job costingr.Process costing
h. Job costing (but some process costing)s.Job costing
i. Process costingt.Process costing
j. Process costingu.Job costing
k. Job costing

4-17(20 min.)Actual costing, normal costing, accounting for manufacturing overhead.

1.=

== 1.80 or 185%

=

== 1.9 or 190%
2.Costs of Job 626 under actual and normal costing follow:

ActualNormal
CostingCosting
Direct materials$ 40,000$ 40,000
Direct manufacturing labor costs30,00030,000
Manufacturing overhead costs
$30,000  1.90; $30,000  1.80 57,000 54,000 Total manufacturing costs of Job 626$127,000$124,000

3.=

=$1,450,000  1.80

=$2,610,000

=

=$2,755,000  $2,610,000 = $145,000

There is no under- or overallocated overhead under actual costing because overhead is allocated under actual costing by multiplying actual manufacturing labor costs and the actual manufacturing overhead rate. This, of course equals the actual manufacturing overhead costs. All actual overhead costs are allocated to products. Hence, there is no under- or overallocatead overhead.

4-18(20 -30 min.) Job costing, normal and actual costing.
1.= =
=$50 per direct labor-hour
= =
=$42 per direct labor-hour

These rates differ because both the numerator and the denominator in the two calculations are different—one based on budgeted numbers and the other based on actual numbers.

2a.
Laguna
Model
Mission
Model
Normal costing
Direct costs
Direct materials
Direct labor

Indirect costs
Assembly support ($50  900; $50  1,010)
Total costs

$106,450
36,276
142,726

45,000
$187,726

$127,604
41,410
169,014

50,500
$219,514
2b.Actual costing
Direct costs
Direct materials
Direct labor

Indirect costs
Assembly support ($42  900; $42  1,010)
Total costs

$106,450
36,276
142,726

37,800
$180,526

$127,604
41,410
169,014

42,420
$211,434

3.Normal costing enables Anderson to report a job cost as soon as the job is completed, assuming that both the direct materials and direct labor costs are known at the time of use. Once the 900 direct labor-hours are known for the Laguna Model (June 2007), Anderson can compute the $187,726 cost figure using normal costing. Anderson can use this information to manage the costs of the Laguna Model job as well as to bid on similar jobs later in the year. In contrast, Anderson has to wait until the December 2007 year-end to compute the $180,526 cost of the Laguna Model using actual costing.

Although not required, the following overview diagram summarizes Anderson Construction’s job-costing system.

4-19(10 min.)Budgeted manufacturing overhead rate, allocated manufacturing overhead.

1.Budgeted manufacturing overhead rate =

= = $20 per machine-hour

= 195,000 × $20 = $3,900,000

3.Since manufacturing overhead allocated is greater than the actual manufacturing overhead costs, Waheed overallocated manufacturing overhead:

Manufacturing overhead allocated$3,900,000
Actual manufacturing overhead costs 3,860,000
Overallocated manufacturing overhead$ 40,000

4-20(20-30 min.)Job costing, accounting for manufacturing overhead, budgeted rates.

1.An overview of the product costing system is

Budgeted manufacturing overhead divided by allocation base:

Machining overhead = $36 per machine-hour
Assembly overhead: = 180% of direct manuf. labor costs

2.Machining department, 2,000 hours  $36$72,000
Assembly department, 180%  $15,000...
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