GeorgetteHodsonACG 3073-2week2.docx

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Running head: ACCOUNTING FOR MANAGERS 1 Accounting for Managers WEEK 2 Georgette Hodson Everest University
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ACCOUNTING FOR MANAGERS 2 Accounting for Managers Week 2 There are two components to this week's homework. Process costing calls upon an accountant to assign costs to products as they pass through departments (each department is allocated a share of the cost). Process costing consists of four steps: (i) analyzing the physical flow of units and their associated costs; (ii) calculating equivalent units; (iii) calculating cost per equivalent unit; and (iv) allocating costs to the finished units. In this assignment you will demonstrate your knowledge of the three different types of costing systems and how they are used. In ACCT2: On pages 64-65, complete Exercises 9-14. On pages 72-73, complete Case 44. Next, you will demonstrate your understanding of the various costing methods that can be used by an organization. You will also contrast the benefits and limitations of each. In ACCT2: On page 88, complete Problem 14. On page 91, complete Case 22. Job vs. Process Costing LO1 9. Product (service) costing systems are customized to provide accurate and timely cost data. A company should select a costing system that is appropriate for its production process. The following is a list of different organizations and selected products or services they provide. Indicate whether each of the preceding organizations would most likely choose job costing or process costing. a. Physical therapy clinic (mobility therapy) job costing
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ACCOUNTING FOR MANAGERS 3 b. Graphic design studio (logo design) job costing c. Auto repair shop (miscellaneous auto repairs) job costing d. Local bakery (wheat bread) process costing. e. Dairy (whole milk) process costing. f. Oil refinery (motor oil) process costing. g. Construction contractor (custom-built homes) job costing 10. Love's Pottery Barn had the following costs for June: Direct labor $400 Manufacturing Overhead 375 Beginning work in process 0 Ending work in process 0 Costs of goods manufactured 1,050 Beginning finished goods 2,450 Ending finished goods 3,400 Question: How much direct material costs were incurred during June? Cost of goods manufactured 1,050 Minus direct labor (400) Minus manufacturing overhead (375) Equals direct material costs $275 11.
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