Week 4 - Accy211: Management Accounting II Autumn Session...

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Accy211: Management Accounting II Autumn Session 2009 Tutorial solutions: Week 4 CHAPTER 4 Questions Q4-16 Q4-18 Q4-25 Q4-28 Q4-30 4-16: Job order costing, process costing. a. Job costing l. Job costing b. Process costing m. Process costing c. Job costing n. Job costing d. Process costing o. Job costing e. Job costing p. Job costing f. Process costing q. Job costing g. Job costing r. Process costing h. Job costing (but some process costing) s. Job costing i. Process costing t. Process costing j. Process costing u. Job costing k. Job costing 4-18: Job costing, normal and actual costing. 1. = Budgeted indirect- cost rate Budgeted indirect costs Budgeted direct labor-hours = hours 160,000 $8,000,000 = $50 per direct labor-hour = Actual indirect- cost rate Actual indirect costs Actual direct labor-hours = hours 164,000 $6,888,000 = $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. Page 1 of 7
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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.
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Week 4 - Accy211: Management Accounting II Autumn Session...

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