04-assigned - 4-1 CHAPTER 4 JOB COSTI&G4-17 (20...

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Unformatted text preview: 4-1 CHAPTER 4 JOB COSTI&G4-17 (20 min.)Actual costing, normal costing, accounting for manufacturing overhead. 1. rateoverheadingmanufacturdBudgete= costslabor ingmanufacturdirect BudgetedcostsoverheadingmanufacturBudgeted= 000,000,1$000,750,1$= 1.75 or 175% rateoverheadingmanufacturctualA= costslabor ingmanufacturdirect ActualcostsoverheadingmanufacturActual= 000,980$000,862,1$= 1.9 or 190% 2. Costs of Job 626 under actual and normal costing follow: Actual &ormal Costing CostingDirect materials $ 40,000 $ 40,000 Direct manufacturing labor costs 30,000 30,000 Manufacturing overhead costs $30,000 ×1.90; $30,000 ×1.75 57,00052,500Total manufacturing costs of Job 626 $127,000$122,5004-2 3. Total manufacturing overheadallocated under normal costing= Actual manufacturinglabor costs×Budgetedoverhead rate= $980,000 ×1.75 = $1,715,000 Underallocated manufacturingoverhead= Actual manufacturingoverhead costs– Manufacturingoverhead allocated= $1,862,000 −$1,715,000 = $147,000 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. Budgeted indirect-cost rate= Budgeted indirect costsBudgeted direct labor-hours= hours160,000$8,000,000= $50 per direct labor-hour Actual indirect-cost rate= Actual indirect costsActual direct labor-hours= hours164,000$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. 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 36,276142,72645,000$187,726$127,604 41,410169,01450,500$219,5144-3 2b. Actual costing Direct costs Direct materials Direct labor Indirect costs Assembly support ($42 ×900; $42 ×1,010) Total costs $106,450 36,276142,72637,800$180,526$127,604 41,410169,01442,420$211,4343. 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, costs of the Laguna Model job as well as to bid on similar jobs later in the year....
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This note was uploaded on 04/29/2011 for the course ACCT 3001 taught by Professor Erickson during the Spring '10 term at University of Minnesota Duluth.

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04-assigned - 4-1 CHAPTER 4 JOB COSTI&G4-17 (20...

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