Chat_2a - 4-18 Page 125LagunaMissionActual...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 4-18 Page 125LagunaMissionActual CostsModelModelConstruction PeriodFeb-June 2008May-Oct 2008Direct Materials$106,450 $127,604 Direct Labor$36,276 $41,410 Direct Labor-Hours900 1,010 2008 Budget Support Costs$8,000,000 2008 Budget DL Hrs160,000 2008 Actual Support Costs$6,888,000 2008 Actual DL Hrs164,000 1.)Budgeted IndirectBudgeted indirect costs$8,000,000 a.)Cost Rate =Budgeted direct labor hours160,000 $50.00 Actual IndirectActual indirect costs$6,888,000 b.)Cost Rate =Actual direct labor hours164,000 $42.00 2a.) Budgeted Rate * DLHLagunaMissionNormal CostingModelModelDirect CostsDirect Materials$106,450 $127,604 Direct Labor36,276 41,410 142,726 169,014 Indirect costsAssembly support45,000 50,500 ($50 x 900; $50 x 1,010)TOTAL COSTS$187,726 $219,514 2b.) Actual CostingActual Rate * DLHDirect CostsDirect Materials$106,450 $127,604 Direct Labor36,276 41,410 142,726 169,014 Indirect costsAssembly support37,800 42,420 ($42 x 900; $42 x 1,010)TOTAL COSTS$180,526 $211,434 These rates differ because both the numerator and the denominator in the two calculations are differentone based on budgeted numbers and the other based on actual numbers.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.Per DL HrPer DL Hr4-19 Page 126...
View Full Document

Page1 / 9

Chat_2a - 4-18 Page 125LagunaMissionActual...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online