CostaccountingCh4-28

# CostaccountingCh4-28 - 4-1 CHAPTER 4 JOB COSTING 4-26(20-30...

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Unformatted text preview: 4-1 CHAPTER 4 JOB COSTING 4-26(20-30 min.) Job costing; actual, normal, and variation of normal costing.1. Actual direct cost rate for professional labor = \$58 per professional labor-hour Actual indirect cost rate = \$744,00015,500 hours= \$48 per professional labor-hour Budgeted direct cost ratefor professional labor= \$960,00016,000 hours= \$60 per professional labor-hour Budgeted indirect cost rate = \$720,00016,000 hours= \$45 per professional labor-hour (a) Actual Costing (b) Normal Costing (c) Variation of Normal Costing Direct-Cost Rate \$58 (Actual rate) \$58 (Actual rate) \$60 (Budgeted rate) Indirect-Cost Rate \$48 (Actual rate) \$45 (Budgeted rate) \$45 (Budgeted rate) 2. (a) Actual Costing (b) Normal Costing (c) Variation of Normal Costing Direct Costs Indirect Costs Total Job Costs \$58 ×120 = \$ 6,960 48 ×120 = 5,760\$12,720\$58 ×120 = \$ 6,960 45 ×120 = 5,400\$12,360\$60 ×120 = \$ 7,200 45 ×120 = 5,400\$12,600All three costing systems use the actual professional labor time of 120 hours. The budgeted 110 hours for the Montreal Expos audit job is not used in job costing. However, Chirac may have used the 110 hour number in bidding for the audit. The actual costing figure of \$12,720 exceeds the normal costing figure of \$12,360, because the actual indirect-cost rate (\$48) exceeds the budgeted indirect-cost rate (\$45). The normal costing figure of \$12,360 is less than the variation of normal costing (based on budgeted rates for direct costs) figure of \$12,600, because the actual direct-cost rate (\$58) is less than the budgeted direct-cost rate (\$60). Although not required, the following overview diagram summarizes Chirac’s job-costing system. 4-2 4-28 (20-30 min) Job costing; accounting for manufacturing overhead, budgeted rates.1. An overview of the job-costing system is: AuditSupportProfessionalLabor-HoursIndirect CostsDirect CostsI NDI RECTC O S TP O O LC O S TALLOCATI ONBASEC OS T OB J E C T :J O B F O RAUDI TI NGMONT REALE X P O SDI RECTC O S TProfessionalLabor4-3 COST OBJECT:PRODUCTCOSTALLOCATIONBASEDIRECTCOST}}Machining DepartmentManufacturing OverheadMachine-Hoursin Machining Dept.DirectMaterialsINDIRECTCOSTPOOL}DirectManufacturingLaborIndirect CostsDirect Costs}Finishing DepartmentManufacturing OverheadDirect ManufacturingLabor Costsin Finishing Dept.2. Budgeted manufacturing overhead divided by allocation base: a. Machining Department: \$10,000,000200,000= \$50 per machine-hour b. Finishing Department: \$8,000,000\$4,000,000= 200% of direct manufacturing labor costs 3. Machining overhead, \$50 ×130 hours \$6,500 Finishing overhead, 200% of \$1,250...
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## This note was uploaded on 06/23/2011 for the course BUSSINES 2B taught by Professor Hayle during the Spring '11 term at El Camino.

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CostaccountingCh4-28 - 4-1 CHAPTER 4 JOB COSTING 4-26(20-30...

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