sol04 - CHAPTER 4 JOB COSTING 4.16 a. b. c. d. e. f. g. h....

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CHAPTER 4 JOB COSTING 4.16 (10 min) 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 4-1
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4-20 (20-30 min.) Job costing, accounting for manufacturing overhead, budgeted rates. 1. An overview of the product costing system is COST OBJECT: PRODUCT COST ALLOCATION BASE DIRECT } } Machining Department Manufacturing Overhead Machine-Hours D irect Materials INDIRECT POOL } D Manufacturing Labor Indirect Costs D irect Costs } Assembly Department D irect Manuf. Labor Cost Budgeted manufacturing overhead divided by allocation base: Machining overhead: 000 , 50 000 , 800 , 1 $ = $36 per machine-hour Assembly overhead: 000 , 000 , 2 $ 000 , 600 , 3 $ = 180% of direct manuf. labor costs 2. Machining department, 2,000 hours × $36 $72,000 Assembly department, 180% × $15,000 27,000 Total manufacturing overhead allocated to Job 494 $99,000 Job cost = $45,000 + $70,000 +$14,000 + $15,000 + $99,000 = $243,000 3. Machining Assembly Actual manufacturing overhead $2,100,000 $ 3,700,000 Manufacturing overhead allocated, $36 × 55,000 machine-hours 1,980,000 180% × $2,200,000 3,960,000 Underallocated (Overallocated) $ 120,000 $ (260,000 ) 4-2
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4-21 (20 - 25 min.) Job costing, consulting firm. 1. Budgeted indirect-cost rate for client support can be calculated as follows: Budgeted indirect-cost rate = $13,600,000 ÷ $5,312,500 = 256% of professional labor costs 2. At the budgeted revenues of $21,250,000 Taylor’s operating income of $2,337,500 equals 11% of revenues. Markup rate = $21,250,000 ÷ $5,312,500 = 400% of direct professional labor costs 4-3 COST ALLOCATION BASE } } } COST OBJECT: JOB FOR CONSULTING CLIENT DIRECT COSTS } Indirect Costs Direct Costs INDIRECT COST POOL Professional Labor Costs Professional Labor Costs Professional Labor Client Support
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3. Budgeted costs Direct costs: Director, $198 × 4 $ 792 Partner, $101 × 17 1,717 Associate, $49 × 42 2,058 Assistant, $36 × 153 5,508 $10,075 Indirect costs: Consulting support, 256% × $10,075 25,792 Total costs $35,867 As calculated in requirement 2, the bid price to earn an 11% income-to-revenue margin is 400% of direct professional costs. Therefore, Taylor should bid 4 × $10,075 = $40,300 for the Red Rooster job.
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This note was uploaded on 09/13/2011 for the course ACCT 305 taught by Professor Franz during the Spring '07 term at S.F. State.

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sol04 - CHAPTER 4 JOB COSTING 4.16 a. b. c. d. e. f. g. h....

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