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Extracredit

# Extracredit - 4-28 1(20−30 min Job costing actual normal...

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Unformatted text preview: 4-28 1. (20−30 min.) Job costing; actual, normal, and variation from normal costing. Actual direct cost rate for professional labor = \$59 per professional labor-hour Actual indirect cost rate = = \$42 per professional labor-hour = = \$55 per professional labor-hour = = \$43 per professional labor-hour Budgeted indirect cost rate Direct-Cost Rate Indirect-Cost Rate (a) (b) Actual Normal Costing Costing \$59 \$59 (Actual rate) (Actual rate) \$42 \$43 (Actual rate) (Budgeted rate) 2. (a) Actual Costing Direct Costs Indirect Costs Total Job Costs \$59 × 160 = \$ 9,440 \$42 × 160 = 6,720 \$16,160 (b) Normal Costing (c) Variation of Normal Costing \$55 (Budgeted rate) \$43 (Budgeted rate) (c) Variation of Normal Costing \$59 × 160 = \$ \$55 × 160 = \$ 8,800 9,440 \$43 × 160 = 6,880 \$43 × 160 = \$15,680 6,880 \$16,320 All three costing systems use the actual professional labor time of 160 hours. The budgeted 150 hours for the Pierre Enterprises audit job is not used in job costing. However, Chico may have used the 150 hour number in bidding for the audit. The actual costing figure of \$16,160 is less than the normal costing figure of \$16,320 because the actual indirect-cost rate (\$42) is less than the budgeted indirect-cost rate (\$43). The normal costing figure of \$16,320 is more than the variation of normal costing (based on budgeted rates for direct costs) figure of \$15,680, because the actual direct-cost rate (\$59) is more than the budgeted direct-cost rate (\$55). ...
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