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S4 - 4.16 a b c d e f g h i j k(10 min Job order costing...

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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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4-17 (20 min.) Actual costing, normal costing, accounting for manufacturing overhead. 1. = = = 1.80 or 180% = = = 1.9 or 190% 2. Costs of Job 626 under actual and normal costing follow: Actual Normal Costing Costing Direct materials \$ 40,000 \$ 40,000 Direct manufacturing labor costs 30,000 30,000 Manufacturing overhead costs \$30,000 × 1.90; \$30,000 × 1.80 57,000 54,000 Total manufacturing costs of Job 626 \$127,000 \$124,000 3. = × = \$1,450,000 × 1.80 = \$2,610,000 = = \$2,755,000 - \$2,610,000 = \$145,000 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 overallocated overhead. 4-18 (20 -30 min.) Job costing, normal and actual costing. 1. = = = \$50 per direct labor-hour = = = \$40 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. 4- 2
2a. Laguna Model Mission Model Normal costing Direct costs Direct materials Direct labor Indirect costs Assembly support (\$50 × 960; \$50 × 1,050) Total costs \$106,760 36,950 143,710 48,000 \$191,710 \$127,550 41,320 168,870 52,500 \$221,370 2b. Actual costing Direct costs Direct materials Direct labor Indirect costs Assembly support (\$40 × 960; \$40 × 1,050) Total costs \$106,760 36,950 143,710 38,400 \$182,110 \$127,550 41,320 168,870 42,000 \$210,870 3. Normal costing enables Amesbury 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 960 direct labor-hours are known for the Laguna Model (June 2011), Amesbury can compute the \$191,710 cost figure using normal costing. Amesbury 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, Amesbury has to wait until the December 2011 year-end to compute the \$182,110 cost of the Laguna Model using actual costing. Although not required, the following overview diagram summarizes Amesbury Construction’s job-costing system. 4- 3

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4-19 (10 min.) Budgeted manufacturing overhead rate, allocated manufacturing overhead. 1. Budgeted manufacturing overhead rate = = = \$24 per machine-hour 2. Manufacturing overhead allocated = Actual machine-hours × Budgeted manufacturing overhead rate = 170,000 × \$24 = \$4,080,000 3. Since manufacturing overhead allocated is greater than the actual manufacturing overhead costs, Gammaro overallocated manufacturing overhead: Manufacturing overhead allocated \$4,080,000 Actual manufacturing overhead costs 4,050,000 Overallocated manufacturing overhead \$ 30,000 4- 4
4-20 (20-30 min.) Job costing, accounting for manufacturing overhead, budgeted rates.

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S4 - 4.16 a b c d e f g h i j k(10 min Job order costing...

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