2-05 Product Costing.docx

# Suppose a job required parts costing 200 and

This preview shows pages 1–3. Sign up to view the full content.

b. Suppose a job required parts costing \$200 and technician time costing \$100. What would be the total cost of the job? \$500,000/800,000=0.625 \$200+\$100+ (\$100*0.625)= \$362.5 2. Cost of Jobs Red Company is a steel fabricator, and job 325 consists of producing 500 steel supports for Green Construction Company. Overhead is applied on the basis of direct labor hours, using a predetermined overhead rate of \$25 per hour. Direct costs associated with Job 325 are: direct materials, \$10,000; direct labor, 250 hours at \$16 per hour. Required Calculate the cost of Job 325. Job #325 Direct Labor Cost: 250* \$16=\$4,000 Overhead: 250*\$25=6,250 Predetermined overhead rate= 6250/4000=1.56 Cost of Job #325 \$10,000+ \$4000+\$6250=\$20,250

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

View Full Document
3. Service Company Use of Predetermined Overhead Rate Yellow and Purple Legal Services employs five full-time attorneys and nine paraprofessionals. Budgeted salaries are \$100,000 for each attorney and \$50,000 for each paraprofessional. Budgeted indirect costs (e.g., rent, secretarial support, copying, etc.) are \$210,000. The company traces the cost of attorney and paraprofessional time to each client and uses the total to assign indirect costs. Required What amount of indirect costs would be assigned if services to a client required \$25,000 of attorney cost and \$20,000 of paraprofessional cost? \$25,000+20,000=45,000 \$45,000/150,000=30% \$210,000*30%=\$63,000 4. Job Costing (Service) Orange & Associates is an accounting firm that provides audit, tax, and accounting services to medium-size retail companies. It employs 50 professionals (10 partners and 40 associates) who work directly with clients. The average expected total compensation per professional for the year is
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern