Accumulated depreciation various liabilities 6 19 7 9

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150 (4) 90 (5) 30 Accumulated Depreciation Various Liabilities (6) 19 (7) 9 Accounts Receivable Control Revenues (10b) 400 (10b) 400
4-20 4-27 4-27 4-27 (15 min.) Job Job Job costing, costing, costing, unit unit unit cost, cost, cost, ending ending ending work work work in in in progress. progress. progress. 1. 2. 3. Finished Goods Control 570,000 Work-in-Process Control 570,000 4. Raymond Company began May 2009 with no work-in-process inventory. During May, it started and finished M1. It also started M2, which is still in work-in-process inventory at the end of May. M2’s manufacturing costs up to this point, $410,000, remain as a debit balance in the Work-in-Process Inventory account at the end of May 2009. Direct manufacturing labor rate per hour $25 Manufacturing overhead cost allocated per manufacturing labor-hour $20 Job Job Job M1 M1 M1 Job Job Job M2 M2 M2 Direct manufacturing labor costs $275,000 $200,000 Direct manufacturing labor hours ($275,000 $25; $200,000 $25) 11,000 8,000 Manufacturing overhead cost allocated (11,000 $20; 8,000 $20) $220,000 $160,000 Job Job Job Costs Costs Costs May May May 2009 2009 2009 Job Job Job M1 M1 M1 Job Job Job M2 M2 M2 Direct materials $ 75,000 $ 50,000 Direct manufacturing labor 275,000 200,000 Manufacturing overhead allocated 220,000 160,000 Total costs $570,000 $410,000 Number of pipes produced for Job M1 1,500 Cost per pipe ($570,000 1,500) $380
4-21 4-28 4-28 4-28 (20 30 min.) Job Job Job costing; costing; costing; actual, actual, actual, normal, normal, normal, and and and variation variation variation from from from normal normal normal costing. costing. costing. 1. Actual direct cost rate for professional labor = $58 per professional labor-hour Actual indirect cost rate = = $48 per professional labor-hour $744,000 15,500 hours = = $60 per professional labor-hour Budgeted direct cost rate for professional labor $960,000 16,000 hours Budgeted indirect cost rate = = $45 per professional labor-hour $720,000 16,000 hours All three costing systems use the actual professional labor time of 120 hours. The budgeted 110 hours for the Pierre Enterprises 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). (a) (a) (a) Actual Actual Actual Costing Costing Costing (b) (b) (b) Normal Normal Normal Costing Costing Costing (c) (c) (c) Variation Variation Variation of of of Normal Normal Normal Costing Costing 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) (a) (a) Actual Actual Actual Costing Costing Costing (b) (b) (b) Normal Normal Normal Costing Costing Costing (c) (c) (c) Variation Variation Variation of of of Normal Normal Normal Costing Costing 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 $12,600
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