Exam 4: Job Costing

Fox Manufacturing is a small textile manufacturer using machine-hours for the single indirect cost allocation rate to allocate indirect manufacturing costs to the various jobs contracted during the year.The following estimates are provided for the coming year for the company and for the Maize High School Science Olympiad job. Required: a.For Fox Manufacturing, determine the annual manufacturing indirect cost allocation rate. b.Determine the amount of manufacturing overhead costs allocated to the Maize High School job. c.Determine the estimated total manufacturing costs for the Maize High School job.

XYZ Company uses a normal job costing system.The direct labour rate is $27 per hour; and, the budgeted indirect cost allocation rate is $20 and uses direct labour hours as the cost allocation base. What amount should be added to Work-in-Process control?

LaFleur Company has the following balances as of the year ended December 31, 2018. Additional information is as follows: Required: a.Compute beginning direct materials inventory. b.Compute beginning WIP inventory. c.Compute beginning finished goods inventory. d.Compute actual factory overhead incurred.

Use the information below to answer the following question(s).Because the Beckworth Company used a budgeted indirect cost allocation rate for its manufacturing operations, the amount allocated ($190,000)was different from the actual amount incurred ($175,000).These were the respective ending balances in the Manufacturing Overhead Allocated and Manufacturing Overhead control accounts.Before disposition of under/overallocated overhead, the following information was available: -What is the journal entry Beckworth Company should use to write-off the difference between allocated and actual overhead directly to cost of goods sold?

A local financial consulting firm employs 30 full-time staff.The budgeted compensation per employee is $50,000, for 2,000 hours.All direct labour costs are charged to clients.Any other costs are included in a single indirect-cost pool, allocated according to labour-hours.Actual indirect costs were $750,000.Budgeted indirect costs for the year are $525,000 and the firm expects to have 60 clients during the coming year.What is the total cost of a job which took 27 hours, using normal costing?

A machine shop has direct materials cost of $1,800,000 direct labour of $4,200,000 (direct labour rate is $50 per hour)and budgeted indirect manufacturing costs of $850,000.Management believes that indirect manufacturing costs increase with direct labour hours.What is the budgeted indirect manufacturing cost rate?

Use the information below to answer the following question(s).A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new, refined costing system include: 1.Professional partner labour.Average total annual compensation of the two partners is $100,000; and, each partner has 2,000 hours of budgeted billable time.2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each, and each assistant has 2,000 hours of budgeted billable time.3.Office staff.Average total annual compensation of the two staff members is $15,000 each, and each has 2,000 hours of budgeted billable time.The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000, and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours. -What would be the new budgeted direct cost rate if they decided to give all of the dental assistants a 10% raise?

Which of the following includes both traced direct costs and allocated indirect costs?

Indell Corporation uses a job costing system.Record the following transactions in Indell Corporation's general journal for the current month: a.Purchased raw materials on account, $24,000. b.Requisitioned $36,900 of direct materials and $7,200 of indirect materials for use in production. c.Factory payroll incurred, $68,000; 70% direct labour, 30% indirect labour. d.Recorded depreciation expense factory equipment $11,500, and other manufacturing overhead of $31,570 (credit accounts payable). e.Allocated manufacturing overhead costs based on 120% of direct labour cost. f.Cost of completed production for the current month, $103,000. g.Cost of finished goods sold, $81,000; selling price, $125,000 (all sales on account).

ZamTech Moldings allocates manufacturing overhead to jobs based on machine hours.The company has the following estimated costs for the upcoming year: The company estimates that 1,800 direct labour hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year.The predetermined indirect allocation rate per machine hour is closest to

Job-cost records for Boucher Company contained the following data: Required: a.Compute WIP inventory at June 30. b.Compute finished goods inventory at June 30. c.Compute cost of goods sold for June.

Use the information below to answer the following question(s).Because the Abernathy Company used a budgeted indirect cost allocation rate for its manufacturing operations, the amount allocated ($200,000)was different from the actual amount incurred ($225,000).These were the respective ending balances in the Manufacturing Overhead Allocated and Manufacturing Overhead control accounts.Before disposition of under/overallocated overhead, the following information was available: -What is the journal entry Abernathy Company should use to write-off the difference between allocated and actual overhead using the proration approach based on overhead allocated?

Actual costing traces direct costs to a cost object by multiplying the budgeted direct cost rate and the actual quantity.

John wants to identify the total cost for computing the corporate tax return he prepared for his client.Labour is the only direct cost at $50 per hour.Indirect costs are $60 per labour hour.What is the total direct cost, indirect cost, and job cost, respectively, if 15 hours are spent preparing the tax return?

Underallocated indirect costs cannot occur when normal costing is used.

Which method(s)for dealing with under/over allocated overhead provides the most accurate inventory and cost of goods sold account balances when the amount is material?

Actual costing allocates indirect costs based on the predetermined indirect-cost rates multiplied by the actual quantities of the cost-allocation bases.

Use the information below to answer the following question(s).A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new, refined costing system include: 1.Professional partner labour.Average total annual compensation of the two partners is $100,000; and, each partner has 2,000 hours of budgeted billable time.2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each, and each assistant has 2,000 hours of budgeted billable time.3.Office staff.Average total annual compensation of the two staff members is $15,000 each, and each has 2,000 hours of budgeted billable time.The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000, and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours. -What is the budgeted direct cost rate per hour for professional partner labour?

Provide examples of three companies that would likely use job costing, and three companies that would likely use process costing.

Maddow Manufacturing is a small textile manufacturer using machine-hours for the single indirect cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year.The following estimates are provided for the coming year for the company and for the Patterson High School Science Olympiad jacket job. Required: a.For Maddow Manufacturing, determine the annual manufacturing overhead cost-allocation rate. b.Determine the amount of manufacturing overhead costs allocated to the Patterson High School job. c.Determine the estimated total manufacturing costs for the Patterson High School job.