Exam 4: Job Costing

An accounting firm provides tax consulting for estates and trusts.Their job costing system has a single direct cost category (professional labour)and a single indirect cost pool (research support).The indirect cost pool contains all the costs except direct personnel costs.All budgeted indirect costs are allocated to individual jobs using actual professional labour hours.Required: a.Discuss the reasons a consulting firm might use normal costing in its job system rather than actual costing. b.What might be some ways for the firm to change from a one pool allocation concept?

Fixed costs remain constant at $200,000 per month.During high-output months variable costs are $160,000, and during low-output months variable costs are $40,000.What are the respective high and low indirect cost allocation rates if professional labour-hours are 8,000 for high-output months and 2,000 for low-output months?

To allocate or spread the under/overallocated overhead between ending Inventory, Cost of Goods Sold, and the Work-in-Process control accounts is called the

For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system. A)labour time card B)job-cost record C)materials requisition record D)purchase invoice E)sales invoice F)labour time card -direct manufacturing labour

AC 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 Queen Elizabeth High School Football Team jacket job. Required: a.For AC Manufacturing, determine the annual manufacturing overhead cost-allocation rate. b.Determine the amount of manufacturing overhead costs allocated to the QE High School job. c.Determine the estimated total manufacturing costs for the QE High School job.

JamJee Enterprises uses a job costing system.Record the following transactions in JamJee Enterprise's general journal for the current month: a.Purchased raw materials on account, $49,000. b.Requisitioned $25,200 of direct materials and $3,400 of indirect materials for use in production. c.Factory payroll incurred, $54,000; 70% direct labour, 30% indirect labour. d.Recorded depreciation expense factory equipment $9,200, and other manufacturing overhead of $26,870 (credit accounts payable). e.Allocated manufacturing overhead costs based on 120% of direct labour cost. f.Cost of completed production for the current month, $95,800. g.Cost of finished goods sold, $79,000; selling price, $115,000 (all sales on account).

Direct costs are traced the same way for actual costing and normal costing.

Answer the following question(s)using the information below.Cloudy Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect cost allocation rate of $21 per direct labour hour.The following data are obtained from the accounting records for June in the current year: -The amount of manufacturing overhead allocated to all jobs during June totals

In normal costing the manufacturing overhead control and manufacturing overhead allocated accounts in the general ledger respectively, refer to

Instead of proration, a company could choose to simply write-off the balance of any underallocated overhead to cost of goods sold providing the amount is immaterial.

A company currently has 30 full-time employees.Actual time for each employee was as follows: Consumer demand for the company's services is at 100 percent of time available.Each employee receives a salary of $75,000 per year.What is the total actual indirect cost allocation rate if management believes that clients should be charged for the employees' benefits?

Langley 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.

The balance in the manufacturing overhead allocated account, is carried over to the balance sheet for the subsequent year, to properly track all costs for job costing.

For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system. A)labour time card B)job-cost record C)materials requisition record D)purchase invoice E)sales invoice F)labour time card -direct materials purchased

Which of the following is part of the approach to computing the budgeted indirect cost allocation rate?

Using normal costing the amount of supervisory salaries to allocate is determined by calculating

Raw materials that can be traced to a cost object are an example of an indirect cost.

The difference between the actual costing and normal costing methods is that actual costing uses a budgeted indirect cost rate while normal costing uses an actual indirect cost rate.

The first step in job costing is to

Jordan Company has two departments, X and Y.Overhead is applied based on budgeted direct labour cost in Department X, and budgeted machine hours in Department Y.The following additional information is available. Required: a.Compute the budgeted factory indirect cost allocation rate for Department X. b.Compute the budgeted factory indirect cost allocation rate for Department Y. c.What is the total overhead cost of Job 10? d.If Job 10 consists of 50 units of product, what is the unit cost of this job?