Exam 4: Job Costing

Landscape Architects provides landscape consulting services to clients that range from small businesses to large corporations. The budgeted rate charged to customers for consulting per hour is $100. The budgeted overhead for customer-support costs per hour is $45 and the budgeted other direct-cost pool rate is $25 per hour. The budgeted hourly rates charged to jobs are $30 for the architect and $15 for the assistants. Jobs #200 and #201 for Sheridan College incurred 90 and 240 hours-respectively. Each job included one licensed architect and two assistants. The architect worked 12 hours on Job #200 and 60 hours on Job #201. Required: a. Identify the cost objects. b. Determine the costs of each job using budgeted overhead rates.

Which of the following statements about normal costing is true?

Fox Manufacturing is a small textile manufacturer using machine-hours as 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.

Use the information below to answer the following question(s). Jim's Computer Products manufactures keyboards for computers. In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively. For Job 501, the actual costs incurred in the two departments were as follows: Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production. -What is the budgeted indirect cost allocation rate for Department 2?

The actual costs of all individual overhead categories are recorded in the Manufacturing Overhead Control account as credit entries.

Use the information below to answer the following question(s). World Engines Ltd. manufactures custom engines for use in the lawn and garden equipment industry. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 787 are as follows: -What is the total manufacturing cost of Job 787 using actual costing?

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

Beacon Company does residential real estate appraisals. There are 40 professionals on its staff. Each professional is allotted the following number of hours per year: The company receives more jobs than it can handle and therefore rejects most out of town work. The budgeted salary for each professional is $44,000 per year with fringe benefits of $11,000. During the previous year, the actual salaries were $46,500, plus fringe benefits of $11,500. Required: a. What was the total budgeted direct cost rate if the company believes that clients should be charged directly for its employees' salaries and benefits? b. What was the budgeted direct cost rate if the company wants to charge clients for employee vacation, sick leave, and professional development as an indirect cost?

A materials requisition record and a labour time record are examples of which of the following?

Which of the following would most likely be a direct cost in a manufacturing company?

Larry's Appliance Shop operates retail stores that sell appliances. The cost objects are the individual sales of a given type of appliance and sales support. For refrigerators in July, the following costs were recorded: Required: a. Which of the costs will be subject to direct cost tracing? b. What is the total cost for refrigerators? c. What is the total cost of the Sales Support for refrigerators?

Budgeted fixed indirect costs remain constant at $150,000 per month. During high-output months variable indirect costs are budgeted at $120,000, and during low-output months budgeted variable costs are $60,000. What are the respective high and low indirect cost rates if budgeted professional labour-hours are 6,000 for high-output months and 2,000 for low-output months?

A Hospital uses a job cost system for all surgery patients. In February, the pre-operating room (PRE-OP) and operating room (OR) had budgeted allocation bases of 1,000 nursing hours and 500 nursing hours, respectively, and budgeted nursing overhead charges were $28,000 and $22,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $200,000 and 2,500 nursing hours for the month. PRE-OP, OR and the hospital floor have separate indirect cost pools. The hospital uses a budgeted overhead rate for applying overhead to patient stays. For patient Jones, actual hours incurred were six and eight hours, respectively, in the PRE-OP and OR rooms. He was in the hospital for 5 days (120 hours). Other costs related to Jones were: Required: Determine the budgeted overhead rate for the hospital floor for surgery.

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

A job cost record (or job cost sheet) is a document where the costs are recorded and accumulated.

Cost assignment includes cost allocation for indirect costs and direct costs.

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).

A company may choose to use budgeted rates to allocate direct labour accounts if direct labour costs are difficult to trace to jobs as they are completed.

The objective of allocating indirect costs is to measure the underlying usage of indirect resources by jobs.

Use the information below to answer the following question(s). World Engines Ltd. manufactures custom engines for use in the lawn and garden equipment industry. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 787 are as follows: -What is the total manufacturing cost of Job 787 using normal costing?