Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Textbook Question
Chapter 11, Problem 11P
Your company worked on the projects shown in Table 11-2 during the last year. Analyze the different profit centers based on their gross profit margins, their return on cash invested in the projects, and their use of management’s time. One project manager can oversee three office remodel projects or one new construction project.
Table 11-2 Jobs for Problem 11
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Question 2: Walker Co. designs and builds computer servers for data centers. They use job costing to determine the cost of
the systems that they install which consist of server racks. Each system requires a different number of server racks to be installed.
Use the forecasts below to determine the total cost of each customer's system.
One manager must be hired for every twenty direct labor hours that will be spent on installations in total (round up for fractions),
and the advertising expenses are used to run local television advertisements in the hopes of enticing new business.
The cost of a typical project is shown below, along with details about several customer orders.
Direct Materials
$5,000 per server rack
Direct Labor
$60 per hour
$3,000 per person
Manager Salary
Advertising Expenses
$10,000 per month
Direct Labor Time
2 hours per server rack
Customers
Alice
Ben
Chris
Doris
Hours
Alice
Ben
Chris
Doris
Size of System in Racks
10
4
15
20
14
30
(A) What driver should Walker Co. use…
Problem 5. GAR Company has two producing departments and two service
departments. The producing departments, Assembly & Finishing receive services
from Personnel and Administration. Personnel keep all employee records and
handles payroll; Administration handles all other administrative tasks. Each service
department provides services to the other service department as well as to the two
operating departments. Data for the most recent month follow:
# of employees
10
Direct Costs
P 200,000
500,000
1,800,000
3,000,000
P5,500,000
Department
Personnel
Administration
30
Assembly
Finishing
Total
100
300
440
GAR Company allocates Administration costs based on direct costs of the
departments and Personnel costs based on the number of employees. Start with the
department that serves the most other service departments.
Required: Allocate the service costs using
a. Direct method
b. Step method
c. Algebraic method
Suppose that an accounting firm with 10 employees hires another accountant. Bydoing so, it goes from serving 30 customers each week to serving 32 customerseach week. What is the marginal product of labor for the new accountant?
Chapter 11 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 11 - How can the estimator increase the profit the...Ch. 11 - Prob. 2DQCh. 11 - What are the six ways to allocate overhead to...Ch. 11 - Why is it important for profit center managers to...Ch. 11 - Prob. 5DQCh. 11 - What are the three ways that job-based profit...Ch. 11 - Prob. 7DQCh. 11 - In Figure 2-8, why was equipment repairs and...Ch. 11 - Your company completed the site work for the South...Ch. 11 - Prob. 10P
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