Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Chapter 3, Problem 3.34BE
1.
To determine
To calculate: Calculate predetermined overhead rate based on direct labor hours
2.
To determine
To calculate: Calculate overhead to be allocated to each of the jobs based on the direct labor hours
3.
To determine
To calculate: Calculate total cost for job 101 and job 102
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Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow:
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Requirement
Calculate the total variable costs of producing 2, 4, and 8 units.
Begin by calculating the cumulative total time in labor-hours using the cumulative average-time learning model. (Round the cumulative average time per unit to the nearest whole number.)
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←
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Direct material cost
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Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows:
Information
State University
On-the-Go Home
Precious Pre-school
Direct Materials Cost (food)
$54,200
$34,800
$81,300
Direct Labor Cost
$43,600
$40,000
$55,900
Labor Hours
3,050
3,630
4,000
The company applies overhead at a rate of $17.50 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $396,600. The allocated overhead for the month was $146,800, of which $122,000 should be credited to accounts payable and $40,400 should be credited to Accumulated Depreciation.1. Determine the costs that should be assigned to each of the jobs.
State University
On-the-Go Home
Precious Pre-school
TOTAL
Direct Materials
Direct Labor
Actual Overhead
Total Job Cost
Manufacturing Overhead
Debit
Credit
2. Do the adjustment for…
Chapter 3 Solutions
Managerial Accounting (5th Edition)
Ch. 3 - (Learning Objective 1) For which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 3) The amount of manufacturing...Ch. 3 - (Learning Objective 4) Which of the following is...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - (Learning Objective 5) Assuming the amount of...Ch. 3 - Prob. 8QCCh. 3 - Prob. 9QCCh. 3 - Prob. 10QC
Ch. 3 - Identify product costs, period costs, and product...Ch. 3 - Decide on product costing system (Learning...Ch. 3 - Determine the flow of costs between inventory...Ch. 3 - Understanding key document terms in a job cost...Ch. 3 - Compute a professional billing rate (Learning...Ch. 3 - Prob. 3.6SECh. 3 - Continuation of S3-6: compute total allocated...Ch. 3 - Continuation of S3-7: determine over- or under...Ch. 3 - Prob. 3.9SECh. 3 - Calculate job cost and billing at appliance repair...Ch. 3 - Calculating overallocated or underallocated...Ch. 3 - Prob. 3.12SECh. 3 - Record manufacturing labor costs (Learning...Ch. 3 - Prob. 3.14SECh. 3 - Prob. 3.15SECh. 3 - Understanding key terms (Learning Objectives 1, 2,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Prob. 3.18AECh. 3 - Determine the cost of a job and use it for pricing...Ch. 3 - Compute a predetermined overhead rate and...Ch. 3 - Prob. 3.21AECh. 3 - Prob. 3.22AECh. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Job cost and bid price at a consulting firm...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Understand the flow of costs in a job cost shop...Ch. 3 - Prob. 3.33BECh. 3 - Prob. 3.34BECh. 3 - Prob. 3.35BECh. 3 - Sustainability and job costing (Learning...Ch. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Prob. 3.43BECh. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Job costing or process costing for wedding...Ch. 3 - Discussion Questions 1. Why would it be...Ch. 3 - Unwrapped or How Its Made Go to www.YouTube.com...Ch. 3 - Ethics involved with choice of cost driver...Ch. 3 - Prob. 3.61ACTCh. 3 - Issues with cost of job (Learning Objectives 2, 3,...
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- Please use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: It estimates there will be five orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forwardPlease use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Box Springs estimates there will be four orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forwardKapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows: Information State University On-the-Go Home Precious Pre-school Direct Materials Cost (food) $54,100 $35,100 $79,700 Direct Labor Cost $43,600 $41,400 $53,500 Labor Hours 3,210 3,690 4,120 The company applies overhead at a rate of $20.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $401,200. The allocated overhead for the month was $149,800, of which $129,200 should be credited to accounts payable and $41,700 should be credited to Accumulated Depreciation.arrow_forward
- Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows: Information State University On-the-Go Home Precious Pre-school Direct Materials Cost (food) $55,900 $37,200 $79,700 Direct Labor Cost $43,500 $38,800 $53,100 Labor Hours 3,360 3,550 3,810 The company applies overhead at a rate of $16.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $406,800. The actual overhead for the month was $148,400, of which $118,600 should be credited to accounts payable and $41,500 should be credited to Accumulated Depreciation.Determine the costs that should be assigned to each of the jobs. State University On-the-Go Home Precious Pre-school TOTAL Direct Materials Direct Labor Applied Overhead Total Job Cost Manufacturing Overhead Debit Creditarrow_forwardBordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for commercial buildings. For each new design, Bordner faces a 90 percent learning rate. On average, the first unit of a new design takes 600 hours. Direct labor is paid 25 per hour. Required: 1. Set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, and cumulative total time in hours. Show results by row for total production of one unit, two units, four units, eight units, and sixteen units. (Round hour answers to two significant digits.) 2. What is the total labor cost if Bordner makes the following number of units: one, four, sixteen? What is the average cost per system for the following number of systems: one, four, or sixteen? (Round your answers to the nearest dollar.) 3. Using the logarithmic function, set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, cumulative total time in hours, and the time for the last unit. Show results by row for each of units one through eight. (Round answers to two significant digits.)arrow_forwardKapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows: Information State University On-the-Go Home Precious Pre-school Direct Materials Cost (food) $53,800 $36,000 $79,400 Direct Labor Cost $43,800 $40,500 $56,000 Labor Hours 3,250 3,600 4,050 The company applies overhead at a rate of $20.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $406,400. The allocated overhead for the month was $141,200, of which $126,100 should be credited to accounts payable and $39,200 should be credited to Accumulated Depreciation.1. Determine the costs that should be assigned to each of the jobs. State University On-the-Go Home Precious Pre-school TOTAL Direct Materials Direct Labor Actual Overhead Total Job Cost Manufacturing Overhead Debit Credit Double line Double line 2. Do the…arrow_forward
- Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows: Information State University On-the-Go Home Precious Pre-school Direct Materials Cost (food) $53,800 $36,000 $79,400 Direct Labor Cost $43,800 $40,500 $56,000 Labor Hours 3,250 3,600 4,050 The company applies overhead at a rate of $20.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $406,400. The allocated overhead for the month was $141,200, of which $126,100 should be credited to accounts payable and $39,200 should be credited to Accumulated Depreciation.1. Determine the costs that should be assigned to each of the jobs.arrow_forwardA&R Quality Advisors is a small consulting firm offering quality audits and advising services to small and mid-sized manufacturing firms. Quality audits entail reviewing, checking, and documenting quality practices within a firm. Quality advising entails making recommendations for new or revised quality practices. Other firms in the area offer one or both of these services, although the competition for quality audit jobs is stronger than for quality advising. In addition to senior executives, A&R employees are either staff or managers. Staff employees are usually younger with less experience. Managers, who oversee the staff on jobs, are more experienced. The average hourly wage is $60 for staff and $150 for managers. (Both staff and managers are paid an annual salary; these hourly costs are based on 2,000 average annual hours worked.) Staff are expected to spend at least 90 percent of their time on billable work. Because of administrative work associated with supervising the staff and…arrow_forwardThe company uses ABC and has determined the following activities, cost drivers and activity rates Activity Center Activity Driver Activity rate Direct labor usage Direct labor hours $3 per DL hrMachine usage Machine hours $8 per machine hrMachine setups Setups $200 per set up Design changes Design changes $400 per design change You have completed Job 101. Determine the cost of Job 101, if the job required $1,000 in Direct Material, $3,000 in Direct Labor, 500 direct labor hours, 75 machine hours, 2 setups and 1 design change.arrow_forward
- Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows: Information State University On-the-Go Home Precious Pre-school Direct Materials Cost (food) $55,900 $36,800 $79,600 Direct Labor Cost $46,200 $38,700 $54,600 Labor Hours 3,310 3,520 3,900 The company applies overhead at a rate of $17.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $398,400. The actual overhead for the month was $153,200, of which $129,300 should be credited to accounts payable and $40,000 should be credited to Accumulated Depreciation.Determine the costs that should be assigned to each of the jobs. State University On-the-Go Home Precious Pre-school TOTAL Direct Materials Direct Labor Applied Overhead Total Job Cost Manufacturing Overhead Debit Credit Double line Double linearrow_forwardChance Consulting, a consulting firm, specializes in advising companies on creating business plans. Chance Consulting uses a job cost system with a predetermined indirect cost allocation rate computed as a percentage of expected direct labor costs. At the beginning of the year, managing partner Sarah Chance prepared the following plan, or budget, for the year: Direct labor hours (professionals) 19,000 hours Direct labor costs (professionals) $2,650,000 Office rent $260,000 Support Staff Salaries $870,000 Utilities $340,000 Juda Resources is inviting several consulting firms to bid for work. Chance estimates that this job will require about 220 direct labor hours. Compute Chance Consulting’s hourly direct labor cost rate and their indirect cost allocation rate What is the estimate cost for the Juda Resources Consulting Contract? If Chance Consulting wants to earn a profit that equals 35% of the job’s cost, how much should the company bid…arrow_forwardIn Class Assignment 1 AlSaleh has assigned overhead on a plantwide basis to its two products (Tables and Chairs) using direct labor hours which are estimated to be 200,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are Ordering and receiving (cost driver is Purchase orders) and machine setup (cost driver is number of setups). Overhead allocated to the ordering and receiving cost pool is $200,000, and $800,000 is allocated to the machine setup cost pool. Additional information related to these pools is as follows: Cost Drivers Tables Chairs Purchase orders 30,000 10,000 number of setups 10,000 30,000 a. Determine the amount of overhead assigned to the table product line and the chairs product line using activity-based costing. b. What amount of overhead would be assigned to the tables and chairs product lines using the traditional approach,…arrow_forward
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