Bmgt 321 Chapter 4 Homework

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BMGT 321 Chapter 4 Homework

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4-18 (20 -30 min.) Job costing, normal and actual costing.

Anderson Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials and direct labor) and one indirect-cost pool (assembly support). Direct labor-hours is the allocation base for assembly support costs. In December 2013, Anderson budgets 2014 assembly-support costs to be $8,000,000 and 2014 direct labor- hours to be 160,000.
At the end of 2014, Anderson is comparing the costs of several jobs that were started and completed in 2014.

Laguna Model Mission Model
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The budgeted breakdown of professional labor on the job is as follows:

Professional Labor Category Budgeted Rate per Hour Budgeted Hours
Director $200 3
Partner 100 16
Associate 50 40
Assistant 30 160

Calculate the budgeted cost of the Tasty Chicken job. How much will Taylor bid for the job if it is to earn its target operating income of 10% of revenues?

4-23 (10–15 min.) Accounting for manufacturing overhead.

Jamison Woodworking uses normal costing and allocates manufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor-hours. Under- or overallocated overhead, if immaterial, is written off to Cost of Goods Sold. During 2014, Jamison recorded the following:

Budgeted manufacturing overhead costs $4,400,000
Budgeted direct labor-hours 200,000
Actual manufacturing overhead costs $4,650,000
Actual direct labor-hours 212,000

Required:
1. Compute the budgeted manufacturing overhead rate.
2. Prepare the summary journal entry to record the allocation of manufacturing overhead.
3. Compute the amount of under- or overallocated manufacturing overhead. Is the amount significant enough to warrant proration of overhead costs, or would it be permissible to write it off to cost of goods sold? Prepare the journal entry to dispose of the under- or overallocated overhead.

4-26 (45 min.) Job costing, journal entries.

Donald

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