cialHomeInsertPage LayoutFormulasADataReviewView0000CH.Cause-and-Effect Relationship BetweenAllocation Base and Activity CostStandard Job Special Job1Total2 Number of printing jobs3 Price per job4 Cost of supplies per job5 Direct labor costs per job6 Printing machine-hours per job7 Cost of printing machine operations400200$ 600$1002$$ 750$ 125$901001010$ 75,000 Indirect costs of operating printing machinesincrease with printing machine-hours8.9 Setup-hours per job10 Setup costs11 Total number of purchase orders12 Purchase order costs47$ 45,000 | Indirect setup costs increase with setup-hourslugmos400500$ 18,000 Indirect purchase order costs increase withnumber of purchase orders$ 20,000 Design costs are allocated to standard and specialjobs based on a special study of the design13nead cost per$4,000$16,00014 Design costs15departmentMarketing costs as a percentage of16revenuesng system to$ 19,500$ 24,000 Demand for administrative resources increases5%5%wopuilds build-imple cost-n 2017. Oneompetitive.foverheadne gathers17 Administration costswith direct labor costsChps19Required1. Calculate the cost of a standard job and a special job under the simple costing system.2. Calculate the cost of a standard job and a special job under the activity-based costing system.3. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple andactivity-based costing systems differ in the cost of a standard job and a special job?4. How might Speediprint use the new cost information from its activity-based costing system to bettermanage its business?sed byn Ordinary 5-25 Activity-based costing, service company. Speediprint Corporation owns a small printing press thatprints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as stan-dard jobs or special jobs. Speediprint's simple job-costing system has two direct-cost categories (directmaterials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocatestherefore is planning to implement an activity-based costing system. Speediprint's ABC system wouldSpeediprint is concerned about the accuracy of the costs assigned to standard and special jobs and4.Direct maProductiin that department?Materialmaterials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and a tairectall indirect costs using printing machine-hours as the allocation base.Speediprint is concerned about the accuracy of the costs assigned to standard and special iobeMachineMachineNumberhave the same direct-cost categories as its simple costing system. However, instead of a single indicost pool there would now be six categories for assigning indirect costs: design, purchasing, setup nrinting machine operations, marketing, and administration. To see how activity-based costing would afferthe costs of standard and special jobs, Speediprint collects the following information for the fiscal vear2017 that just ended.The owners have hearsystem and are curiouthe indirect-cost poolproduction schedulingDoors collected the for

Traditional costing system: It is a method of allocation of overhead to the products. Under this…

5-25 Activity-based costing, service company. Speediprint Corporation ówns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as stan- dard jobs or special jobs. Speediprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocates in that dep all indirect costs using printing machine-hours as the allocation base. Speediprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Speediprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect cost pool there would now be six categories for assigning indirect costs: design, purchasing, setup. nri ing machine operations, marketing, and administration. To see how activity-based costing would affer the costs of standard and special jobs, Speediprint collects the following information for the fiscal veay 2017 that just ended.

5-25 Activity-based costing, service company. Speediprint Corporation ówns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as stan- dard jobs or special jobs. Speediprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocates in that dep all indirect costs using printing machine-hours as the allocation base. Speediprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Speediprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect cost pool there would now be six categories for assigning indirect costs: design, purchasing, setup. nri ing machine operations, marketing, and administration. To see how activity-based costing would affer the costs of standard and special jobs, Speediprint collects the following information for the fiscal veay 2017 that just ended.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter4: Job-order Costing And Overhead Application

Section: Chapter Questions

Problem 27BEA: Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a...

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The management of Gwinnett County Chrome Company, described in Problem 1A, now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows: Instructions 1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department. 2. Determine the product factory overhead costs, using the multiple production department rates in (1).
5. Sunrise Company provides building services. Each building job is different from the others and the company's accountant uses a job-order costing system to allocate costs to the different jobs. She uses direct labour hours as the basis for overhead allocation and estimates the following amounts for the year: Direct materials $ 14,720,000 Direct labour costs $ 8,200,000 Overhead $ 4,920,000 Direct labour hours 410,000 The accountant recorded the following data for the three jobs that Sunrise started and completed during the quarter. School Residential Cinema Direct Materials $2,944,000 $2,208,000 $4,416,000 Direct Labour Hours 68,000 34,000 17,000 Required: 1. Compute the predetermined overhead allocation rate for the year and apply overhead to the three jobs. (Round your "Predetermined overhead allocation rate" to 2 decimal places). 2. Compute the cost of each job. (Do not round intermediate calculations).
5-26 Activity-based costing, manufacturing. Decorative Doors, Inc., produces two types of doors, interior and exterior. The company’s simple costing system has two direct-cost categories (materials and labor)and one indirect-cost pool. The simple costing system allocates indirect costs on the basis of machinehours. Recently, the owners of Decorative Doors have been concerned about a decline in the market sharefor their interior doors, usually their biggest seller. Information related to Decorative Doors production forthe most recent year follows:Interior ExteriorUnits sold 3,200 1,800Selling price $ 125 $ 200Direct material cost per unit $ 30 $ 45Direct manufacturing labor cost per hour $ 16 $ 16Direct manufacturing labor-hours per unit 1.50 2.25Production runs 40 85Material moves 72 168Machine setups 45 155Machine-hours 5,500 4,500Number of inspections 250 150The owners have heard of other companies in the industry that are now using an activity-based costingsystem and are curious how…
4-21 Job costing, process costing.In each of the following situations, determine whether job costing or process costing would be moreappropriate.a. A CPA firmb. An oil refineryc. A custom furniture manufacturerd. A tire manufacturere. A textbook publisherf. A home builderg. An advertising agencyh. A dairyi. A flour millj. A paint manufacturerk. A nursing homel. A landscaping companym. An orange juice concentrate producern. A movie studioo. A law firmp. A commercial aircraft manufacturerq. A management consulting firmr. A cell phone battery manufacturers. A catering servicet. A paper millu. A computer repair shop
C15Q5 Need help Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate. 2. Using the direct method, rework requirement 1. 3. Based on the following information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2. Direct Manufacturing Labor–Hours Machining Assembly Job 88 23 2 Job 89 5 22 4. The company evaluates the performance of the operating department managers on the basis of how well they managed their total costs, including allocated costs. As the manager of the Machining Department, which allocation method would you prefer from the results obtained in requirements…
please answer a, b and c O’Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O’Leary uses a normal job costing system. Direct labor at O’Leary is paid $29 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 69,400 56,400 Manufacturing overhead costs incurred Indirect labor $ 2,856,000 $ 2,256,000 Employee benefits 1,041,000 846,000 Supplies 694,000 564,000 Power 651,000 546,000 Heat and light 142,800 142,800 Supervision 783,210 663,450…
Speediprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as standard jobs or special jobs. Speediprint’s simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base. Speediprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Speediprint’s ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirectcost pool there would now be six categories for assigning indirect costs: design, purchasing, setup, printing machine operations, marketing, and administration. To see how activity-based costing would affect the costs of standard and special…
Speediprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as standard jobs or special jobs. Speediprint’s simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base. Speediprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Speediprint’s ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirectcost pool there would now be six categories for assigning indirect costs: design, purchasing, setup, printing machine operations, marketing, and administration. To see how activity-based costing would affect the costs of standard and special…
P4-14 Determining overhead rates, using direct labor cost, direct labor hour, and machine hour methods; determining job cost; computing underapplied and overapplied overhead Abbey Products Company is studying the results of applying fac- tory overhead to production. The following data have been used: estimated factory overhead, $60,000; estimated materials costs, $50,000; estimated direct labor costs, $60,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in pro- cess at the beginning of the month, none. The actual factory overhead incurred for November was $80,000, and the production statistics on November 30 are as follows:
Please Help Solve Section Required D & E O’Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O’Leary uses a normal job costing system. Direct labor at O’Leary is paid $31 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 69,800 56,800 Manufacturing overhead costs incurred Indirect labor $ 2,872,000 $ 2,272,000 Employee benefits 1,047,000 852,000 Supplies 698,000 568,000 Power 655,000 550,000 Heat and light 143,600 143,600 Supervision 784,370…
4-36 Job costing, accounting for manufacturing overhead, budgeted rates. The Solomon Company uses a job-costing system at its Dover, Delaware, plant. The plant has a machining department and a finishing department. Solomon uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department with machine-hours as the allocation base and the finishing department with direct manufacturing labor costs as the allocation base). The 2017 budget for the plant is as follows: Machine Department Finished Department Manufacturing Overhead Cost 10,660,000 8,000,000 Direct Manufacturing labor cost 970,000 4,000,000 Direct Manufacturing labor-hours 26,000 160,000 Machine Hours 205,000 31,000 Required: 1: Prepare an overview diagram of Solomon’s job-costing system. 2: What is the budgeted manufacturing overhead rate in the machining department? In the finishing department? 3: During the month of…
please answer d and e O’Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O’Leary uses a normal job costing system. Direct labor at O’Leary is paid $29 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 69,400 56,400 Manufacturing overhead costs incurred Indirect labor $ 2,856,000 $ 2,256,000 Employee benefits 1,041,000 846,000 Supplies 694,000 564,000 Power 651,000 546,000 Heat and light 142,800 142,800 Supervision 783,210 663,450…