assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between theestimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on futurejobs. On May 9, Stretch and Trim gave Lunden Consulting an estimate of $18,044 to carpet the consulting firm's newly leased office. The estimate was based on thefollowing data:Estimated direct materials:400 meters at $32 per meter$12,800Estimated direct labor:30 hours at $20 per hour600Estimated factory overhead (80% of direct labor cost)480Total estimated costs$13,880Markup (30% of production costs)4,164Total estimate$18,044On May 10, Lunden Consulting signed a purchase contract, and the carpet was delivered and installed on May 15.The related materials requisitions and time tickets are summarized as follows:Materials Requisition No.DescriptionAmount132360 meters at $32$11,52013450 meters at $321,600Time Ticket No.DescriptionAmountH918 hours at $19$342H1218 hours at $19342 ACTUALDirect MaterialsDirect LaborSummaryMat. Req. No.DescriptionAmountTime Ticket No.DescriptionAmountItemAmountDirect Materials132360 meters at $32H918 hours at $19Direct Labor13450 meters at $32H1218 hours at $19Factory OverheadTotalTotalTotal CostFeedbackV Check My Work1 & 2. Include the estimated and actual direct materials and direct labor. Include the estimated and applied factory overhead.What is the best explanation for the variances between actual costs and estimated costs. For this purpose, assume that the additional meters of material used in the jobwere spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.a. The direct materials cost exceeded the estimate by $40 because 2 meters of materials were spoiled.b. Management didn't provide enough direction to complete tasks on budget.c. The direct materials cost exceeded the estimate by $320 because 10 meters of materials were spoiled. The direct labor cost exceeded the estimate by $84 because anadditional 6 hours of labor were used by inexperienced employees who worked for $1 less per hour. The factory overhead cost exceeded the estimate because anadditional $67 of factory overhead was allocated because of the increase in direct labor.d. Cannot be determined from the information provided.e. The direct labor cost exceeded the estimate by $130 because an additional 6 hours of labor were used by an inexperienced employee who worked for $1 less per hour.

Name: assigned to the job, and the costs incurred are recorded in the usual
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Description: assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between theestimated and actual costs are noted on the sheet. The data are then available to ma

In the given question we are provided with the estimated direct material and direct labor and the…

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assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between the estimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on future jobs. On May 9, Stretch and Trim gave Lunden Consulting an estimate of $18,044 to carpet the consulting firm's newly leased office. The estimate was based on the following data: Estimated direct materials: 400 meters at $32 per meter $12,800 Estimated direct labor: 30 hours at $20 per hour 600 Estimated factory overhead (80% of direct labor cost) 480 Total estimated costs $13,880 Markup (30% of production costs) 4,164 Total estimate $18,044 On May 10, Lunden Consulting signed a purchase contract, and the carpet was delivered and installed on May 15. The related materials requisitions and time tickets are summarized as follows: Materials Requisition No. Description Amount 132 360 meters at $32 $11,520 134 50 meters at $32 1,600 Time Ticket No. Description Amount H9 18 hours at $19 $342 H12 18 hours at $19 342

assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between the estimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on future jobs. On May 9, Stretch and Trim gave Lunden Consulting an estimate of $18,044 to carpet the consulting firm's newly leased office. The estimate was based on the following data: Estimated direct materials: 400 meters at $32 per meter $12,800 Estimated direct labor: 30 hours at $20 per hour 600 Estimated factory overhead (80% of direct labor cost) 480 Total estimated costs $13,880 Markup (30% of production costs) 4,164 Total estimate $18,044 On May 10, Lunden Consulting signed a purchase contract, and the carpet was delivered and installed on May 15. The related materials requisitions and time tickets are summarized as follows: Materials Requisition No. Description Amount 132 360 meters at $32 $11,520 134 50 meters at $32 1,600 Time Ticket No. Description Amount H9 18 hours at $19 $342 H12 18 hours at $19 342

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 6CE: Refer to Cornerstone Exercise 7.3 and solve for the allocated costs to Fabricating and Assembly...

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Refer to Cornerstone Exercise 7.3 and solve for the allocated costs to Fabricating and Assembly using the direct method of support department cost allocation. The Fabricating Department overhead rate is based on normal activity of 82,000 machine hours. The Assembly Department overhead rate is based on normal activity of 160,000 direct labor hours. Job 316 required six machine hours in Fabricating and four direct labor hours in Assembly. Total direct materials cost 120, and total direct labor cost was 80. Required: 1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. (Round overhead rates to the nearest cent.) 2. Using the overhead rates calculated in Requirement 1, calculate the cost of Job 316. 3. What if Job 316 had required one machine hour in Fabricating and four direct labor hours in Assembly? Direct labor and direct materials costs remained the same. Calculate the new cost of Job 316.
Making journal entries Assume that during the month of April the production report of Algonquin Adhesives Inc. in E8-10 revealed the following information: Make journal entries to charge materials (use the materials purchase price variance) and labor to Work in Process. (Remember to retrieve the standard costs from E8-10 before solving this exercise.)
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Activity Cost Pool Cost Driver EstimatedOverhead Use perProduct A Use perProduct B Machine Setups Setups $144,000 6,000 2,000 Assembly Number of Parts 71,000 25,000 46,000 Machine Maintenance Machine Hours 200,000 13,000 37,000 Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign.
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