Job 13-43Job 13-44 Job 13-45Job 13-46Balance, July 124,900%2419,8002,900Direct materials5,8009,90013,2009,500Direct labor cost8101,0801,560130Materials handling1,1071,18181298Engineering462684393308Other overhead5,0226,6969,672806Total38,10139,34128,53710,8423. Calculate the balance in Work in Process on July 31.39,3794. Calculate the cost of goods sold for July.77,4425. What if Job 13-46 required no engineering change orders? What is the difference in the new cost of Job 13-46?How would the cost of the other jobs be affected? Job Costs Using Activity-Based CostingHeitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Heitger identified three overhead activities andrelated drivers. Budgeted information for the year is as follows:ActivityCostDriverAmount of DriverMaterials handling$110,700 Number of moves4,500Engineering153,900 Number of change orders9,000Other overhead310,000 Direct labor hours50,000Heitger worked on four jobs in July. Data are as follows:Job 13-43Job 13-44Job 13-45Job 13-46Beginning balance$24,900$19,800$2,900$0Direct materials$5,800$9,900$13,200$9,500Direct labor cost$810$1,080$1,560$130Job 13-43Job 13-44Job 13-45Job 13-46Number of moves4548334Number of change orders27402318Direct labor hours8101,0801,560130By July 31, Jobs 13-43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process.Required:

We shall answer sub-part 5 as it has been left blank.

Job 13-43 Job 13-44 Job 13-45 Job 13-46 Balance, July 1 24,900 19,800 2,900 Direct materials 5,800 9,900 13,200 9,500 Direct labor cost 810 1,080 1,560 130 Materials handling 1,107 1,181 812 98 Engineering 462 684 393 308 Other overhead 5,022 6,696 9,672 806 Total 38,101 39,341 28,537 10,842 3. Calculate the balance in Work in Process on July 31. 39,379 4. Calculate the cost of goods sold for July. 77,442 5. What if Job 13-46 required no engineering change orders? What is the difference in the new cost of Job 13-46? How would the cost of the other jobs be affected?

Job 13-43 Job 13-44 Job 13-45 Job 13-46 Balance, July 1 24,900 19,800 2,900 Direct materials 5,800 9,900 13,200 9,500 Direct labor cost 810 1,080 1,560 130 Materials handling 1,107 1,181 812 98 Engineering 462 684 393 308 Other overhead 5,022 6,696 9,672 806 Total 38,101 39,341 28,537 10,842 3. Calculate the balance in Work in Process on July 31. 39,379 4. Calculate the cost of goods sold for July. 77,442 5. What if Job 13-46 required no engineering change orders? What is the difference in the new cost of Job 13-46? How would the cost of the other jobs be affected?

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter16: Job Order Costing

Section: Chapter Questions

Problem 1CMA: Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A...

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Determining job costcalculation of predetermined rate for applying overhead by direct labor cost and direct labor hour methods Beemer Products Inc. has its factory divided into three departments, with individual factory overhead rates for each department. In each department, all the operations are sufficiently alike for the department to be regarded as a cost center. The estimated monthly factory overhead for the departments is as follows: Forming, 64,000; Shaping, 36,000; and Finishing, 10,080. The estimated production data include the following: The job cost ledger shows the following data for X6, which was completed during the month: Required: Determine the cost of X6. Assume that the factory overhead is applied to production orders, based on the following: 1. Direct labor cost 2. Direct labor hours (Hint: You must first determine overhead rates for each department, rounding rates to the nearest cent.)
Cost Flows Consider the following independent jobs. Overhead is applied in Department 1 at the rate of 6 per direct labor hour. Overhead is applied in Department 2 at the rate of 8 per machine hour. Direct labor wages average 10 per hour in each department. Required: Fill in the missing data for each job.
PREDETERMINED FACTORY OVERHEAD RATE Marston Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 600,000. Total estimated direct labor hours are 30,000. Total estimated direct labor costs are 1,200,000. Total machine hours are estimated to be 200,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
Minor Co. has a job order cost system and applies overhead based on departmental rates. Service Department 1 has total budgeted costs of 168,000 for next year. Service Department 2 has total budgeted costs of 280,000 for next year. Minor allocates service department costs solely to the producing departments. Service Department 1 cost is allocated to producing departments on the basis of machine hours. Service Department 2 cost is allocated to producing departments on the basis of direct labor hours. Producing Department 1 has budgeted 8,000 machine hours and 12,000 direct labor hours. Producing Department 2 has budgeted 2,000 machine hours and 12,000 direct labor hours. What is the total cost allocation from the two service departments to Producing Department 1? a. 173,600 b. 140,000 c. 134,400 d. 274,400
Cynthia Rogers, the cost accountant for Sanford Manufacturing, is preparing a management report that must include an allocation of overhead. The budgeted overhead for each department and the data for one job are as follows: Using the departmental overhead application rates, and allocating overhead on the basis of direct labor hours, overhead applied to Job 231 in the Tooling Department would be: a. 44.00. b. 197.50. c. 241.50. d. 501.00.
PREDETERMINED FACTORY OVERHEAD RATE Millerlile Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 540,000. Total estimated direct labor hours are 50,000. Total estimated direct labor costs are 900,000. Total machine hours are estimated to be 80,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
Overhead application rate Roll Tide Manufacturing Inc. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows: The standards are based on normal capacity of 2,700 direct labor hours. Actual activity for March follows: Required: 1. Compute the variable and fixed factory overhead rates per unit. 2. Compute the variable and fixed overhead rates per direct labor hour. 3. Determine the total fixed factory overhead based on normal capacity.
Overhead Rates, Unit Costs Folsom Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows: Currently, overhead is applied on the basis of machine hours using a plantwide rate. However, Janine, the controller, has been wondering whether it might be worthwhile to use departmental overhead rates. She has analyzed the overhead costs and drivers for the various departments and decided that Welding and Finishing should base their overhead rates on machine hours and that Assembly should base its overhead rate on direct labor hours. Janine has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 35% markup over full manufacturing cost. Round all overhead rates to the nearest cent. Round all bid prices to the nearest dollar. Required: 1. Calculate a plantwide rate for Folsom Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate departmental overhead rates for the producing departments. What is the bid price of each job using these rates?
Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.
Overhead application rate Creole Manufacturing Inc. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows: The standards are based on normal capacity of 2,400 direct labor hours. Actual activity for October follows: Required: 1. Compute the variable and fixed factory overhead rates per unit. 2. Compute the variable and fixed overhead rates per direct labor hour. 3. Determine the total fixed factory overhead based on normal capacity.
Job order cost sheets show the following costs assigned to each job: The company assigns overhead at $1.25 for each direct labor dollar spent. What is the total cost for each of the jobs?
Overhead Assignment: Actual and Normal Activity Compared Reynolds Printing Company specializes in wedding announcements. Reynolds uses an actual job-order costing system. An actual overhead rate is calculated at the end of each month using actual direct labor hours and overhead for the month. Once the actual cost of a job is determined, the customer is billed at actual cost plus 50%. During April, Mrs. Lucky, a good friend of owner Jane Reynolds, ordered three sets of wedding announcements to be delivered May 10, June 10, and July 10, respectively. Reynolds scheduled production for each order on May 7, June 7, and July 7, respectively. The orders were assigned job numbers 115, 116, and 117, respectively. Reynolds assured Mrs. Lucky that she would attend each of her daughters weddings. Out of sympathy and friendship, she also offered a lower price. Instead of cost plus 50%, she gave her a special price of cost plus 25%. Additionally, she agreed to wait until the final wedding to bill for the three jobs. On August 15, Reynolds asked her accountant to bring her the completed job-order cost sheets for Jobs 115, 116, and 117. She also gave instructions to lower the price as had been agreed upon. The cost sheets revealed the following information: Reynolds could not understand why the overhead costs assigned to Jobs 116 and 117 were so much higher than those for Job 115. She asked for an overhead cost summary sheet for the months of May, June, and July, which showed that actual overhead costs were 20,000 each month. She also discovered that direct labor hours worked on all jobs were 500 hours in May and 250 hours each in June and July. Required: 1. How do you think Mrs. Lucky will feel when she receives the bill for the three sets of wedding announcements? 2. Explain how the overhead costs were assigned to each job. 3. Assume that Reynoldss average activity is 500 hours per month and that the company usually experiences overhead costs of 240,000 each year. Can you recommend a better way to assign overhead costs to jobs? Recompute the cost of each job and its price, given your method of overhead cost assignment. Which method do you think is best? Why?