CUSTOM COST ACCOUNTING 15E
15th Edition
ISBN: 9781269831338
Author: Horngren
Publisher: PEARSON C
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Textbook Question
Chapter 4, Problem 4.21E
(10 min)
In each of the following situations, determine whether job costing or process costing would be more appropriate.
| a. A CPA firm | l. A landscaping company |
| b. An oil refinery | m. An orange juice concentrate producer |
| c. A custom furniture manufacturer | n. A movie studio |
| d. A tire manufacturer | o. A law firm |
| e. A textbook publisher | p. A commercial aircraft manufacturer |
| f. A home builder | q. A management consulting firm |
| g. An advertising agency | r. A cell phone battery manufacturer |
| h. A dairy | s. A catering service |
| i. A flour mill | t. A paper mill |
| j. A paint manufacturer | u. A computer repair shop |
| k. A nursing home |
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Students have asked these similar questions
After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey wondered if it was time to critically analyze overhead costs at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of its overhead. Additional information about overhead follows.
Activity
Cost
Driver
Setting up machines
$
22,410
27
batches
Inspecting components
$
4,600
4,600
parts
Providing utilities
$
9,200
4,600
machine hours
Overhead has been applied to output at a rate of 40% of direct labor costs. The following data pertain to Job 615.
Direct materials
$
2,100
Direct labor
$
3,800
Batches
2
batches
Number of parts
490
parts
Machine hours
570
machine hours
1. Classify each of its three overhead activities as unit level, batch level, product level, or facility level.
2. What is the total cost of Job 615 if Business Solutions applies…
The 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.
Haywood Printing is processing a job with the following activity rates:
Activity
Cost Driver
Driver Rate
Direct labor
Number of hours
$8
Copying
Number of copies
$0.05
If this job requires 5 hours for 1,000 copies, what is the activity-based cost of the job?
Chapter 4 Solutions
CUSTOM COST ACCOUNTING 15E
Ch. 4 - Define cost pool, cost tracing, cost allocation,...Ch. 4 - How does a job-costing system differ from a...Ch. 4 - Why might an advertising agency use job costing...Ch. 4 - Describe the seven steps in job costing.Ch. 4 - Give examples of two cost objects in companies...Ch. 4 - Describe three major source documents used in...Ch. 4 - What is the advantage of using computerized source...Ch. 4 - Give two reasons why most organizations use an...Ch. 4 - Distinguish between actual costing and normal...Ch. 4 - Describe two ways in which a house-construction...
Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Which of the following does not accurately...Ch. 4 - Sturdy Manufacturing Co. assembled the following...Ch. 4 - For which of the following industries would...Ch. 4 - ABC Company uses job-order costing and has...Ch. 4 - Under Stanford Corporations job costing system,...Ch. 4 - (10 min) Job costing, process costing. In each of...Ch. 4 - Actual costing, normal costing, accounting for...Ch. 4 - Job costing, normal and actual costing. Atkinson...Ch. 4 - Budgeted manufacturing overhead rate, allocated...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Job costing, consulting firm. Frontier Partners, a...Ch. 4 - Time period used to compute indirect cost rates....Ch. 4 - Accounting for manufacturing overhead. Creative...Ch. 4 - Job costing, journal entries. The University of...Ch. 4 - Journal entries, T-accounts, and source documents....Ch. 4 - Job costing, journal entries. Donald Transport...Ch. 4 - Job costing, unit cost, ending work in process....Ch. 4 - Job costing; actual, normal, and variation from...Ch. 4 - Job costing; variation on actual, normal, and...Ch. 4 - Proration of overhead. The Ride-On-Wave Company...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Service industry, job costing, law firm. Kidman ...Ch. 4 - Service industry, job costing, two direct- and two...Ch. 4 - Proration of overhead. (Z. Iqbal, adapted) The Zaf...Ch. 4 - Normal costing, overhead allocation, working...Ch. 4 - Proration of overhead with two indirect cost...Ch. 4 - General ledger relationships, under- and...Ch. 4 - Overview of general ledger relationships. Estevez...Ch. 4 - Allocation and proration of overhead. Resource...Ch. 4 - (2530 min.) Job costing, ethics. Joseph Underwood...Ch. 4 - Job costingservice industry. Market Pulse performs...
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