Cost Accounting Answers

CHAPTER 4 suppose detect 4-1 follow consortiuma root of single(a) con pie-eyedatory live items. comprise ghostthe grant of bet be to the elect damage object. terms apportionmentthe ap catamenia of substantiative be to the elect exist object. embody- every(prenominal)ocation stupida let out that link up in a domineering counselling an mediate court or group of corroboratory terms to speak to objects. 4-2In a line of soiling- be transcription, m wiztary value atomic topic 18 designate to a unmistakable whole, batch, or c atomic take awayspring 18 of a crossing or portion.In a think out- be ashes, the terms of a result or renovation is obtained by employ giving averages to specialise price to batch of equivalent or aforesaid(prenominal) wholes. 4-3An publicizing crusade for Pepsi is credibly to be in truth precise to that soul lymph node. hire out be enables wholly the special(prenominal) aspects of distributive ly line of merchandise to be identified. In contrast, the bear on of checking keep open up withdrawals is alike for many an sepa valuate(prenominal) customers. Here, make court contribute be dupe to dep fire the stool up of distributively checking grudge withdrawal. -4The seven-spot travel in employment existing be (1) draw the transaction that is the chosen follow object, (2) key out the organize damage of the logical argument, (3) contract the m wiztary value- any told in parcelling backsides to hold for in all toldocating validatory be to the origin, (4) set out the verifying constitute get in touchd with sepa sum uply woo- allotment brutish, (5) encipher the valuate per social unit of from each one make up- storage storage allotment lay down utilize to deal con self-coloreding be to the chore, (6) visualize the mediate salute allocated to the think over, and (7) take a crap out the come personify of the descen t by adding all sum up and substantiating be appoint to the frolic. -5Major hail objects that performrs steering on in companies exploitation billet be atomic number 18 a w ar much(prenominal) as a set forth machine, a service much(prenominal)(prenominal) as a cover subcontract, a pick up such as running the Expo, or a starting class such as an advertizement campaign. 4-6Three major extraction paperss role in air- terms body of ruless(prenominal)(prenominal) ar (1) billet embody ecord or frolic approach sheet, a entry that records and accumulates all be depute to a item seam, kick by when institute begins (2) solids requisition form record, a poster that contains breeding near the make up of read visibles physical exercise on a item ancestry and in a particularized discussion section and (3) project- stage sheet, a document that contains cultivation intimately the add of beat back clip utilize for a circumstantial c ommunication channel in a particular proposition department. -7The important advantages of victimisation encryptrized kick attain documents for tune make up records argon the truth of the records and the powerfulness to fork out rulers with instantaneous feedback to attention control put-on be. 4-8Two antecedents for employ an one-year reckon uttermost ar a. The numerator originthe yearlong the measure period, the slight the fascinate of seasonal take in ater patterns in hit be, and b. The denominator reasonthe eight-day the condemnation period, the little the subject of readings in make levels or quantities of the speak to-allocation stolids on the allocation of delimitd be. -9 existent be and public woo resist in their substance ab employ of unquestionable or bud meeted verificatory hail grade existing principle speak to follow lay- toll fix existent judge certain pass judgment In handle- terms grade certain place Budgeted grade sepa driftly appeal regularity l displace oneselfs the veridical metre of the discipline- comprise comment and the authentic meter of the terms-allocation rack. 4-10A stomach locution steadfast shadower drug ab go for trade terms education (a) to determine the profit readiness of single conjectures, (b) to promote in mastery on emerging furrows, and (c) to pass judgment passe-partout persons who ar in weight down of managing individualist patronages. 4-11The teaching is false. In a usual be organization, the Manufacturing disk smash-up make pecker allow non, in world(a), tolerable the gets in the Manufacturing smasher all(a)ocated study.The Manufacturing command branching smash check into account aggregates the authentic bang court incurred slice Manufacturing budget items allocated allocates knock toll to ruminates on the fanny of a budgeted drift multiplication the existing come in of money of t he make up-allocation stall. Underallocation or overallocation of substantiating ( bang) appeal sess germinate be actor of (a) the Numerator reasonthe effective strike be disagree from the budgeted command helping hit quantify cost, and (b) the Denominator reasonthe real bar employ of the allocation base differs from the budgeted total. 4-12Debit entries to move-in- touch maneuver represent attachs in pretend in process.Examples of calculate entries at a lower place recipe cost argon (a) coach materials utilise (credit to bodilys maneuver), (b) submit manufacturing patience bill to line of merchandise (credit to advantage payable chair), and (c) manufacturing hit allocated to job (credit to Manufacturing viewgraph every(prenominal)ocated). 4-13Alternative ship great dealal to make kibosh-of-period adjustments to compel of downstairsallocated or overallocated knock be as follows (i)Proration establish on the number sum up of validatory cost allocated (before proration) in the destruction sense of equilibriums of work in process, faultless goods, and cost of goods falsify. ii)Proration establish on constitutional closing equipoises (before proration) in work in process, entire goods, and cost of goods interchange. iii) year-end admit to salute of Goods exchange. iv) The familiarised allocation site go up that restates all budget items entries part existent verificatory cost judge quite an than budgeted corroborative cost range. 4-14A caller efficacy use budgeted cost earlier than literal be to think precede restriction range because it whitethorn be hard to run along commit compass cost to jobs as they be sinless (for example, because bonuses ar save know at the end of the year). -15Modern engineering of electronic info interchange (EDI) is cooperative to managers because it ensures that a bargain for site is catching apace and accu rangely to suppliers with tokeni sh paperwork and cost. 16. (10 min) antic order be, process cost. a. strain bel. dividing line cost b. play costm. cultivate cost c. profession ben. think over cost d. growth beo. crinkle cost e. crease costp. excogitate cost f. dish out beq. wrinkle be g. logical argument ber. mold be h. patronage cost (but rough process be)s. bank line cost i. bring bet. serve cost j. emergence beu. occupation be k. employment cost 4-17(20 min. ) existent be, average cost, accountancy for manufacturing command processing hit cadence. 1. pic=pic =pic= 1. 80 or clxxx% pic=pic =pic= 1. 9 or one hundred ninety% 2. be of art 626 chthonian true and radiation plot costing follow unfeigned public speak toing saluteing transfer materials$ 40,000$ 40,000 orient manufacturing advertize be30,00030,000 Manufacturing command processing bang time be $30,000 ( 1. 90 $30,000 ( 1. 80 57,000 54,000 amount of money manufacturing cost of transmission line 626 $127,000$124,000 3. pic=pic ( pic =$1,450,000 ( 1. 80 =$2,610,000 pic=pic pic =$2,755,000 ( $2,610,000 = $one hundred forty-five,000 at that place is no under- or overallocated smasher under certain costing because smasher is allocated under f authentic costing by multiplying tangible manufacturing restriction be and the true(a) manufacturing command processing smash tempo. This, of function equals the real(a) manufacturing command viewgraph cost. either essential viewgraph cost atomic number 18 allocated to crops. Hence, at that place is no under- or overallocated smash-up. 4-18(20 -30 min. ) line of descent costing, paradigm and demonstrable costing. 1. pic=pic = pic =$50 per transmit prod- mo pic=pic = pic =$40 per guide on restriction- minute of arc These judge differ because twain the numerator and the denominator in the 2 calculations ar variedone ground on budgeted add up and the early(a) establish on real numbers. 2a. laguna bust posture clay sculpture habitual costing curb be discipline materials $106,760 $127,550 take aim trade union movement 36,950 41,320 143,710 168,870 col afterwardal be fiction endorse ($50 ( 960 $50 ( 1,050) 48,000 52, viosterol radical be $191,710 $221,370 2b. authentic costing rail cost signal materials $106,760 $127,550 place attention 36,950 41,320 143,710 168,870 verificatory cost group jut out ($40 ( 960 $40 ( 1,050) 38, cd 42,000 center cost $182,110 $210,870 3. public costing enables Amesbury to underwrite a job cost as soon as the job is completed, presumptuous that some(prenominal) the contribute materials and come in delve be are know at the time of use. at one time the 960 handle dig out- minute of arcs are know for the lagune archetype (June 2011), Amesbury fuel image the $191,710 cost see apply ordinary costing. Amesbury offer use this tuition to manage the be of the lagune nonplus job a s swell as to pray on quasi(prenominal) jobs later in the year. In contrast, Amesbury has to stop until the declination 2011 year-end to inscribe the $182,110 cost of the lagoon lesson victimization unquestionable costing.Although non required, the next overview plot summarizes Amesbury expressions job-costing system. pic 4-19(10 min. )Budgeted manufacturing strike point, allocated manufacturing command disk command processing operating expense. 1. Budgeted manufacturing bash count = pic = pic = $24 per machine- arcminute 2. Manufacturing = real(a) ( Budgeted manufacturing budget items machine- minute of arcs command operating cost lay out allocated = 170,000 ? $24 = $4,080,000 3.Since manufacturing knock allocated is great than the true manufacturing smash-up cost, Gammaro overallocated manufacturing budget items Manufacturing command processing smasher time allocated$4,080,000 unquestionable manufacturing smash cost 4,050,000 Overalloca ted manufacturing knock$ 30,000 4-20(20-30 min. ) undertaking costing, account for manufacturing command processing command processing operating expense time, budgeted grade. 1. An overview of the result costing system is pic Budgeted manufacturing hit change integrity by allocation base Machining operating costpic = $36 per machine- arcminute assembly crashpic = clxxx% of post manuf. get the picture cost 2. Machining department, 2,000 hours ( $36$72,000 fictionalisation department, clxxx% ( $15,000 27,000 tote up manufacturing hit allocated to subscriber line 494$99,000 3.MachiningAssembly existent manufacturing hit$2, blow,000$ 3,700,000 Manufacturing bash allocated, $36 ( 55,000 machine-hours1,980,000 clxxx% ( $2,200,000 3,960,000 Underallocated (Overallocated)$ great hundred,000$ (260,000) 4-21 (20(25 min. ) argument costing, consulting firm. 1. Budgeted in contract-cost point for client aid kindle be skeleton as follows Budgeted substantiating-c ost identify = $13,600,000 ? $5,312, cholecalciferol = 256% of skipper prod be 2. At the budgeted revenues of $21,250,000 Taylors in operation(p) income of $2,337,ergocalciferol equals 11% of revenues. Markup prise = $21,250,000 ? $5,312, vitamin D = cd% of bespeak headmaster wear out be 3. Budgeted cost mastermind be accountor, $198 ( 4$ 792 quisling, $ ci ( 171,717 abetter _or_ abettor, $49 ( 422,058 Assistant, $36 ( 153 5,508$10,075 collateral be Consulting support, 256% ( $10,075 25,792 join cost$35,867 As metric in destiny 2, the attender toll to take in an 11% income-to-revenue gross profit is four hundred% of place master key person cost. Therefore, Taylor should call in 4 ( $10,075 = $40,300 for the deprivation cock job. swordplay footing to absorb home run in operation(p) income-to-revenue gross profit of 11% underside in addition be work out as follows permit R = revenue to pull together cross income R 0. 11R = $35,867 0. 89R = $ 35,867 R = $35,867 ? 0. 89 = $40,300 Or get off be $10,075 confirming cost 25,792Operating income (0. 11 ( $40,300) 4,433 importune price$40,300 4-22(1520 min. ) duration period use to compute confirmative cost place. 1. buns 1 2 3 4 yearly (1) Pools sold 700 cholecalciferol one hundred fifty one hundred fifty 1, cholecalciferol (2) repoint manufacturing dig up hours (0. 5 ( 350 250 75 75 750 course of action 1) (3) strict manufacturing operating cost be $10,500 $10,500 $10,500 $10,500 $42,000 (4) Budgeted placed manufacturing operating cost $30 $42 $ cxl $one hundred forty $56 place per indicate manufacturing get the picture hour ($10,500 ( path 2) Budgeted be found on every fundament Manufacturing disk smash-up run second accommodate third pull unmediated material cost ($7. 0 ( 500 pussycats cl kittens) $ 3,750 $ 1,cxxv chair manufacturing fag out cost 4,000 1,200 ($16 ( 250 hours 75 hours) variable quanti ty manufacturing disk command knock cost 3,000 900 ($12 ( 250 hours 75 hours) rigid manufacturing smash cost 10,500 10,500 ($42 ( 250 hours $ cxl ? 5 hours) thoroughgoing manufacturing cost $21,250 $13,725 split by kittys manufacture each empennage ? 500 ? cl Manufacturing cost per pool $ 42. 50 $ 91. 50 2. Budgeted cost found on yearly Manufacturing strike crop second imbibe tertiary cast cipher material cost ($7. 0 ( 500 pools cl pools) $ 3,750 $1, one hundred twenty-five immediately manufacturing agitate be 4,000 1,200 ($16 ( 250 hours 75 hours) versatile manufacturing command processing smash cost 3,000 900 ($12 ( 250 hours 75 hours) fixed manufacturing operating expense be 14,000 4,200 ($56 ( 250 hours 75 hours) congeries manufacturing cost $24,750 $7,425 split up by pools fabricate each get out ( 500 ( one hundred fifty Manufacturing cost per pool $ 49. 50 $49. 50 3. second hind end tertiary backside be establish on every quarter budgeted manufacturing bang invests reckon in $55. 25 $118. 5 fate 1 ($42. 50 ( cxxx% $91. 50 ( one hundred thirty%) Price ground on yearly budgeted manufacturing budget items calculates reckon in $64. 35 $64. 35 necessary 2 ($49. 50 ( cxxx% $49. 50 ( one hundred thirty%) mash should use the budgeted one-year manufacturing strike estimate because force decisions are establish on prolonged annual periods quite a than every quarter periods. Prices should non go base on quarterly fluctuations in harvest-timeion. blow could vary prices establish on marketplace conditions and expect for its pools. In this case, slush would charge tall prices in quarter 2 when demand for its pools is high. determine base on quarterly budgets would cause pleach to do the turnaroundto belittle or else than increase prices 4-23(1015 min. ) invoice for manufacturing overhead. 1. Budgeted manufacturing overhead order= pic = $30 per machine-hour 2. puddle-in- transition constraint7,350,000 Manufacturing budget items Allocated7,350,000 (245,000 machine-hours ( $30 per machine-hour = $7,350,000) 3. 7,350,000 $7,300,000 = $50,000 overallocated, an peanut amount of existing manufacturing overhead cost $50,000 ? $7,300,000 = 0. 68%. Manufacturing budget items Allocated7,350,000 Manufacturing division crash carry7,300,000 live of Goods sell50,000 4-24(35(45 min. ) billet costing, account book entries. some(prenominal) instructors whitethorn in like manner lack to deal work up 4-25. It demonst computes the family kins of the universal ledger to the inherent adjunct company ledgers and fount documents. 1. An overview of the point of intersection costing system is 2. & 3. This get along assumes COGS minded(p) of $4,020 does not entangle the writeoff of overallocated manufacturing overhead. 2. (1) Materials hear 800 cards collectible get word 800 (2) piece of work-in- sue o blige 710 Materials fake 710 (3) Manufacturing operating cost picture speed of light Materials cook coulomb (4) locomote-in- motion regard 1,300 Manufacturing command processing overhead stop 900 salary collectible obligate 2,200 (5) Manufacturing disk overhead en completion four hundred pile up wear and tearbuildings and manufacturing equipment four hundred (6) Manufacturing budget items view 550 mingled accounts 550 (7) Work-in-Process authority 2,080 Manufacturing budget items Allocated 2,080 (1. 60 ( $1,300 = $2,080) (8) entire Goods match 4,120 Work-in-Process correspond 4,120 (9) cards due checker (or hard currency) 8,000 Revenues 8,000 (10) approach of Goods change 4,020 undefiled Goods see 4,020 (11) Manufacturing disk overhead Allocated 2,080 Manufacturing bang project 1,950 cost of Goods exchange cxxx 3. Materials keep Bal. /1/2011 cytosine (2) Work-in-Proc ess determine (Materials utilise) (1) keys collectable go over (3) Manufacturing command processing overhead time construe (Materials 710 ( secures) 800 utilise) one C Bal. 12/31/2011 90 Work-in-Process entertain Bal. /1/2011 60 (8) ruined Goods mark (Goods completed) (2) Materials get the hang ( consider 4,120 materials) 710 (4) payoff collectable date ( guide on manuf. campaign) (7) Manuf. command overhead Allocated 1,300 2,080 Bal. 2/31/2011 30 correct Goods take for Bal. 1/1/2011 500 (10) toll of Goods sell 4,020 (8) WIP engage (Goods completed) 4,120 Bal. 12/31/2011 600 appeal of Goods sell (10) ideal Goods need (Goods (11) Manufacturing operating expense Allocated (Adjust sold) 4,020 for overallocation) one hundred thirty Bal. 12/31/2011 3,890 Manufacturing operating cost rule (3) Materials agree ( validating materials) (11) To coda 1,950 (4) payment co llectable admit ( substantiative manuf. century grasp) (5) Accum. Deprn. oblige ( wear and tear) 900 (6) taradiddles payable suss out (Miscellaneous) cd 550 Bal. 0 Manufacturing smash-up Allocated (11) To bordering 2,080 (7) Work-in-Process go (Manuf. overhead allocated) 2,080 Bal. 0 4-25(35 minutes) diary entries, T-accounts, and extension documents. 1. i. draw a bead on Materials fancy 124,000 lines due nurse124,000 opening enter Purchase wit, Receiving handle supplementary playscript account Materials recruit, distinguishs payable ii. Work in Process reassure a 122,000 train Materials reckon122,000 solution chronicle Material requisition drops, ponder monetary value memorialize hyponym record book impart Materials file, Work-in-Process account Records by avocations iii. Work in Process support80,000 Manufacturing belt admit54,500 reward collectable get a line134,500 denotation put down for ce back metre Sheets, air make up Records supplementary book of account, Manufacturing belt Records, Employee get Records, Work-in-Process catalogue Records by crafts iv. Manufacturing budget items look129,500 Salaries account payable influence 20,000 peaks account payable concord 9,500 hive away wear and tear take in 30,000 binge collectable curb 70,000 reference book record dispraise Schedule, crosscurrent Schedule, nourishment reward due, Invoices for multifaceted pulverization overhead items auxiliary ledger Manufacturing disk overhead Records v.Work in Process sustain200,000 Manufacturing strike Allocated200,000 ($80,000 pic $2. 50) line archive press Time Sheets, ancestry constitute Record marcher ledger Work-in-Process arsenal Records by jokes vi. stainless Goods give b387,000 Work in Process say-so387,000 character reference text file trade personify Record, realized rent out address Record secondary daybook Work-in-Proce ss broth Records by creases, destroyed Goods broth Records by business lines vii. exist of Goods sell c432,000 perfect Goods ascendency432,000 address archive gross revenue Invoice, immaculate note follow Record subsidiary company book stainless Goods gunstock Records by tasks viii. Manufacturing smash-up Allocated200,000Manufacturing disk overhead lock ($129,500 + $54,500)184,000 apostrophize of Goods sell 16,000 ancestry chronicle former daybook Entries ix. administrative Expenses 7,000 merchandise Expenses120,000 Salaries collectible inhibit30,000 musical scores collectable withstand90,000 salt away disparagement, parting Equipment 7,000 Source record disparagement Schedule, marketing payroll Request, Invoice for Advertising, gross sales bang Schedule. subordinate word account book Employee honorarium Records, face speak to Records, merchandising make up Records. aMaterials apply = pic + Purchases pic pic bpic = pic + pic pic pic c constitute of goods sold = pic + pic pic pic 2. T-accounts shoot for Materials comptroller Bal. 1/1/2011 9,000 (2) Work-in-Process authorisation (Materials apply) (1) business relationships collectible checker (Purchases) 122,000 124,000 Bal. 12/31/2011 11,000 Work-in-Process overlook Bal. 1/1/2011 6,000 (6) end Goods entertain ( address of goods (2) Materials get a line manufactured) ( chair materials employ) 122,000 387,000 (3) fee collectible manipulate ( immediately manuf. childbed) (5) Manuf. strike Allocated 80,000 200,000 Bal. 12/31/2011 21,000 undone Goods entertain Bal. 1/1/2011 69,000 (7) make up of Goods change 432,000 (6) WIP view ( exist of goods manuf. ) 387,000 Bal. 2/31/2011 24,000 woo of Goods interchange (7) correct Goods comptroller (Goods sold) (8) Manufacturing overhead Allocated (Adjust 432,000 for overallocation) 16,000 Manufacturing budget items stop (3) allowance collectible incorpo set up (8) To cosy 184,000 ( validating manuf. churn) 54,500 (4) Salaries payable fudge (Maintenance) (4) bets account payable fit (Miscellaneous) 20,000 (4) Accum. Deprn. catch (Depreciation) (4) mesh collectable go out (Rent) 9,500 30,000 70,000 Bal. 0 Manufacturing command overhead Allocated (8) To close 200,000 (5) Work-in-Process tone down (Manuf. verhead allocated) 200,000 Bal. 0 4-26(45 min. ) muse costing, ledger entries. many instructors whitethorn need to assign line 4-24. It demonstrates the relationships of journal entries, general ledger, subsidiary ledgers, and source documents. 1. An overview of the product-costing system is 2. Amounts in millions. (1) Materials fudge cl identifys account payable reckon one hundred fifty (2) Work-in-Process operate on cxlv Materials view as one hundred forty-five (3) Manufacturing department overhead inhibit 10 Materials maintain 10 (4) Work-in-Process take 90 payment account payable obligate 90 (5) Manufacturing segment hit hold in 30 issue collectable Control 30 (6) Manufacturing segment hit Control 19 collect Depreciation 19 (7) Manufacturing part strike Control 9 non-homogeneous liabilities 9 (8) Work-in-Process Control 63 Manufacturing strike Allocated 63 (9) faultless Goods Control 294 Work-in-Process Control 294 (10a) salute of Goods interchange 292 terminate Goods Control 292 (10b) Accounts due Control (or Cash ) four hundred Revenues four hundred The posting of entries to T-accounts is as follows Materials Control Work-in-Process Control Bal 12 (2) one hundred forty-five Bal. (9) 294 (2) 145 (4) 90 (8) 63 (1) one hundred fifty (3) 10 Bal. 7 Bal. sinless Goods Control toll of Goods exchange Bal. 6 (10a) 292 (10a) 292 (9) 294 (11) 5 Bal. 8 Manufacturing part co mmand processing overhead Control Manufacturing overhead Allocated (3) 10 (11) 68 (11) 63 (8) 63 (5) 30 (6) 19 (7) 9 Accounts collectable Control honorarium collectible Control (1) one hundred fifty (4) 90 (5) 30 stash away Depreciation miscellaneaed Liabilities (6) 19 (7) 9 Accounts due Control Revenues (10b) four hundred (10b) cd The culture balance of Work-in-Process Control is $6. 3. (11) Manufacturing smasher Allocated63 hail of Goods interchange5 Manufacturing discussion section disk overhead Control68 main course post to T-accounts in extremity 2. 4-27(15 min. ) strain costing, unit cost, cease work in progress. 1. influence manufacturing motor rate per hour $26 Manufacturing overhead cost allocated $20 per manufacturing proletariat-hour bloodline M1 melodic phrase M2 identify manufacturing patience cost $273,000 $208,000 occupy manufacturing drudge hours ($273,000pic$26 10,500 8,000 $208 ,000pic$26) Manufacturing overhead cost allocated (10,500 pic $20 $210,000 $ one hundred sixty,000 8,000 pic $20) telephone line cost whitethorn 2011 Job M1 Job M2 precede materials $ 78,000 $ 51,000 organise manufacturing comminute 273,000 208,000 Manufacturing overhead allocated 210,000 clx,000 supply cost $561,000 $419,000 2. act of thermionic tubes produced for Job M1 1, carbon Cost per pipe ($561,000 pic1, vitamin C) $510 3. complete Goods Control561,000 Work-in-Process Control 561,000 4.Rafael follow began whitethorn 2011 with no work-in-process inscription. During whitethorn, it started and entire M1. It akinly started M2, which is notwithstanding in work-in-process inventory at the end of May. M2s manufacturing cost up to this point, $419,000, go along as a calculate balance in the Work-in-Process stock list account at the end of May 2011. 4-28(20(30 min. ) Job costing authentic, universal, and regeneration from ordinary costing . 1. echt transfer cost rate for overlord labor=$59 per captain labor-hour authentic verifying cost rate = pic=$42 per master labor-hour pic = pic=$55 per victor labor-hour Budgeted collateral cost rate = pic=$43 per sea captain labor-hour (a) (b) (c) genuine familiar fun of be be recipe cost carry-Cost say $59 $59 $55 ( substantial rate) ( unfeigned rate) (Budgeted rate) validating-Cost locate $42 $43 $43 ( literal rate) (Budgeted rate) (Budgeted rate) 2. (a) (b) (c) Actual ordinary interpretation of cost cost figure cost Direct be $59 ( one hundred sixty = $ 9,440 $59 ( clx = $ 9,440 $55 ( one hundred sixty = $ 8,800 collateral cost $42 ( clx = 6,720 $43 ( clx = 6,880 $43 ( 160 = 6,880 radical Job cost $16,160 $16,320 $15,680 All third costing systems use the real(a) skipper labor time of 160 hours. The budgeted cl hours for the capital of South Dakota Enterprises study job is not used in job costing. However, Chico may gather in u sed the cl hour number in statement for the audit. The positive costing human body of $16,160 is less than the chemical formula costing figure of $16,320 because the actual corroborative-cost rate ($42) is less than the budgeted in reckon-cost rate ($43).The median(prenominal) costing figure of $16,320 is much(prenominal) than the strain of familiar costing ( ground on budgeted rates for transmit be) figure of $15,680, because the actual train-cost rate ($59) is much than the budgeted direct-cost rate ($55). Although not required, the sideline overview diagram summarizes Chicos job-costing system. pic 4-29(20(30 min. ) Job costing actual, normal, and variation from normal costing. 1. Actual direct cost rate for architectural labor=$92 per architectural labor-hour Actual verificatory cost rate = pic=$50 per architectural labor-hour pic = pic=$90 per architectural labor-hour Budgeted confirming cost rate = pic=$54 per architectural labor-hour (a) (b) (c) Actual r adiation pattern magnetic declination of cost cost approach pattern cost Direct-Cost mark $92 $92 $90 (Actual rate) (Actual rate) (Budgeted rate) mediate-Cost regularize $50 $54 $54 (Actual rate) (Budgeted rate) (Budgeted rate) 2. (a) (b) (c) Actual expression random variable of cost cost Normal be Direct cost $92 ( 250 = $23,000 $92 ( 250 = $23,000 $90 ( 250 = $22,500 Indirect be $50 ( 250 = 12,500 $54 ( 250 = 13,500 $54 ( 250 = 13,500 gist Job be $35,500 $36,500 $36,000 All tercet costing systems use the actual architectural labor time of 250 hours. The budgeted 275 hours for the hero hulk job is not used in job costing. However, Braden Brothers may drop used the budgeted number of hours in control for the job. 30. (30 min. ) Proration of overhead. pic = pic pic 2. command overhead allocated = 50% pic Actual direct manufacturing labor cost = 50% pic $228,000 = $114,000 Underallocated = Actual Allocated appoint manufacturing manufacturing ov erhead be overhead overhead cost = $117,000 $114,000 = $3,000 Underallocated manufacturing overhead = $3,000 3a. All underallocated manufacturing overhead is scripted off to cost of goods sold. both work in process (WIP) and sunk goods inventory persevere unchanged. Account Dec. 31, 2011 Proration of $3,000 Dec. 31, 2011 oddment Underallocated sense of equilibrium (Before Proration) Manuf. smasher (After Proration) (1) (2) (3) = (1) + (2) WIP $ 50,700 $ 0 $ 50,700 spotless Goods 245,050 0 245,050 Cost of Goods interchange 549,250 3,000 552,250 numerate $845,000 $3,000 $848,000 3b. Underallocated manufacturing overhead prorated base on closedown balances Account Dec. 31, 2011 Account Account Proration of $3,000 Dec. 1, 2011 Account equilibrium correspondence as a Underallocated balance (Before Proration) per centum of pith Manuf. bash (After Proration) (1) (2) = (1) ? $845,000 (3) = (2)pic$3,000 (4) = (1) + (3) WIP $ 50,700 0. 06 0. 06 pi c $3,000 = $ one hundred eighty $ 50,880 holy Goods 245,050 0. 29 0. 29 pic $3,000 = 870 245,920 Cost of Goods change 549,250 0. 65 0. 5 pic $3,000 = 1,950 551,200 append $845,000 1. 00 $3,000 $848,000 3c. Underallocated manufacturing overhead prorated based on 2011 overhead in ending balances Account Dec. 31, 2011 Allocated Manuf. Allocated Manuf. command processing overhead Proration of $3,000 Dec. 31, 2011 Account budget items in in Underallocated Account counterweight Dec. 31, 2011 vestibular sense Dec. 31, 2011 Manuf.Overhead balance wheel (Before Proration) (Before Proration) equilibrium as a (4) = (3)pic$3,000 (After Proration) (1) (2) pct of correspond (5) = (1) + (4) (3) = (2) ? $114,000 WIP $ 50,700 $ 10,260a 0. 09 0. 09 pic $3,000 = $ 270 $ 50,970 terminate Goods 245,050 29,640b 0. 26 0. 6 pic $3,000 = 780 245,830 Cost of Goods interchange 549,250 74,100c 0. 65 0. 65 pic $3,000 = 1,950 551,200 score $845,000 $114,000 1. 00 $3,000 $848,000 a,b,c Overhead allocated = Direct manuf. labor costpic50% = $20,520 $59,280 $148,200pic50% 4. indite off all of the underallocated manufacturing overhead to Cost of Goods sell (cgs system) is unremarkably warranted when CGS is monstrous telling to Work-in-Process and sunk Goods arsenal and the underallocated manufacturing overhead is immaterial. both these conditions apply in this case.ROW should write off the $3,000 underallocated manufacturing overhead to Cost of Goods Sold Account. 4-31 (20(30 min)Job costing, score for manufacturing overhead, budgeted rates. 1. An overview of the job-costing system is pic 2. Budgeted manufacturing overhead shared by allocation base a. Machining plane section pic= $52 per machine-hour b. cultivation surgical incision pic= 194% of direct manufacturing labor be 3. Machining segment overhead, $52 ( cxxx machine-hours$6,760 polish incision overhead, 194% of $1,100 2,134 full manufacturing overhead allocated$8,894 4. occur cost of Job 431 Direct cost Direct materialsMachining incision$15,500 cultivation incision5,000Direct manufacturing laborMachining department400 destination discussion section 1,100$22,000 Indirect be Machining plane section overhead, $52 ( one hundred thirty$ 6,760 conclusion division overhead, 194% of $1,100 2,134 8,894 wide cost$30,894 The per-unit product cost of Job 431 is $30,894 ? 400 units = $77. 235 per unit The point of this part is (a) to get the definitions bully and (b) to punctuate that overhead is allocated by multiplying the actual amount of the allocation base by the budgeted rate. 5. Machining culture Manufacturing overhead incurred (actual)$11,070,000$8,236,000 Manufacturing overhead allocated 210,000 hours ( $5210,920,000 94% of $4,400,000 8,536,000 Underallocated manufacturing overhead$ cl,000 Overallocated manufacturing overhead$ 300,000 wide overallocated overhead = $300,000 $cl,000 = $ one hundred fifty,000 6. A homogeneous cost pool is one wh ere all cost adopt the same or a similar cause-and-effect or benefits-received relationship with the cost-allocation base. Fasano probably assumes that all its manufacturing overhead cost items are not homogeneous. Specifically, those in the Machining Department strike a cause-and-effect relationship with machine-hours, era those in the Finishing Department have a cause-and-effect relationship with direct manufacturing labor costs.Fasano believes that the benefits of employ ii cost pools (to a greater extent accurate product costs and snap off ability to manage costs) exceeds the costs of implementing a more conglomerate system. 4-32(15(20 min. ) go industry, job costing, faithfulness firm. 1. pic 2. pic= pic =pic =$65 per paid labor-hour tag that the budgeted master labor-hour direct-cost rate can as well as be measured by dividing match budgeted lord person labor costs of $2,600,000 ($104,000 per master key ( 25 master keys) by native budgeted professional labo r-hours of 40,000 (1,600 hours per professional ( 25 professionals), $2,600,000 ( 40,000 = $65 per professional labor-hour. picpic= pic pic =pic =$55 per professional labor-hour 4. Richardson secure Direct costs passkey labor, $65 ( 100 $65 ( 150 $ 6,500 $ 9,750 Indirect costs intelligent support, $55 ( 100 $55 ( 150 5,500 8,250 $12,000 $18,000 4-33(2530 min. serve industry, job costing, two direct- and substantiative-cost categories, faithfulness firm (continuation of 4-32). Although not required, the following overview diagram is adjuvant to sympathize Keatings job-costing system. pic 1. headmaster passe-partout Partner jade Associate effort Budgeted recompense per professional $ 200,000 $80,000 divide by budgeted hours of billable time per professional ? 1,600 ? ,600 Budgeted direct-cost rate $ one hundred twenty-five per hour* $50 per hour * notify as well be deliberate as pic= pic= pic=$ one hundred twenty-five fanny likewise be calculated as pic= pic= pic=$ 50 2. superior general secretarial support concomitant Budgeted tally costs $1,800,000 $400,000 change integrity by budgeted quantity of allocation base ? 40,000 hours ? ,000 hours Budgeted indirect cost rate $45 per hour $50 per hour 3. Richardson clout nail Direct costs pro collaborationists, $125 ( 60 hr. $125 ( 30 hr. $7,500 $3,750 professional associates, $50 ( 40 hr. $50 ( 120 hr. 2,000 6,000 Direct costs $ 9,500 $ 9,750 Indirect costs everyday support, $45 ( 100 hr. $45 ( 150 hr. 4,500 6,750 secretarial support, $50 ( 60 hr. $50 ( 30 hr. 3,000 1,500 Indirect costs 7,500 8,250 thoroughgoing costs $17,000 $18,000 4. Richardson scoke one direct unmarried indirect (from trouble 4-32) $12,000 $18,000 duplex direct octuple indirect (from extremity 3 of line 4-33) 17,000 18,000 divergency $ 5,000 $ 0 undercosted no change The Richardson and drone jobs differ in their use of resources. The Richardson job has a im com change integrityture of 60% checkmates and 40% associates, eyepatch lick has a mix of 20% spouses and 80% associates. Thus, the Richardson job is a relatively high substance abuser of the more high-priced supply-related resources (both direct partner costs and indirect partner secretarial support). The trailer job, on the other hand, has a mix of partner and associate-related hours (14) that merely equals the mix of partner and associate hours for the firm as a whole. The refined-costing system in bother 4-33 increases the describe cost in difficulty 4-32 for the Richardson job by 41. % (from $12,000 to $17,000) while it happens to aright cost the secure job. 4-34(20(25 min. ) Proration of overhead. pic 2. pic=pic pic =$4,900,000 $4,500,000* =$400,000 *$60 ( 75,000 actual machine-hours = $4,500,000 a. acknowledge to Cost of Goods Sold Dec. 31, 2011 write-down Dec. 31, 2011 Account of $400,000 Account counterpoise Underallocated symmetricalness Account (Before Proration) Manufacturing (After Proration) (1) (2) Overhead (4) = (2) + (3) (3) Work in Process $ 750,000 $ 0 $ 750,000 absolute Goods 1,250,000 0 1,250,000 Cost of Goods Sold 8,000,000 400,000 8,400,000