1. Paulson Company uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year: Paulson estimated that 40‚000 direct labor hours and 20‚000 machine hours would be worked during the year. The predetermined overhead rate per machine hour will be: A) $1.60. B) $2.10. C) $1.00. D) $1.05. Answer: B) $2.10. Manufacturing OH = Rent + Depreciation + Indirect materials + Insurance
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Inventory‚ End 52‚700 Direct Materials Used 170‚700 Direct Labour 192‚500 Manufacturing Overhead Indirect Labour 42‚000 Factory Utilities 10‚200 Factory Depreciation 17‚920 Factory Insurance 5‚000 Factory Maintenance 4‚700 Factory Supplies 16‚800 Factory Services 15‚100 Total Manufacturing Overhead Cost 111‚720 Total Manufacturing Costs 472‚920 Less: Work in Process‚ End 42‚000 Cost of Goods Manufactured
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statement. b) Use in managerial accounting: In managerial accounting‚ product costs are needed for planning‚ for cost control‚ and for decision making. c) Use in cost management: In order to manage‚ control‚ or reduce the costs of manufacturing products or providing services‚ management needs a clear idea of what those costs are. (d) Use in reporting to interested organizations: Product cost information is used in reporting on relationships between firms and various outside organizations
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of cost accounting. [2] Describe the flow of costs in a job order cost system. [3] Explain the nature and importance of a job cost sheet. [4] Indicate how the predetermined overhead rate is determined and used. [5] Prepare entries for jobs completed and sold. [6] Distinguish between under- and overapplied manufacturing overhead. 2-1 Preview of Chapter 2 Managerial Accounting Sixth Edition Weygandt Kimmel Kieso 2-2 Cost Accounting Systems Cost Accounting involves: Measuring‚ Recording‚ and Reporting
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product costs requires the inclusion of upstream and downstream costs. In practice many businesses confine their product costing systems to manufacturing costs. This is particularly true of small to medium-sized manufacturing businesses since more comprehensive costing systems cost more to implement and maintain. The costing systems that only include manufacturing costs produce the inventory valuations for external financial reporting required by
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Top of Form Grade Details - All Questions Page: 1 2 Question 1. Question : (TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system? Student Answer: A steel factory that processes iron ore into steel bars A factory that processes sugar and other ingredients into black licorice A costume maker that makes specialty costumes for figure skaters
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|? | |Advertising expense |50‚000 | |Manufacturing overhead |$250‚000 | |Sales commission |$55‚000
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Hogle Company is a manufacturing firm that uses job-order costing. On January 1‚ the beginning of its fiscal year‚ the company’s inventory balances were as follows: Raw materials $20‚000 Work in process 15‚000 Finished goods 30‚000 Prepaid Insurance 10‚000 The company applies overhead cost to jobs on the basis of machine-hours worked. For the current year‚ the company estimated that it would work 75‚000 machine hours and incur $450‚000 in manufacturing overhead cost. The following
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(A)Compute the predetermined overhead rate using traditional costing with materials cost as the basis? _ Solution: Predetermine overhead rate: Total budgeted overhead costs O/H rate = (Budgeted = Estimated) Materials cost budgeted (BASIS) 550‚000 =
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COSTING MERCHANDISING SECTOR - Audit engagements done - Special promotion of by PWC. new products by - Consulting engagements Shopper’s Stop. done by McKinsey & Co. -Advertising campaigns run by Ogilvy and Mather. - Movies produced by R K Movies. MANUFACTURING SECTOR -Assembly of individual aircrafts at Boeing. - Construction of ships at Mazgaon Dock JOB COSTING – DECISION MAKING PROCESS 1. Identify the problems and uncertainties – What it will cost to complete the job and the prices that its competitors
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