Job costing k. Job costing 4-17 (20 min.) Actual costing‚ normal costing‚ accounting for manufacturing overhead. 1. = = = 1.80 or 185% = = = 1.9 or 190% 2. Costs of Job 626 under actual and normal costing follow: Actual Normal Costing Costing Direct materials $ 40‚000 $ 40‚000 Direct manufacturing labor costs 30‚000 30‚000 Manufacturing overhead costs $30‚000 1.90; $30‚000 1.80 57‚000 54‚000 Total manufacturing costs of Job 626 $127‚000
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Products manufactures specialized goods to customers’ specifications and operates a job-order costing system. Manufacturing overhead cost is applied to jobs on the basis of direct labor cost. The following estimates were made at the beginning of the year: Department Cutting Machining Assembly Total Plant Direct labor $300‚000 $200‚000 $400‚000 $900‚000 Manufacturing overhead $540‚000 $800‚000 $100‚000 $1‚440‚000 Jobs require varying amounts of work in the three departments. The Hastings job‚ for
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Bhatti FCMA‚ FPA‚ MA (Economics)‚ BSc Dubai‚ United Arab Emirates Activity-Based Costing Activity-Based Costing System 2 The Concept Activity-Based Costing In contrast to traditional/absorption costing system‚ ABC system first accumulates overheads costs for each organizational activity‚ and then assigns the costs of the activities to the products‚ services‚ or customers (cost objects) causing that activity. Activity-Based Costing System 3 Origin During 1980’s‚ the limitations of absorption
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Pre-Test #2- Key 1. The use of predetermined overhead rates in a job-order cost system makes it possible to estimate the total cost of a given job as soon as production is completed. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Knowledge Garrison - Chapter 03 #1 Learning Objective: 03-01 Compute a predetermined overhead rate Level: Easy 2. The process of assigning overhead cost to jobs is known as overhead application. TRUE AACSB: Reflective Thinking
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products (e.g. cost of resources used exceeds sales revenues). * Manufacturing Costs: Manufacturing costs are the costs associated with the production of goods. They include three cost categories: direct material‚ direct labor and manufacturing overhead. * Non-Manufacturing Costs: These costs can be defined as all the costs that are not associated with the production of goods. These costs typically include selling as well as general and administrative
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CHAPTER 4 JOB COSTING 4-1 Cost pool––a grouping of individual indirect cost items. Cost tracing––the assigning of direct costs to the chosen cost object. Cost allocation––the assigning of indirect costs to the chosen cost object. Cost-allocation base––a factor that links in a systematic way an indirect cost or group of indirect costs to cost objects. 4-2 In a job-costing system‚ costs are assigned to a distinct unit‚ batch‚ or lot of a product or service. In a process-costing system
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the labor-hours on the x-axis and the overhead expenditure on the Y-axis. What insights are reveals by your scatter graph? Labor Hours Overhead Expense 2‚500 55‚000 2‚800 59‚000 3‚000 60‚000 4‚200 64‚000 4‚500 67‚000 5‚500 71‚000 6‚500 74‚000 7‚500 77‚000 7‚000 75‚000 4‚500 68‚000 3‚100 62‚000 6‚500 73‚000 57‚600 805‚000 The interesting points about the behavior of overhead costs have been revealed by the Scatter graph: - The relation between the overhead expense and labor hours is shown in a
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personnel would usually be considered to be: Indirect Labor: Yes Manufacturing OH: Yes Manufacturing overhead consists of: all manufacturing costs‚ except direct materials and direct labor. Which of the following costs would not be included as part of manufacturing overhead? Insurance on sales vehicles Conversion costs consist of which of the following: Direct labor and manufacturing overhead cost. Each of the following would be a period cost except: depreciation of a machine used in manufacturing
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appropriate for a crude oil refining business. True False 9. A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement‚ such as lawyer time‚ copying charges‚ filing fees‚ and overhead. True False 10. The job order costing system is not used by service organizations. True False 11. The job order costing system is used by service firms to determine revenues‚ expenses‚ and ultimately profit. True False 12
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CHAPTER 17 JOB ORDER COST SYSTEMS AND OVERHEAD ALLOCATIONS OVERVIEW OF BRIEF EXERCISES‚ EXERCISES‚ PROBLEMS‚ AND CRITICAL THINKING CASES Brief Exercises B. Ex. 17.1 B. Ex. 17.2 B. Ex. 17.3 B. Ex. 17.4 B. Ex. 17.5 B. Ex. 17.6 B. Ex. 17.7 B. Ex. 17.8 B. Ex. 17.9 B. Ex. 17.10 Topic Accounting for overhead Transferring costs Overhead application rates Actual and applied overhead Selecting a cost system Applying direct labor Applying direct materials Recording manufacturing costs Selecting activity bases
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