Dr.Mona ElBannan Spring 2012 HANDOUT CHAPTER 5 JOB COSTING AND PROCESS COSTING Product Costing Systems Companies use various product systems to accumulate‚ track‚ and assign the costs of production (direct labor‚ direct materials‚ and overhead costs) to the goods produced & services provided by the company. Reasons behind determining the cost of the product: 1- Pricing decisions made by the marketing manager depend on the product cost information in order to set or fix the optimal
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Week 01 APPLICATION: JOB-ORDER COSTING EXERCISE2-1 the work of Management and Managerial and Financial Accounting 1. WHEN DIRECTING AND MOTIVATING‚ MANAGERS MOBILIZE PEOPLE TO CARRY OUT PLANS AND RUN ROUTINE OPERATIONS. 2. The plans of management are expressed formally in BUDGETS 3. PLANNING consists of identifying alternatives‚ selecting among the alternatives the one that is best for the organization‚ and specifying what actions will be taken to implement the chosen
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320 Total DLH 4‚880 Plant Overhead $122‚000 DL rate/hour $30.00 Youngstown calculates a plant-wide overhead rate by dividing total overhead costs by total direct labor hours. Assume‚ for the calculations below‚ that plant overhead is a committed (fixed) cost during the year‚ but that direct labor is a variable cost. 1. Calculate the plant-wide overhead rate. Use this rate to assign overhead costs to products and calculate the profitability
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Tools Variance Analysis | | When actual material costs are different than total standard costs determine the cause. Variance Analysis | | When actual material costs are different than total standard costs determine the cause. Contribution Margin Analysis | Management has received a special order. How will profitability be impacted if the order is accepted? | Contribution Margin Analysis | Management has received a special order. How will profitability be impacted if
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Destin Brass Products Co. 1) Estimated Product costs per unit: Number of Units 7500 12500 4000 Valves Pumps Flow Controllers Material Overhead Receiving $600.00 $3‚800.00 $15‚600.00 Materials Handling $6‚000.00 $38‚000.00 $15‚600.00 Manufacturing Overhead Packing and Shipping $1‚800.00 $13‚800.00 $43‚800.00 Engineering $20‚000.00 $30‚000.00 $50‚000.00 Maintenance $10‚500.00 $17‚400.00 $2‚100.00
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Manufacturing overhead cost 60‚000 62‚000 Selling and administrative costs 20‚000 19‚000 SuperFine uses a normal costing system with direct labor cost as the allocation basis. By how much is manufacturing overhead misapplied? A) $4‚000 underapplied B) $4‚000 overapplied C) $2‚000 underapplied D) $2‚000 overapplied The correct answer is $4‚000 overapplied The POHR = $60‚000 / $20‚000 = $3 per dollar spent on direct labor. Applied overhead = $3 x 22‚000 = $66‚000 Actual overhead = $62‚000 Difference
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the company decreased manufacturing overhead by $400‚000. Which of the following most likely should be recorded at the same time? a. A debit to work in process inventory b. A credit to raw materials inventory c. A debit of cost of goods manufactured d. A credit to finished goods inventory Objective: Examine ethical issues in managerial accounting. 3. Which one of the following managerial accounting approaches attempts to allocate manufacturing overhead in a more meaningful fashion? a. Theory
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The following report is a consultation analysis of John Deere Component Works costing structure. Included is a discussion of the existing cost system as well as a comparison with the proposal of the Activity Based Costing system. The solutions to the required discussion issues have been thoroughly prepared and are hereby included. Problem Statement: The demand for John Deere Component Work’s (JDCW’s) products has suffered due to the collapse of farmland value and commodity prices. A
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Control | 750‚000 | .075 x 400‚000 = 30‚000 | 780‚000 | FG Control | 1‚250‚000 | .125 x 400‚000 = 50‚000 | 1‚300‚000 | COGS | 8‚000‚000 | .8 x 400‚000 = 320‚000 | 8‚320‚000 | Total | 10‚000‚000 | | 10‚400‚000 | c. Proration based on the overhead allocated in 2009 (before proration) in the ending balances of WIP Control‚ FG Control‚ and COGS Account | Account Balance | Allocated MFG O/H Included | Proration of $400‚000 of | Account Balance | | (Before Proration) | In Each Acct Bal(Before
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▪ Direct Labor Hours = Cost per Labor Hour ▪ Machine Hours = Cost per Machine Hour o Standard Cost System (Special Topic) Note: Under Normal cost system problem arises on disposition on overhead variances: - Normally‚ it is closed to “COGS” if immaterial otherwise‚ it should be allocated to WIP‚ FG and COGS. Transactions to Remember: 1. Recording the Purchase of Raw Materials – Direct 2. Recording the
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