Ch 4 Cost Accounting

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  • Topic: Cost, Cost of goods sold, Costs
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Ch4 #32, 34, 41
ACC307
#32
1) Professional Labor Hours
Indirect Costs
Direct Costs
Legal Support

Indirect-Cost
Pool

Cost-Allocation
Base

Cost Object:
Direct Labor

Job for clients

Direct Costs

2) 2008 budgeted direct-cost rate per hour of professional labor $104,000 / 1600 hours = $65 per professional labor hour

3) 2008 budgeted indirect-cost rate per hour of professional labor $2,200,000 / (25 x 1600 hours) = $55 per professional labor hour

4) a. Litigation work for Richardson, Inc., which requires 100 budgeted hours of professional labor. (Prepare cost estimate) Direct costs
Direct labor cost: $65 x 100 = $6,500
Indirect costs
Legal support cost: $55 x 100 = $5,500
Total Job Cost = $12,000

b. Labor contract work for Punch, Inc., which requires 150 budgeted hours of professional labor. (Prepare cost estimate) Direct costs
Direct labor cost: $65 x 150 = $9,750
Indirect costs
Legal support cost: $55 x 150 = $8,250
Total Job Cost = $18,000

#34
1) Compute the budgeted manufacturing overhead rate for 2009. Predetermined Overhead Rate = $4,800,000 / 80,000 = $60 per Machine Hour

2) Compute the under- or overallocated manufacturing overhead of Zaf radiator in 2009. Dispose of this amount using a. Applied Manufacturing Overhead = $60 x 75,000 = $4,500,000 Actual Manufacturing Overhead = $4,900,000

$4,900,000 - $4,500,000 = $400,000 Under-allocated in manufacturing overhead

Cost of Goods Sold $400,000
Manufacturing Overhead Allocated $4,500,000
Manufacturing Overhead Control $4,900,000
The COGS account after the write-off equals to $8,400,000, the balance before the write-off of $800,000 plus the underallocated manufacturing onverhead amount of $400,000.

b. Proration based on ending balance (before proration) in WIP Control, FG Control, and COGS Account| Account...
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