4.16 (10 min)
Job order costing, process costing.
a. Job costing
b. Process costing
c. Job costing
d. Process costing
e. Job costing
f. Process costing
g. Job costing
h. Job costing (but some process costing)
i. Process costing
j. Process costing
k. Job costing
Actual costing, normal costing, accounting for manufacturing overhead.
= 1.80 or 185%
= 1.9 or 190%
Costs of Job 626 under actual and normal costing follow:
Direct manufacturing labor costs
Manufacturing overhead costs
$30,000 1.90; $30,000 1.80
54,000 Total manufacturing costs of Job 626
$2,755,000 $2,610,000 = $145,000
There is no under- or overallocated overhead under actual costing because overhead is allocated under actual costing by multiplying actual manufacturing labor costs and the actual manufacturing overhead rate. This, of course equals the actual manufacturing overhead costs. All actual overhead costs are allocated to products. Hence, there is no under- or overallocatead overhead.
(20 -30 min.)
Job costing, normal and actual costing.
$50 per direct labor-hour
$42 per direct labor-hour
These rates differ because both the numerator and the denominator in the two calculations are different—one based on budgeted numbers and the other based on actual numbers.
Assembly support ($50 900; $50 1,010)
Assembly support ($42 900; $42 1,010)
Normal costing enables Anderson to report a job cost as soon as the job is completed, assuming that both the direct materials and direct labor costs are known at the time of use. Once the 900 direct labor-hours are known for the Laguna Model (June 2007), Anderson can compute the $187,726 cost figure using normal costing. Anderson can use this information to manage the costs of the Laguna Model job as well as to bid on similar jobs later in the year. In contrast, Anderson has to wait until the December 2007 year-end to compute the $180,526 cost of the Laguna Model using actual costing.
Although not required, the following overview diagram summarizes Anderson Construction’s job-costing system.
Budgeted manufacturing overhead rate, allocated manufacturing overhead.
Budgeted manufacturing overhead rate
= = $20 per machine-hour
= 195,000 × $20 = $3,900,000
Since manufacturing overhead allocated is greater than the actual manufacturing overhead costs, Waheed overallocated manufacturing overhead:
Manufacturing overhead allocated
Actual manufacturing overhead costs
Overallocated manufacturing overhead
Job costing, accounting for manufacturing overhead, budgeted rates.
An overview of the product costing system is
Budgeted manufacturing overhead divided by allocation base:
= $36 per machine-hour
= 180% of direct manuf. labor costs
Machining department, 2,000 hours $36
Assembly department, 180% $15,000...
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