3-2 Final Project I Submission NVG

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Accounting

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Apr 3, 2024

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Viruet Gonzalez 1 Najey Viruet Gonzalez Christina Wilson Acc- 311 July 15, 2022 SRS Educational Press achieved outstanding performance in 2017. It is estimated that at the end of the year, the company generated revenues of $4,110.00. Based on these calculations, I determined the company's profit margin for the year, which was calculated as follows: (revenues-COGS) / revenues. The percentage for the year is 8000-3890=4100/8000=.514x100=51.4%. From the perspective of their profit margins over the year, I believe they should maintain the in-house press production program. A manufacturing overhead cost of $1950 by SRS Educational Press and an over-allocation of manufacturing overhead cost of $130.00 by SRS Educational Press. Based on the $2080- $1950 calculation, I calculated an overallocation of $130.00 of the budget. A minimal amount of money was over-allocated, and the costs incurred within the accounted MOH costs were well within the amount over-allocated. Consequently, a reduction in the cost of goods sold can be achieved by closing the overallocated costs to the cost of goods sold account, thereby reducing the cost of goods sold. There is a possibility that the cost accountants can lower the overhead costs in the following period if they can correctly predict that market, demand, and production will remain the same in the next period to avoid the overallocation of overhead costs. The excess overhead can be disposed of whenever overapplied overhead is reported as unearned revenue on the balance sheet. To balance the overapplied overhead at the

Viruet Gonzalez 2 end of an accounting period, COGS is credited based on the amount of the overapplied overhead. Underapplied overhead would have the same effect, except the opposite effect. Several industries can benefit from job order costing, even though manufacturing companies use it. As an example, I am thinking of the automobile industry, which utilizes cost accounting even though they are supposed to do so. The job cost method can be of great benefit to the car industry when it comes to how the automobile is constructed. This could be direct costs for parts used to build the vehicle or labor costs for the crew working along the entire process during all the building steps. At the different stages of the car building process, overhead manufacturing costs are generally implemented as the cost of the equipment used for constructing the cars, as well as the managers and supervisors of the plants. Using such a method, the company can calculate the total cost of building the vehicle during the period under consideration and divide that by the number of cars they produced. The percentage used for overhead allocation will then be calculated as a result of this step. The company can use this method to ensure that they are budgeting for the correct percentage and that all expenses associated with manufacturing a car are appropriately accounted for. By doing this, the company can ensure they are profitable in the long run. There is also an industry in which job costing could be helpful, such as a legal firm. Unlike a physical product, this does not involve any physical product. It is an hourly service provider that offers a wide range of services per hour. A significant portion of the billable hourly rate pays the employees and the employed lawyers. As part of the ongoing office maintenance, overheads are required, and the costs of shared facilities

Viruet Gonzalez 3 are allocated among clients based on the estimated overheads. It will give them a better chance to make a profit if they break down all the charges and overheads.

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