2. Tyler Case, the company's CEO, recently returned from a seminar on activity based costing and instructed Kalagnanam to consider Implementing the new system. As a first step, he instructed her to analyze the overhead costs for 2021. Through her research she was able to derive the following breakdown of the estimated overhead costs for 2021 Activity Volume Activity Foundation laying Building construction Paint ing Finishing Amount $ 1,830,500 1,740, 000 1,892,000 2,437,500 Activity Measure Foundation-laying hours Construction labour-hours Painting-hours Finishing-hours 425,700 500,000 550,000 750, 000 She also documented the following activity on the three jobs during the first quarter of 2021 (in addition to the construction labour- hours consumed by the three jobs) Schfool Residential 39,550 49, 380 41,460 Cinema Foundat ion-laying hours Painting-hours Finishing-hours 38,500 36, 120 60, 600 44,250 47,660 94,000 a. Calculate the activity rates for each of the four activities (Round your answers to 2 decimal places.) Answer is complete and correct. Activity Rate per FLH per CLH 3.44 O per PH Activity Foundation laying 4 30 Building construction 3 48 Painting Finishing 3 25 O per FH

2. Tyler Case, the company's CEO, recently returned from a seminar on activity based costing and instructed Kalagnanam to consider Implementing the new system. As a first step, he instructed her to analyze the overhead costs for 2021. Through her research she was able to derive the following breakdown of the estimated overhead costs for 2021 Activity Volume Activity Foundation laying Building construction Paint ing Finishing Amount $ 1,830,500 1,740, 000 1,892,000 2,437,500 Activity Measure Foundation-laying hours Construction labour-hours Painting-hours Finishing-hours 425,700 500,000 550,000 750, 000 She also documented the following activity on the three jobs during the first quarter of 2021 (in addition to the construction labour- hours consumed by the three jobs) Schfool Residential 39,550 49, 380 41,460 Cinema Foundat ion-laying hours Painting-hours Finishing-hours 38,500 36, 120 60, 600 44,250 47,660 94,000 a. Calculate the activity rates for each of the four activities (Round your answers to 2 decimal places.) Answer is complete and correct. Activity Rate per FLH per CLH 3.44 O per PH Activity Foundation laying 4 30 Building construction 3 48 Painting Finishing 3 25 O per FH

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

2. Tyler Case, the company's CEO, recently returned from a seminar on activity-based costing and instructed Kalagnanam to consider
Implementing the new system. As a first step, he instructed her to analyze the overhead costs for 2021. Through her research she was
able to derive the following breakdown of the estimated overhead costs for 2021
Activity
Volume
Activity
Foundation laying
Building construction
Paint ing
Finishing
Amount
$ 1,830,500
1,740, 000
1,892,000
2,437,500
Activity Measure
Foundation-laying hours
Construction labour-hours
Painting-hours
Finishing-hours
425,700
500,000
550,000
750, 000
She also documented the following activity on the three jobs during the first quarter of 2021 (in addition to the construction labour-
hours consumed by the three jobs)
Foundat ion-laying hours
Painting-hours
Finishing-hours
Schfool Residential
39, 550
49, 380
41,460
38,500
36, 120
60,600
Cinena
44,250
47,660
94,000
a. Calculate the activity rates for each of the four activities (Round your answers to 2 decimal places.)
Answer is complete and correct.
Activity Rate
per
FLH
per
CLH
3.44 O per PH
Activity
Foundation laying
4 30
Building construction
3 48
Painting
Finishing
3 25 O per FH

b. Calculate the total cost of each job using activity-based costing (Do not round intermediate calculations and round your final
answers nearest to whole number.)
Answer is complete but not entirely correct.
School
Residential
Cinema
Total cost
474,677 OS
486,752
659,725

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