3.Blast it! Said David Wilson, president of Teledex Company." We have just lost the bid on the koopers job by $2,000. It seems we are either too high to get the job or too low to make any money on half the jobs we bids". Teledex Company manufactures products to customers' specifications and operates the job-order costing system. Manufacturing overhead cost is applied to job on the basis of direct labor cost. The following estimates were made at the beginning of the year: Direct Materials.. Direct Labor.. Department Fabricating Machining Assembly Direct Labor.. $100,000 $300,000 Manufacturing Overhead. $400,000 $90,000 Jobs require varying amounts of work in the three departments. The koopers job, for example, would have required manufacturing costs in the three departments as follows: Department Fabricating Machining Assembly Required: $ 200,000 $350,000 $ 200 Total plant $1,400 $ 500 ? $3,000 $ 2,800 $ 6,200 Manufacturing Overhead. ? ? The Company uses a plantwide overhead rate to apply manufacturing cost to jobs. $ 600,000 $840,000 Total plant $4,600 $9,500 ? 1. Assuming use of a plantwide overhead rate a. Compute the rate of the current year b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. 2. Suppose that instead of using a plantwide overhead rate, the company had used the separate predetermined overhead rate in each department. Under these conditions: a. Compute the rate for each department for the current year
3.Blast it! Said David Wilson, president of Teledex Company." We have just lost the bid on the koopers job by $2,000. It seems we are either too high to get the job or too low to make any money on half the jobs we bids". Teledex Company manufactures products to customers' specifications and operates the job-order costing system. Manufacturing overhead cost is applied to job on the basis of direct labor cost. The following estimates were made at the beginning of the year: Direct Materials.. Direct Labor.. Department Fabricating Machining Assembly Direct Labor.. $100,000 $300,000 Manufacturing Overhead. $400,000 $90,000 Jobs require varying amounts of work in the three departments. The koopers job, for example, would have required manufacturing costs in the three departments as follows: Department Fabricating Machining Assembly Required: $ 200,000 $350,000 $ 200 Total plant $1,400 $ 500 ? $3,000 $ 2,800 $ 6,200 Manufacturing Overhead. ? ? The Company uses a plantwide overhead rate to apply manufacturing cost to jobs. $ 600,000 $840,000 Total plant $4,600 $9,500 ? 1. Assuming use of a plantwide overhead rate a. Compute the rate of the current year b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. 2. Suppose that instead of using a plantwide overhead rate, the company had used the separate predetermined overhead rate in each department. Under these conditions: a. Compute the rate for each department for the current year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Transcribed Image Text:3.Blast it! Said David Wilson, president of Teledex Company." We have just lost the bid
on the koopers job by $2,000. It seems we are either too high to get the job or too low to
make any money on half the jobs we bids".
Teledex Company manufactures products to customers' specifications and
operates the job-order costing system. Manufacturing overhead cost is applied to job on
the basis of direct labor cost. The following estimates were made at the beginning of the
year:
Direct Labor...
Manufacturing Overhead.
$ 200,000 $100,000 $300,000
$350,000 $400,000 $90,000
Jobs require varying amounts of work in the three departments. The koopers job, for
example, would have required manufacturing costs in the three departments as follows:
Department
Fabricating Machining Assembly
Direct Materials.
Direct Labor…………
Department
Fabricating Machining Assembly
Required:
$ 200
Total plant
$3,000
$ 2,800
$ 6,200
Manufacturing Overhead.
?
?
The Company uses a plantwide overhead rate to apply manufacturing cost to jobs.
$ 1,400
$ 500
?
$ 600,000
$840,000
Total plant
$4,600
$ 9,500
?
1. Assuming use of a plantwide overhead rate
a. Compute the rate of the current year
b. Determine the amount of manufacturing overhead cost that would have
been applied to the Koopers job.
2. Suppose that instead of using a plantwide overhead rate, the company had
used the separate predetermined overhead rate in each department. Under
these conditions:
a. Compute the rate for each department for the current year
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