EXERCISE 3-9 Job-Order Costing and Decision Making L03-1, L03-2, L03-3 Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: TOwen Machine-hours required to support estimated production .... Fixed manufacturing overhead cost.. Variable manufacturing overhead cost per machine-hour..... Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job P90 was started, completed, and sold to the customer for $2,500. The following information was available with respect to this job: 165,000 $1,980,000 $2.00 Direct materials Direct labor cost Machine-hours used. b. $1,150 $830 72 alde Compute the total manufacturing cost assigned to Job P90. say sdt gehed 3. Upon comparing Job P90's sales revenue to its total manufacturing cost, the company's chief financial officer said "If this exact same opportunity walked through our front door tomorrow, I'd turn it down rather than making it and selling it for $2,500." a. Construct an argument (supported by numerical analysis) that refutes the chief financial officer's assertion. Construct an argument (accompanied by numerical analysis) that supports the chief financial officer's assertion.
EXERCISE 3-9 Job-Order Costing and Decision Making L03-1, L03-2, L03-3 Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: TOwen Machine-hours required to support estimated production .... Fixed manufacturing overhead cost.. Variable manufacturing overhead cost per machine-hour..... Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job P90 was started, completed, and sold to the customer for $2,500. The following information was available with respect to this job: 165,000 $1,980,000 $2.00 Direct materials Direct labor cost Machine-hours used. b. $1,150 $830 72 alde Compute the total manufacturing cost assigned to Job P90. say sdt gehed 3. Upon comparing Job P90's sales revenue to its total manufacturing cost, the company's chief financial officer said "If this exact same opportunity walked through our front door tomorrow, I'd turn it down rather than making it and selling it for $2,500." a. Construct an argument (supported by numerical analysis) that refutes the chief financial officer's assertion. Construct an argument (accompanied by numerical analysis) that supports the chief financial officer's assertion.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:EXERCISE 3-9 Job-Order Costing and Decision Making L03-1, L03-2, L03-3
Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses
a job-order costing system with a plantwide predetermined overhead rate based on machine-hours.
At the beginning of the year, the company made the following estimates:
TOWER Machine-hours required to support estimated production ....
Fixed manufacturing overhead cost..
Variable manufacturing overhead cost per machine-hour..
1.
2.
Required:
Compute the plantwide predetermined overhead rate.
no lisand
During the year, Job P90 was started, completed, and sold to the customer for $2,500. The
following information was available with respect to this job:
69157
umpon
Direct materials
Direct labor cost
Machine-hours used..
b.
165,000
$1,980,000
$2.00
$1,150
$830
72
total
oldi Compute the total manufacturing cost assigned to Job P90.
dol, Jay sdt gated
3. Upon comparing Job P90's sales revenue to its total manufacturing cost, the company's chief
financial officer said "If this exact same opportunity walked through our front door tomorrow,
I'd turn it down rather than making it and selling it for $2,500."
a.
Construct an argument (supported by numerical analysis) that refutes the chief financial
officer's assertion.
Construct an argument (accompanied by numerical analysis) that supports the chief
financial officer's assertion.
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