ASSIGNMENtheir maximum 1,500 billable hours available. All professional labor costs are included in a single direct-costcategory and are traced to jobs on a per-hour basis. All costs of Kidman & Associates other than profes-sional labor costs are included in a single indirect-cost pool (legal support) and are allocated to jabs usingprofessional labor-hours as the allocation base. The budgeted level of indirect costs in 2017 is $2,475,000.1. Prepare an overview diagram of Kidman's job-costing system.2. Compute the 2017 budgeted direct-cost rate per hour of professional labor.3. Compute the 2017 budgeted indirect-cost rate per hour of professional labor.4. Kidman & Associates is considering bidding on two jobs:a. Litigation work for Richardson, Inc., which requires 120 budgeted hours of professional laborb. Labor contract work for Punch, Inc., which requires 160 budgeted hours of professional labor.Prepare a cost estimate for each job.Jou firm Iocontinua- Compute the total manufacturing overhead cost allocated tô4. Assuming that Job 431 consisted of 400 units of product, what is the cost per unit?5. Amounts at the end of 2017 are as follows:Machining Department$13,250,000Finishing Department$8,400,000Manufacturing overhead incurredDirect manufacturing labor costs$ 1,000,000$4,300,000Machine-hours250,00030,000Compute the under- or overallocated manufacturing overhead for each department and for the Doverplant as a whole.6. Why might Solomon use two different manufacturing overhead cost pools in its job-costing system?4-37 Service industry, job costing, law firm. Kidman & Associates is a law firm specializing in laborrelations and employee-related work. It employs 30 professionals (5 partners and 25 associates) who workdirectly with its clients. The average budgeted total compensation per professional for 2017 is $97,500. Eachprofessional is budgeted to have 1,500 billable hours to clients in 2017. All professionals work for clients to

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their maximum 1,500 billable hours available. All professional labor costs are included in a single direct-cost category and are traced to jobs on a per-hour basis. All costs of Kidman & Associates other than profes- sional labor costs are included in a single indirect-cost pool (legal support) and are allocated to jobs using professional labor-hours as the allocation base. The budgeted level of indirect costs in 2017 is $2,475,000. 1. Prepare an overview diagram of Kidman's job-costing system. 2. Compute the 2017 budgeted direct-cost rate per hour of professional labor. 3. Compute the 2017 budgeted indirect-cost rate per hour of professional labor. 4. Kidman & Associates is considering bidding on two jobs: a. Litigation work for Richardson, Inc., which requires 120 budgeted hours of professional labor b. Labor contract work for Punch, Inc., which requires 160 budgeted hours of professional labor. Prepare a cost estimate for each job.

their maximum 1,500 billable hours available. All professional labor costs are included in a single direct-cost category and are traced to jobs on a per-hour basis. All costs of Kidman & Associates other than profes- sional labor costs are included in a single indirect-cost pool (legal support) and are allocated to jobs using professional labor-hours as the allocation base. The budgeted level of indirect costs in 2017 is $2,475,000. 1. Prepare an overview diagram of Kidman's job-costing system. 2. Compute the 2017 budgeted direct-cost rate per hour of professional labor. 3. Compute the 2017 budgeted indirect-cost rate per hour of professional labor. 4. Kidman & Associates is considering bidding on two jobs: a. Litigation work for Richardson, Inc., which requires 120 budgeted hours of professional labor b. Labor contract work for Punch, Inc., which requires 160 budgeted hours of professional labor. Prepare a cost estimate for each job.

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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Swanson Manufacturing uses activity-based management to analyze the cost of non-value-added activities across its value chain. The company's annual budgeted costs in its Human Resources Department (HR) total $5 million. This amount is allocated to 3 cost pools, as follows: (1) 20% to Hiring & Recruiting; (2) 50% to Payroll; and (3) 30% to Employee Benefits. There are 3 activity cost drivers associated with HR's 3 cost pools: (1) travel; (2) information processing; and (3) professional development. These activities drive each of HR's cost pool amounts as follows: Hiring & Recruiting Cost Pool Drivers -- 70% travel activities -- 12% information processing activities -- 18% professional development activities Payroll Cost Pool Drivers -- 10% travel activities -- 65% information processing activities -- 25% professional development activities Employee Benefits Cost Pool Drivers -- 10% travel activities -- 30% information processing activities -- 60% professional development…
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Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 51,600 machine hours per year, which represents 25,800 units of output. Annual budgeted fixed factory overhead costs are $258,000 and the budgeted variable factory overhead cost rate is $2.50 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 19,500 units, which took 40,600 machine hours. Actual fixed factory overhead costs for the year amounted to $251,600 while the actual variable overhead cost per unit was $2.40. Assume that at the end of the year, management of Patel and Sons decides that the overhead cost variances should be allocated to WIP Inventory, Finished Goods Inventory, and Cost of Goods Sold (CGS) using the following percentages: 10%, 20%, and 70%, respectively. Provide the proper journal entry to close out the…
5) Hakan&Ahmet Manufacturing Company uses applied overhead rate for allocating its manufacturing overhead to its products. The following information is estimated for the upcoming year of 2024: BUDGETED COSTS AND ESTIMATED ACTIVITY LEVELS Budgeted MOH Budgeted Direct Materals Cost Budgeted Direct Labor Cost Estimated Direct Labor Hours Estimated Machine Hours AMOUNTS and HOURS $ 720,000 $ 600,000 $ 480,000 72,000 dlh 120,000 mh At the end of the first week of January 2024, the company completed only one job order. Actual costs and actual usage of dlh and mh for this unit were as follows: Job Order Direct Material Cost ($) 100 GRS-34 Direct Labor Direct Labor Cost ($) 150 Hours 15 Machine Hours 30 Q1) Calculate a predetermined manufacturing overhead rate (applied overhead rate) by using each of the cost drivers of "direct materials cost", "direct labor hours", "direct labor costs" and "machine hours". Q2) By using each of these rates, calculate the unit cost of this job order.
The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 68% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $261,000 Take Off Airlines 85,000 Sleepy Tired Hotels 208,300 Tastee Beverages 122,300 Total $676,600 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $187,000 $717,100 Take Off…
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