Connect Access Card For Fundamental Accounting Principles
24th Edition
ISBN: 9781260158526
Author: John J Wild
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 19, Problem 18E
Exercise 19-18
Hansel Corporation has requested bids from several architects to design its new corporate headquarters. Frey Architects is one of the firms bidding on the job. Frey estimates that the job will require the following direct labor.
| A | B | C | |
| D | Labor | Estimated Hours | Hourly Rate |
| 1 | Architects | 150 | $300 |
| 2 | Staff | 300 | 75 |
| 3 | Clerical | 500 | 20 |
Frey applies
- What is Frey's estimated cost of the architectural job? Check (1) $213,125
- Prefer bids a price of $285,000, will it earn its target profit of $80,000? Analysis Component
- What bid would you suggest that Frey submit?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Question 26
Exercise 9
Engineer Co. is submitting a bid for a major job and estimates the following direct labor costs:
Engineers
Drafters
Staff
Hourly Rate
Hours
60 $ 250.00
40
$ 120.00
100
$
20.00
Engineer Co. has no direct material costs and applies overhead at a rate of 150% of direct labor cost.
It estimates the competition will bid between $63765 and $77935.
a) What is the estimated cost of direct labor for the job?
b) What is the estimated cost of the job(Labor & MOH)?
c) What should it bid to earn a 30% profit on cost?
JU
X
IX
Question 4
Stanford Corporation has four categories of overhead. The expected overhead costs for each category for next year are as follows:
Maintenance
$210,000
Materials handling
90,000
Setups
75,000
Inspection
150,000
The company has been asked to submit a bid for a proposed job. The plant manager believes that obtaining this job would result in new business in future years. Bids are usually based upon full manufacturing cost plus 30 percent. Estimates for the proposed job are as follows:
Direct materials
$5,000
Direct labor (375 hours)
$7,500
Number of material moves
4
Number of inspections
3
Number of setups
2
Number of machine-hours
150
Expected activity for the four activity-based cost drivers that would be used is:
Machine-hours
10,000
Material moves
2,000
Setups
100
Quality inspections
4,000
Required:
a. Determine the amount of overhead that would be allocated to…
Chapter 19 Solutions
Connect Access Card For Fundamental Accounting Principles
Ch. 19 - Prob. 1DQCh. 19 - Some companies use labor cost to apply factory...Ch. 19 - Prob. 3DQCh. 19 - In a job order costing system, what records serve...Ch. 19 - What journal entry is recorded when a materials...Ch. 19 - Prob. 6DQCh. 19 - Google uses a "time ticket" for some employees....Ch. 19 - What events cause debits to be recorded in the...Ch. 19 - Prob. 9DQCh. 19 - Assume that Apple produces a batch of 1,000...
Ch. 19 - 11. Why must a company use predetermined overhead...Ch. 19 - How would a hospital apply job order costing?...Ch. 19 - Harley-Davidson manufactures 30 custom-made,...Ch. 19 - Prob. 14DQCh. 19 - Jobs and job lots C1 Determine which of the...Ch. 19 - Job cost sheets C2 Clemens Cars's job cost sheet...Ch. 19 - Documents in job order costing P1 P2 P3 The left...Ch. 19 - Raw materials journal entries P1 During the...Ch. 19 - Prob. 5QSCh. 19 - Prob. 6QSCh. 19 - Prob. 7QSCh. 19 - Prob. 8QSCh. 19 - Prob. 9QSCh. 19 - Prob. 10QSCh. 19 - Prob. 11QSCh. 19 - Prob. 12QSCh. 19 - Jab order costing of services A1 An advertising...Ch. 19 - Job order costing of services A1 An advertising...Ch. 19 - Job cost sheet C2 Eco Skate makes skateboards from...Ch. 19 - Exercise 19-1 Job order production C1 Match each...Ch. 19 - Exercise 19-2 Job cost computation C2 The...Ch. 19 - Exercise 19-3 Analysis of cost flows C2 As of the...Ch. 19 - Exercise 19-4 Recording product costs P1 P2 P3...Ch. 19 - Exercise 19-5 Manufacturing cost flows P1 P2 P3...Ch. 19 - Exercise 19-6 Recording events in job order...Ch. 19 - Exercise 19-7 Cost flows in a jab order costing...Ch. 19 - Exercise 19-8 Journal entries for materials P1 Use...Ch. 19 - Exercise 19-9 Journal entries for labor P2 Use...Ch. 19 - Exercise 19-10 Journal entries for overhead P3 Use...Ch. 19 - Exercise 19-11 Overhead rate; costs assigned to...Ch. 19 - Exercise 19-12 Analyzing costs assigned to work in...Ch. 19 - Exercise 19-13 Adjusting factory overhead P4 Refer...Ch. 19 - Exercise 19-14 Adjusting factory overhead P4...Ch. 19 - Prob. 15ECh. 19 - Prob. 16ECh. 19 - Exercise 19-17 Overhead rate calculation,...Ch. 19 - Exercise 19-18 Job order costing for services A1...Ch. 19 - Exercise 19-19 Job order costing of services A1...Ch. 19 - Exercise 19-20 Direct materials journal entries P1...Ch. 19 - Problem 19-1A Production costs computed and...Ch. 19 - Problem 19-2 A Source documents, journal entries,...Ch. 19 - Prob. 3APSACh. 19 - Prob. 4APSACh. 19 - Problem 19-5A Production transactions, subsidiary...Ch. 19 - Problem 19-1B Production costs computed and...Ch. 19 - Prob. 2BPSBCh. 19 - Prob. 3BPSBCh. 19 - Problem 19-4B Overhead allocation and adjustment...Ch. 19 - Problem 19-5B Production transactions, subsidiary...Ch. 19 - The computer workstation furniture manufacturing...Ch. 19 - The General Ledger tool in Connect automates...Ch. 19 - Manufacturers and merchandisers can apply...Ch. 19 - Prob. 2AACh. 19 - Apple and Samsung compete in the global...Ch. 19 - Assume that your company sells portable housing to...Ch. 19 - Assume that you are preparing for a second...Ch. 19 - Prob. 3BTNCh. 19 - Consider the activities undertaken by a medical...Ch. 19 - Refer to the chapter opener regarding Brennan...Ch. 19 - Prob. 6BTN
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What do you think is a possible solution?arrow_forwardFactory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What did the engineer mean about the large overhead rate being a disadvantage when plating bids and seeking new business?arrow_forwardQuestion No.8 King manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are as follows. Maintenance Rs.70,000 Material Handling 30,000 Set-ups 25,000 Inspection 50,000 Currently, overhead is applied using a predetermined overhead rate based upon budgeted direct labor hours, 50,000 direct labor hour are budgeted for next year? The company has been asked to submit a bid for a proposed job. The plant manager feels that obtaining this job would result in new business in future years. Usually, bids are based upon full manufacturing cost plus 30 percent. Estimates for the proposed job are as follows: Direct material Rs.2,500 Direct labor (750 hours) Rs.3,750 Number of machine hours 300 Number of material moves 8…arrow_forward
- Question No.7 Lyon Corporation has identified the following overhead costs and activity drivers for next year: Overhead Items Expected Costs Activity Drivers Expected Qty. Set-up costs Ordering costs Maintenance Power Rs.150,000 40,000 200,000 20,000 Number of set-ups Number of orders Machine hours Kilowatt hours 1,000 10,000 16,000 100,000 The following are two of the jobs completed during the year: Job XX Job YY Direct materials Rs.2,250 Rs.2,500 Direct labor Rs.3,000 Rs.1875 Units complete 375 300 Direct labor hours 90 110 Number of set-ups 6 8 Number of orders 8…arrow_forwardQuestion 20arrow_forwardQuestion 3 Teratoor Space provides interior design services in Bandar Teemor. It uses a job order costing system to accept orders from the customers. The manufacturing overhead cost is absorbed based on direct labour hour. The budgeted manufacturing overhead cost for the month of January is RM96,500. Management expects a total of 19,300 direct labour hours will be used. Prepare journal entries for the month of January: Jan Particular 13 19 22 26 30 Purchase 200 boxes of direct material from Bharatt on credit for RM4,200. 55 boxes of direct material was requested from the store for production. It was bought for RM11.50 per box. The decoration section has purchased 240 boxes indirect material which cost RM26.10 per box from Otara by cash. Direct labour cost paid for the month of January amounted to RM5,900. The depreciation cost of delivery van for the month of January is RM770. For the month of January, a total of 6,300 direct labour hours have been utilised.arrow_forward
- Question 11?arrow_forwardQuestion 21arrow_forward42 ABC Company uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of 2022, ABC estimated that manufacturing overhead for the year would be P4,800,000 and machine hours would be 80,000. The following information pertains to April 2022: Job #1 Job #2 Job #3 Work in process, April 1 P320,000 P520,000 P760,000 April production: Direct materials requisitioned 80,000 96,000 144,000 Direct labor costs 48,000 72,000 90,000 Machine hours 400 700 900 Actual overhead costs incurred during April amounted to P125,000. During April, jobs 1 and 3 were completed. Job 1 was delivered to a customer and an invoice for P800,000 was billed. Any over- or under-applied overhead is considered to be insignificant. How much is the cost of goods manufactured in April? How much is the adjusted gross profit in April?arrow_forward
- D Question 9 The Conrad Company uses a normal job-costing system at its New Brunswick plant. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool (the machining department overhead, allocated to jobs based on machine-hours). The 2020 budget and actual numbers for the plant are as follows: Tim 1 H Budgeted Actual Manufacturing Overhead $2,530.000 $2,400,000 Direct Manufacturing Labor Cost $1,560,000 $1.720,000 Direct Manufacturing Labor 270,000 280,000 Hours Machine-Hours 72,300 80,000 During February, the job-cost record for Job 494 contained the following: Direct Materials Used $14,500 Direct Manufacturing Labor Costs $27,800 270,000 280,000 Hours 72,300 80.000 Machine-Hours During February, the job-cost record for Job 494 contained the following: Direct Materials Used $14,500 Direct Manufacturing Labor $27,800 Costs Direct Manufacturing Labor- 1,250 Hours Machine-Hours 540 The total…arrow_forwardProvide solutionarrow_forward9arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Cost Classifications - Managerial Accounting- Fixed Costs Variable Costs Direct & Indirect Costs; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=QQd1_gEF1yM;License: Standard Youtube License