Horngren's Accounting, The Financial Chapters, Student Value Edition (11th Edition)
11th Edition
ISBN: 9780133876352
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 19, Problem P19.40CP
Accounting for manufacturing
This problem continues the Daniels Consulting situation from Problem P18-42 of Chapter 18. Daniels Consulting uses a job order costing system in which each client is a different job. Daniels assigns direct labor, meal per diem, and travel costs directly to each job. It allocates indirect
At the beginning of 2018, the controller prepared the following budget:
| Direct labor hours (professionals) | 6,250 hours |
| Direct labor costs (professionals) | $ 1,100,000 |
| Support staff salaries | 90,000 |
| Computer leases | 57,000 |
| Office supplies | 40,000 |
| Office rent | 55,000 |
In November 2018, Daniels served several clients. Records for two clients appear here:
Requirements
- Compute Daniels's predetermined overhead allocation rare for 2018.
- Compute the total cost of each job.
- If Daniels wants to earn profits equal to 25% of sales revenue, what fee should it charge each of these two clients?
- Why does Daniels assign costs to jobs?
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Accounting for manufacturing overhead
This problem continues the Piedmont Computer Company situation from Chapter 16 Piedmont Computer Company uses a job order costing system in which each batch manufactured is a different job. Piedmont Computer Company assigns direct materials and direct labor to each job. The company assigns labor costs at $25 per hour. It allocates manufacturing overhead to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs.
At the beginning of 2020, the controller prepared the following budget;
In November 2020, Piedmont Computer Company worked on several jobs, Records for two jobs appear here:
Requirements
Compute Piedmont Computer Company’s predetermined overhead allocation rate for 2020.
Compute the total cost of each job.
Why does Piedmont assign costs to jobs?
Peaton Computer Company uses a job order costing system in which each batch manufactured is a different job. Peaton Computer Company assigns direct materials and direct labor to each job. The company assigns labor costs at $2
overhead to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. At the beginning of 2024, the controller prepared the following budget:
(Click the icon to view the budget.)
In November 2024, Peaton Computer Company worked on several jobs. Records for two jobs appear here:
(Click the icon to view the records for the two jobs.)
Read the requirements.
Data table
Requirement 1. Compute Peaton Computer Company's predetermined overhead (OH) allocation rate for 2024.
Estimated OH costs
Estimated direct labor hours
610000
1220000
Requirement 2. Compute the total cost of each job.
Job 721
Job 722
Direct materials
20000
1900
Direct labor
17710
2760
Overhead allocation rate
8855.00
1380
46565
6040
Total cost
Requirement 3.…
Crow Design is an interior design firm. The firm uses a job cost system in which each client is a different "job."Crow Design traces direct labor, licensing costs, and travel costs directly to each job (client). It allocates indirect costs to jobs based on a predetermined indirect cost allocation rate computed as a percentage of direct labor costs.
At the beginning of the current year, managing partner
Brenna Gladstone prepared the following budget:
Direct labor hours (professional). . . . .
8,000 hours
Direct labor costs (professional). . . . .
$1,600,000
Support staff salaries. . . . . . . . . . . . . . .
$190,000
Computer lease payments. . . . . . . . . . .
$41,000
Office supplies. . . . . . . . . . . . . . . . . . . . .
$23,000
Office rent. . . . . . . . . . . . . . . . . . . . . . . . .
$66,000
Later that same year in November,
Crow Design served several clients. Records for two clients appear here:
Fancy Food
AllFood.com
Direct labor hours. . . . .
680…
Chapter 19 Solutions
Horngren's Accounting, The Financial Chapters, Student Value Edition (11th Edition)
Ch. 19 - Prob. 1QCCh. 19 - When a manufacturing company uses direct...Ch. 19 - When a manufacturing company uses indirect...Ch. 19 - When a manufacturing company uses direct labor, it...Ch. 19 - What is Gell's predetermined overhead allocation...Ch. 19 - What is Gell's actual manufacturing overhead cost?...Ch. 19 - How much manufacturing overhead would Gell...Ch. 19 - What entry would Gell make to adjust the...Ch. 19 - A manufacturing company completed work on a job....Ch. 19 - Prob. 10QC
Ch. 19 - Why do managers need to know the cost of their...Ch. 19 - What types of companies use job order costing...Ch. 19 - What types of companies use process costing...Ch. 19 - What is the purpose of a job cost record?Ch. 19 - Explain the difference between cost of goods...Ch. 19 - A job was started on May 15, completed on June 27,...Ch. 19 - Give the journal entry for raw materials purchased...Ch. 19 - What is the purpose of the raw materials...Ch. 19 - How does the use of direct and indirect materials...Ch. 19 - Give the journal entry for direct and indirect...Ch. 19 - Give five examples of manufacturing overhead...Ch. 19 - What is the predetermined overhead allocation...Ch. 19 - What is an allocation base? Give some examples.Ch. 19 - How is manufacturing overhead allocated to jobs?Ch. 19 - A completed job cost record shows the unit cost of...Ch. 19 - Explain the journal entry for the allocation of...Ch. 19 - Give the journal entry for the completion of a...Ch. 19 - Why does the sale of a completed job require two...Ch. 19 - Prob. 19RQCh. 19 - If a company incurred $5,250 in actual overhead...Ch. 19 - Refer to the previous question. Give the journal...Ch. 19 - Explain the terms accumulate, assign, allocate,...Ch. 19 - Why would the manager of a service company need to...Ch. 19 - How is the predetermined overhead allocation rate...Ch. 19 - Distinguishing between job order costing and...Ch. 19 - Prob. S19.2SECh. 19 - Prob. S19.3SECh. 19 - Prob. S19.4SECh. 19 - Prob. S19.5SECh. 19 - Prob. S19.6SECh. 19 - Prob. S19.7SECh. 19 - Prob. S19.8SECh. 19 - Prob. S19.9SECh. 19 - Prob. S19.10SECh. 19 - Prob. S19.11SECh. 19 - Prob. S19.12SECh. 19 - Prob. S19.13SECh. 19 - Prob. S19.14SECh. 19 - Distinguishing between job order costing and...Ch. 19 - Defining terminology Learning Objectives 1,2 Match...Ch. 19 - Prob. E19.17ECh. 19 - Prob. E19.18ECh. 19 - Prob. E19.19ECh. 19 - Prob. E19.20ECh. 19 - Prob. E19.21ECh. 19 - Prob. E19.22ECh. 19 - Prob. E19.23ECh. 19 - Prob. E19.24ECh. 19 - Prob. E19.25ECh. 19 - Prob. E19.26ECh. 19 - Prob. E19.27ECh. 19 - Prob. P19.28APGACh. 19 - Prob. P19.29APGACh. 19 - Prob. P19.30APGACh. 19 - Prob. P19.31APGACh. 19 - Prob. P19.32APGACh. 19 - Prob. P19.33APGACh. 19 - Prob. P19.34BPGBCh. 19 - Prob. P19.35BPGBCh. 19 - Prob. P19.36BPGBCh. 19 - Prob. P19.37BPGBCh. 19 - Prob. P19.38BPGBCh. 19 - Prob. P19.39BPGBCh. 19 - Accounting for manufacturing overhead This problem...Ch. 19 - Prob. 19.1DCCh. 19 - Prob. 19.1FC
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