8th Edition

ISBN: 9781266376771

Author: BREWER

Publisher: MCG

Concept explainers

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 …

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 compari…

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Textbook Question

Chapter 2, Problem 19P

Multiple Predetermined Overhead Rates; Applying Overhead.
High Desert Potteryworks makes a variety of pottery products that it sells to retailers. The company uses a job-order costing system in which departmental predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Molding Department is based on machine-hours, and the rate in the Painting Department is based on direct labor-hours. At the beginning of the war, the company provided the following estimates:
Chapter 2, Problem 19P, Multiple Predetermined Overhead Rates; Applying Overhead. High Desert Potteryworks makes a variety , example 1
Job 205 was started on August 1 and completed on August 10. The company’s cost records show the fo11oing information concerning the job:

Required:
1. Compute the predetermined overhead rates used in the Molding Department and the Painting Department.
2. Compute the total overhead cost applied to Job 205.
3. That would be the total manufacturing cost recorded for Job 205? If the job contained 50 units, what would be the unit product cost?

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Chapter 2, Problem 18P

Chapter 2, Problem 20P

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Chapter 2 Solutions

INTRO MGRL ACCT LL W CONNECT

Ch. 2 - What is job-order costing?Ch. 2 - What is absorption costing?Ch. 2 - What is normal costing?Ch. 2 - How is the unit product cost of a job calculated?Ch. 2 - Explain the four-step process used to compute a...Ch. 2 - What is the purpose of the job cost sheet in a...Ch. 2 - Explain why some production costs must be assigned...Ch. 2 - Why do companies use predetermined overhead rates...Ch. 2 - What factors should be considered in selecting an...Ch. 2 - If a company fully allocates all of its overhead...

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Solution Summary: The author explains the calculation of the pre-determined overhead rate in Molding and Painting Department and the manufacturing cost of Job 205.

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Chapter 2 Solutions