Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 4, Problem 12P
Determine over-and underbillings for a company with the following information:
Job Number: 318
Job Name: Mountain Peak Office Remodel
Current Contract Amount: $256,852
Total Estimated Cost at Completion: $225,236
Actual Costs to Date: $202,138
Total Billed: $252,253
Job Number: 319
Job Name: East Street Restaurant
Current Contract Amount: $350,199
Total Estimated Cost at Completion: $310,564
Actual Costs to Date: $152,364
Total Billed: $178,256
Job Number: 320
Job Name: Market Street Warehouse
Current Contract Amount: $55,123
Total Estimated Cost at Completion: $45,224
Actual Costs to Date: $5,211
Total Billed: $5,500
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please present solution in an excel accompanied with explanations. Thank you so much!
PROBLEM:
Data table
1. Number of jobs billed
2. Selling price per job
3. Engineering labor-hours
4. Cost per engineering labor-hour
5. Engineering support capacity (number of jobs the firm can do)
6. Total cost of engineering support (space rent, equipment, etc.)
7. Engineering support-capacity cost per job
$
$
$
2019
300
3,400 $
26,000
32 $
650
175,500 $
270 $
2020
600
3,000
28,000
33
650
182,000
280
answer with working for clear understanding
Bennette Corporation has provided the following data concerning its overhead costs for the coming year:
Wages and salaries
$ 450,000
Depreciation
175,000
Rent
195,000
Total
$ 820,000
The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year:
Activity Cost Pool
Total Activity
Assembly
35,000
labor-hours
Order processing
450
orders
Other
Not applicable
The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of idle capacity and organization-sustaining costs.
The distribution of resource consumption across activity cost pools is given below:
Activity Cost Pools
Total
Assembly
Order Processing
Other
Wages and salaries
30%
25%
45%
100%
Depreciation
15%
45%
40%
100%
Rent
35%
30%
35%
100%
The activity rate for the Order Processing activity cost pool is closest to:
Multiple…
Chapter 4 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 4 - Define committed costs and provide two examples of...Ch. 4 - Why is labor seldom a committed cost?Ch. 4 - Prob. 3DQCh. 4 - What are overbillings and how do they occur?Ch. 4 - Prob. 5DQCh. 4 - What are the six key principals of internal...Ch. 4 - What should you look for in a construction...Ch. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - Prob. 10P
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
- Please dont provide solution image based thanxarrow_forwardSarah Duterte Construction Firm started work on three job sites during the current year. The following data was gathered in relation to the three jobs sites construction: Est. Cost to Billings Complete Site Contract Cost Incurred on Collections Price Contract 500,000 400,000 365,000 100,000 100,000 500,000 100,000 A В 700,000 250,000 400,000 100,000 50,000 C Requirements: 1. If the outcome of all the projects can be estimated reliably, what amount of income should be reported for the current year? 2. If the outcome of all the projects can be estimated reliably, what would be the amount of Construction in Progress to be reported in the Statement of Financial Position for the current year?arrow_forwardRobin Company reported the following costs for the current month: Direct materials used Direct labor Sales salaries Indirect labor Production manager's salary Marketing costs Factory lease What are Robin's prime costs? Multiple Choice O O O $60,800 $56,000 $75,200 $65.600 $ 24,000 36,800 19,200 4,800 9,600 14,400 6,400arrow_forward
- Problem 3. The Noka Construction Co. started work on three job sites during the current year. Data relating to the three jobs are given below: Site Contract Price Cost Incurred Est. Cost to Complete Billing on Contract Collection contract Cavite 500, 000 375,000 P500, 000 400, 000 Rizal 700, 000 100, 000 400, 000 100, 000 50, 000 Bulacan 250, 000 100, 000 100, 000 What amount of income should be reported for the current year if the zero profit method is used for all contracts? What amount of income should be reported for the current year if the percentage of completion method is used for all contracts? What would be the amount of construction progress to be reported on the year-end balance sheet if the percentage of completion method is used?arrow_forwardProblem 3. The Noka Construction Co. started work on three job sites during the current year. Data relating to the three jobs are given below: Site Contract Price Cost Incurred Est. Cost to Complete Billing on Contract Collection contract Cavite 500, 000 375,000 P500, 000 400, 000 100, 000 100, 000 Rizal 700, 000 400, 000 100, 000 50, 000 Bulacan 250, 000 100, 000 What would be the amount of cost of constructions to be reported on the year-end balance sheet if the percentage of completion method is used?arrow_forwardCalculate the overhead allocated to each customer using the simple costing method. (Round your answers to the nearest whole dollar.arrow_forward
- Using job order costing in a service company Chance Realtors, a real estate consulting firm, specializes in advising companies on potential new plant sites. The company uses a job order costing system with a predetermined overhead allocation rate, computed as a percentage of direct labor costs. At the beginning of 2018, managing partner Andrew Chance prepared the following budget for the year: Maynard Manufacturing, Inc. is inviting several consultants to bid for work. Andrew Chance wants to submit a bid. He estimates that this job will require about 180 direct labor hours. Requirements Compute Chance Realtors’ (a) hourly direct labor cost rate and predetermined overhead allocation rate. Compute the predicted cost of the Maynard Manufacturing job. If Chance wants to earn a profit that equals 25% of the job’s cost, how much should he bid for the Maynard Manufacturing job?arrow_forwardNote: The 100 nonroutine jobs are included in the total of 500 jobs. Both nonroutine jobs and routine jobs require estimating and setup. Costs for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance $ 414,000 808,000 94,000 61,000 310,000 510,000 $ 2,197,000 Total cost Distribution of Resource Consumption Across Activities Estimating Removing and Job Setup 10% TTT11 Working on Nonroutine Total Jobs 30% Asbestos Other Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance 50% 10% 100% 70% 0% 30% 0% 100% 50% 10% 15% 25% 100% 70% 20% 10% 0% 100% 10% 35% 25% 30% 100% 25% 0% 60% 15% 100% Required: 1. Perform the first-stage allocation of costs to the activity cost pools. Prev 1 of 1 Nextarrow_forwardHicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. Lumber used to construct decks ($12.00 per square foot) Carpenter labor used to construct decks ($10 per hour) Construction supervisor salary ($45,000 per year) Depreciation on tools and equipment ($6,000 per year) Selling and administrative expenses ($35,000 per year) Rent on corporate office space ($34,000 per year) Nails, glue, and other materials required to construct deck (varies per job)arrow_forward
- The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?arrow_forwardJob order cost accounting for a service company 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 65% of media purchases. On August 1, the four advertising projects had the following accumulated costs: During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: At the end of August, both the Vault Bank and Take Off Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account. Journalize the summary entry to record each of the following for the month: A. Direct labor costs B. Media purchases C. Overhead applied D. Completion of Vault Bank and Take Off Airlines campaignsarrow_forwardEvent Forms expects $120,000 in overhead during the next year. It doesn't know whether it should apply overhead on the basis of its anticipated direct labor hours of 6,000 or its expected machine hours of 5,000. What would be the product cost under each predetermined allocation rate if the last job incurred $3,500 in direct material cost, 55 direct labor hours, and 55 machine hours? Wages are paid at $17 per hour.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
What is Cost Allocation? Definition & Process; Author: FloQast;https://www.youtube.com/watch?v=hLhvvHvZ3JM;License: Standard Youtube License