COST ACCOUNTING
16th Edition
ISBN: 9781323169261
Author: Horngren
Publisher: PEARSON C
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Chapter 5, Problem 5.32P
| Other Direct Costs | Steger Enterprises | Bluestone Inc. |
| Research support labor | $36,000 | $ 77,000 |
| Computer time | 8,000 | 32,000 |
| Travel and allowances | 14,000 | 84,000 |
| Telephones/faxes | 5,000 | 24,000 |
| Photocopying | 6,000 | 14,000 |
| Total | $69,000 | $231,000 |
Peyton decides to calculate the costs of each job as if Wharton had used six direct-cost pools and a single indirect-cost pool. The single indirect-cost pool would have $200,000 of costs and would be allocated to each case using the professional labor-hours base.
- 1. Calculate the revised indirect-cost allocation rate per professional labor-hour for Wharton Associates when total indirect costs are $200,000.
Required
- 2. Compute the costs of the Steger Enterprises and Bluestone Inc. jobs if Wharton Associates had used its refined costing system with multiple direct-cost categories and one indirect-cost pool.
- 3. Compare the costs of Steger Enterprises and Bluestone Inc. jobs in requirement 2 with those in requirement 2 of Problem 5-31. Comment on the results
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Cost accumulation; assigning costs to jobs
The law firm of Taub & Lawson, LLP, currently has four cases in process. Following is information related to those cases as of the end of March:
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Taub & Lawson allocates overhead to cases based on a predetermined rate of $270 per estimated court hour. The charge for direct labor each hour is $342.
a. Determine the total cost assigned to each case as of March 31.
Case #1
Case #2
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Case #3
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Case #4
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Job Order Cost Accounting for a Service Company
I ONLY NEED PART D
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 60% of media purchases.
On August 1, the four advertising projects had the following accumulated costs:
August 1 Balances
Vault Bank
$72,500
Take Off Airlines
21,800
Sleepy Tired Hotels
50,800
Tastee Beverages
31,200
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During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:…
Job costing with single direct-cost category, single indirect-cost pool: Law
firm, Bradley Associates, is a recently founded law partnership. Emmit
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tense phone call with Martin Omar, president of Campa Coal. Omar strongly
complained about the price Bradley charged for some legal work done for
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ISL Edith's Glass), which was very pleased with both the quality of the work
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single direct-cost category (professional labor-hours) and a single indirect-
cost pool (general support). Indirect costs are allocated to cases on the basis
of professional labor-hours per case. The job files show the following:
Campa Coal St Edith's Glass
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Chapter 5 Solutions
COST ACCOUNTING
Ch. 5 - What is broad averaging, and what consequences can...Ch. 5 - Why should managers worry about product...Ch. 5 - What is costing system refinement? Describe three...Ch. 5 - What is an activity-based approach to designing a...Ch. 5 - Describe four levels of a cost hierarchy.Ch. 5 - Why is it important to classify costs into a cost...Ch. 5 - What are the key reasons for product cost...Ch. 5 - Prob. 5.8QCh. 5 - Department indirect-cost rates are never...Ch. 5 - Prob. 5.10Q
Ch. 5 - Prob. 5.11QCh. 5 - Prob. 5.12QCh. 5 - Activity-based costing is the wave of the present...Ch. 5 - Increasing the number of indirect-cost pools is...Ch. 5 - The controller of a retail company has just had a...Ch. 5 - Conroe Company is reviewing the data provided by...Ch. 5 - Prob. 5.17MCQCh. 5 - Cost hierarchy. Roberta, Inc., manufactures...Ch. 5 - ABC, cost hierarchy, service. (CMA, adapted)...Ch. 5 - Alternative allocation bases for a professional...Ch. 5 - Plant-wide, department, and ABC Indirect cost...Ch. 5 - Plant-wide, department, and activity-cost rates....Ch. 5 - ABC, process costing. Sander Company produces...Ch. 5 - Department costing, service company. DLN is an...Ch. 5 - Activity-based costing, service company....Ch. 5 - Activity-based costing, manufacturing. Decorative...Ch. 5 - ABC, retail product-line profitability. Fitzgerald...Ch. 5 - Prob. 5.28ECh. 5 - Activity-based costing. The job-costing system at...Ch. 5 - ABC, product costing at banks,...Ch. 5 - Problems 5-31 Job costing with single direct-cost...Ch. 5 - Job costing with multiple direct-cost categories,...Ch. 5 - Job costing with multiple direct-cost categories,...Ch. 5 - First-stage allocation, time-driven activity-based...Ch. 5 - First-stage allocation, time-driven activity-based...Ch. 5 - Department and activity-cost rates, service...Ch. 5 - Activity-based costing, merchandising. Pharmahelp,...Ch. 5 - Choosing cost drivers, activity-based costing,...Ch. 5 - ABC, health care. Crosstown Health Center runs two...Ch. 5 - Unused capacity, activity-based costing,...Ch. 5 - Unused capacity, activity-based costing,...Ch. 5 - ABC, implementation, ethics. (CMA, adapted) Plum...Ch. 5 - Activity-based costing, activity-based management,...
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