Don't provide answer in image format Currently, Bouwens uses a job costing system in which each month's production for each customer type is considered a "Job." Thus,every month, Bouwens starts and completes one job in B-155 and one job In B-159. (There is never any beginning or ending work Inprocess at Bouwens.) Recently, a dispute arose between Jack, the product manager for the military solvent, and Jill, the productmanager for the commercial solvent, over the proper costing system.Jack: It is ridiculous to use job costing for this. We are producing solvent. Everyone knows that the chemicals are the same. The factthe B-155 has high-cost labor is because all the senior employees want to work there. We could produce the same product with theemployees in B-159. We should be using process costing and consider all the production in both buildings for each month as thebatch.Jill: Jack, the fact is that the military requires us to use a special chemical, and their contracts require we keep track of the costs fortheir business. If we don't separate the costing, we won't know how profitable elther business is.The following is production and cost Information for a typical month, July.lv (B- C-S155)(B-159)10,0002,000$ 14,00030,000$ 40,000120,000$ 44,000 $ 160,000Units startedMaterials costConversion costTotalRequired:a. Compute the unit costs of M-Solv and C-Solv for July using the current system (job costing) at Bouwens.b. Compute the costs of M-Solv and C-Solv for July if Bouwens were to treat all production as the same (combining B-155 and B-159production).c. Recommend a costing method that best reflects the cost of producing M-Solv and C-Solv.d. For your recommended costing system, compute the cost of both M-Šolv and C-Solv for July.1. Compute the unit costs for materials and conversion costs separately.2. Then compute conversion costs for the factory.3. Now, compute the unit product cost.Total12,000$ 54,000150,000$ 204,000Complete this question by entering your answers in the tabs below.Req AReq BReq CReq D12. Then compute conversion costs for the factory.Note: Round "Unit cost" to 2 decimal places.Unit cost< Req D1Req D2Req D3Req D3 >

Name: Don't provide answer in image format Currently, Bouwens uses a job cos
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Description: Don't provide answer in image format Currently, Bouwens uses a job costing system in which each month's production for each customer type is considered a "Job." Thus,every month, Bouwens starts and completes one job in B-155 and one job In B-159. (Th

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Currently, Bouwens uses a job costing system in which each month's production for each customer type is considered a "job." Thus, every month, Bouwens starts and completes one job in B-155 and one job In B-159. (There is never any beginning or ending work In process at Bouwens.) Recently, a dispute arose between Jack, the product manager for the military solvent, and Jill, the product manager for the commercial solvent, over the proper costing system.

Currently, Bouwens uses a job costing system in which each month's production for each customer type is considered a "job." Thus, every month, Bouwens starts and completes one job in B-155 and one job In B-159. (There is never any beginning or ending work In process at Bouwens.) Recently, a dispute arose between Jack, the product manager for the military solvent, and Jill, the product manager for the commercial solvent, over the proper costing system.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter3: Accounting For Labor

Section: Chapter Questions

Problem 2MC: Huron Manufacturing Co. uses a job order cost system to cost its products. It recently signed a new...

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Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from any other, company accountant Susan Kalagnanam decided that it was best to use a job- order costing system to allocate costs to the different jobs. She decided to use construction labour-hours as the basis for overhead allocation. In December 2020, she estimated the following amounts for the year 2021: Direct materials Construction labour. Overhead Construction labour-hours Kalagnanam recorded the following for the first quarter of 2021 for the three jobs that the company started and completed during the quarter: Direct materials $13,395,200 8,165,000 8,847,700 460,000 Construction labour-hours $753,500 School Residential Cinema $904, 200 $1,356,300 36,800 16,100 62,100 Required: 1. Compute the cost of each job using the current system of cost allocation. (Round intermediate calculations to 2 decimal places.)
Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has four public relations specialists and office staff. At the beginning of the year, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,300 and a total of 7,200 billable hours for the year. The office and administrative costs were estimated at $676,000. What direct labor rate would Fogelin use for the cost of its specialists? (Round your answer to the nearest cent.)
Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from any other, company accountant Susan Kalagnanam decided that it was best to use a job- order costing system to allocate costs to the different jobs. She decided to use construction labour-hours as the basis for overhead allocation. In December 2020, she estimated the following amounts for the year 2021: Direct materials Construction labour Overhead Construction labour-hours Kalagnanam recorded the following for the first quarter of 2021 for the three jobs that the company started and completed during the quarter: Direct materials Construction labour-hours $13,395,200 8,165,000 8,847,700 460,000 Direct Material Construction Labour Overhead Total cost $ $753,500 School Residential $904,200 36,800 62,100 Required: 1. Compute the cost of each job using the current system of cost allocation. (Round intermediate…
ClearView, Inc. provides quarterly commercial window cleaning services for three high-rise commercial buildings, Sequoia, Tower Plaza, and Cornwall, and it uses a job costing system for determining the costs for completing each job. ClearView guarantees its customers' satisfaction and will return to re-clean windows that do not meet the customer's requirements at no additional charge to the customer. The job cost system does not capture any cost incurred by ClearView for return touchups. ClearView cleans each building on a square footage contract price, which includes the initial cleaning as well as all required touchups. Each year, the company generates about one-third of its total revenues and gross profits from each of the three buildings. The ClearView owner has observed that the buildings, however, require substantially different levels of support following the initial completion of jobs. The following data have been gathered: Support Activity Major touchups Minor touchups Driver…
Please I need help answering this problem O’Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O’Leary uses a normal job costing system. Direct labor at O’Leary is paid $30 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 69,600 56,600 Manufacturing overhead costs incurred Indirect labor $ 2,864,000 $ 2,264,000 Employee benefits 1,044,000 849,000 Supplies 696,000 566,000 Power…
Huron Manufacturing Co. uses a job order cost system to cost its products. It recently signed a new contract with the union that calls for time-and-a-half for all work over 40 hours a week and double-time for Saturday and Sunday. Also, a bonus of 1% of the employees earnings for the year is to be paid to the employees at the end of the fiscal year. The controller, the plant manager, and the sales manager disagree as to how the overtime pay and the bonus should be allocated. An examination of the first months payroll under the new union contract provisions shows the following: Analysis of the supporting payroll documents revealed the following: a. More production was scheduled each day than could be handled in a regular workday, resulting in the need for overtime. b. The Saturday and Sunday hours resulted from rush orders with special contract arrangements with the customers. The controller believes that the overtime premiums and the bonus should be charged to factory overhead and spread over all production of the accounting period, regardless of when the jobs were completed. The plant manager favors charging the overtime premiums directly to the jobs worked on during overtime hours and the bonus to administrative expense. The sales manager states that the overtime premiums and bonus are not factory costs chargeable to regular production but are costs created from administrative policies and, therefore, should be charged only to administrative expense. Required: 1. Evaluate each positionthe controllers, the plant managers, and the sales managers. If you disagree with all of the positions taken, present your view of the appropriate allocation. 2. Prepare the journal entries to illustrate the position you support, including the accrual for the bonus.
A&R Quality Advisors is a small consulting firm offering quality audits and advising services to small and mid-sized manufacturing firms. Quality audits entail reviewing, checking, and documenting quality practices within a firm. Quality advising entails making recommendations for new or revised quality practices. Other firms in the area offer one or both of these services, although the competition for quality audit jobs is stronger than for quality advising. In addition to senior executives, A&R employees are either staff or managers. Staff employees are usually younger with less experience. Managers, who oversee the staff on jobs, are more experienced. The average hourly wage is $60 for staff and $150 for managers. (Both staff and managers are paid an annual salary; these hourly costs are based on 2,000 average annual hours worked.) Staff are expected to spend at least 90 percent of their time on billable work. Because of administrative work associated with supervising the staff and…
O’Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O’Leary uses a normal job costing system. Direct labor at O’Leary is paid $20 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 67,600 54,600 Manufacturing overhead costs incurred Indirect labor $ 2,784,000 $ 2,184,000 Employee benefits 1,014,000 819,000 Supplies 676,000 546,000 Power 633,000 528,000 Heat and light 139,200 139,200 Supervision 777,990 658,050 Depreciation 2,000,500…
O’Leary Corporation manufactures special-purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O’Leary uses a normal job costing system. Direct labor at O’Leary is paid $28 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 69,200 56,200 Manufacturing overhead costs incurred Indirect labor $ 2,848,000 $ 2,248,000 Employee benefits 1,038,000 843,000 Supplies 692,000 562,000 Power 649,000 544,000 Heat and light 142,400 142,400 Supervision 782,630 662,850 Depreciation 2,048,500…
Speedy Auto Repairs uses job-order costing. Its direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics' hourly wages. Speedy's overhead costs include various items, such as the shop manager's salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated output Fixed overhead cost Variable overhead cost per direct labor-hour Required: 1. Compute the predetermined overhead rate. 2. During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information pertains to his job: Direct materials Direct labor cost Direct labor-hours used 36,000 $ 540,000 $ 1.00 $ 685 $ 153 7 Compute Mr. Wilkes' total job cost. 3. If Speedy…
Winkle, Kotter, and Zale is a small law firm that contains 10 partners and 12 support persons. The firm employs a job-order costing system to accumulate costs chargeable to each client, and it is organized into two departments-the Research and Documents Department and the Litigation Department. The firm uses predetermined overhead rates to charge the costs of these departments to its clients. At the beginning of the curent year, the firm's management made the following estimates for the year Department Research and Documents 20,400 9,300 $ 17,700 $ 430,100 $714,000 Litigation Research-hours Direct attorney-hours Materials and supplies Direct attorney cost Departmental overhead cost 16.400 $ 5,500 $ 799.400 $ 311,766 The predetermined overhead rate in the Research and Documents Department is based on research-hours, and the rate in the Litigation Department is based on direct attorney cost The costs charged to each client are made up of three elements: materials and supplies used,…
Winkle, Kotter, and Zale is a small law firm that contains 10 partners and 12 support persons. The firm employs a job-order costing system to accumulate costs chargeable to each client, and it is organized into two departments—the Research and Documents Department and the Litigation Department. The firm uses predetermined overhead rates to charge the costs of these departments to its clients. At the beginning of the current year, the firm's management made the following estimates for the year: Department Researchand Documents Litigation Research-hours 20,400 - Direct attorney-hours 9,300 16,400 Materials and supplies $ 17,700 $ 5,500 Direct attorney cost $ 430,100 $ 799,400 Departmental overhead cost $ 714,000 $ 311,766 The predetermined overhead rate in the Research and Documents Department is based on research-hours, and the rate in the Litigation Department is based on direct attorney cost. The costs charged…