Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Chapter 7, Problem 66P
Chuck Moore supervises two consulting jobs for the firm of Price and Waters, LLP, which is a consulting firm that helps organizations become more efficient. One of the consulting jobs is for the U.S. Department of Defense and the other is for General Motors, Inc. Chuck received the monthly cost reports about three weeks after month-end. The General Motors job contained bad news. After getting up his nerve, Chuck called his boss the following week to pass on the bad news.
“The General Motors job is only half done, but we have already spent all of the $1 million that we expected to spend on that job,” he said. “However, we have spent only $500,000 of the $800,000 that we expected to spend on the U.S. Department of Defense job, even though we are 90 percent done with the work.”
His boss told Chuck, “Assign the rest of the costs needed to complete the General Motors job to your U.S. Department of Defense job. We’re under budget on that job and we get reimbursed for costs on government jobs.”
Required
- a. What should Chuck do?
- b. Does it matter that Chuck’s consulting firm is reimbursed for costs on the government jobs? Explain.
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Chapter 7 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 7 - What are characteristics of companies that are...Ch. 7 - Direct labor-hours and direct labor dollars are...Ch. 7 - What is the purpose of having two manufacturing...Ch. 7 - How does the accountant know what to record for...Ch. 7 - How is job costing in service organizations (for...Ch. 7 - What are the costs of a product using normal...Ch. 7 - Prob. 7RQCh. 7 - What are three common sources of improprieties in...Ch. 7 - In the context of job costing, what are projects?...Ch. 7 - Why do most companies use normal or standard...
Ch. 7 - Why is control of materials important from a...Ch. 7 - Worrying about the choice of an overhead...Ch. 7 - Prob. 13CADQCh. 7 - Interview the manager of a campus print shop or a...Ch. 7 - Would a dentist, an architect, a landscaper, and a...Ch. 7 - Consider two firms in the same industry. Is it...Ch. 7 - Prob. 17CADQCh. 7 - Assume that you have been asked to paint the...Ch. 7 - Prob. 19CADQCh. 7 - ABC Consultants works for only two clients: a...Ch. 7 - Prob. 21CADQCh. 7 - Assigning Costs to Jobs The following transactions...Ch. 7 - Assigning Costs to Jobs Sunset Products...Ch. 7 - Assigning Costs to Jobs Forest Components makes...Ch. 7 - Assigning Costs to Jobs Partially completed...Ch. 7 - Assigning Costs to Jobs Selected information from...Ch. 7 - Assigning Costs to Jobs Partially completed...Ch. 7 - Predetermined Overhead Rates Dixboro Company...Ch. 7 - Predetermined Overhead Rates Southern Rim Parts...Ch. 7 - Refer to the information in Exercise 7-29. Prepare...Ch. 7 - How much overhead was applied to each of the four...Ch. 7 - Refer to the information in Exercise 7-31. Prepare...Ch. 7 - Predetermined Overhead Rates Aspen Company...Ch. 7 - Prob. 34ECh. 7 - Applying Overhead Using a Predetermined Rate Marys...Ch. 7 - Applying Overhead Using a Predetermined Rate Turco...Ch. 7 - Calculating Over- or Underapplied Overhead Toms...Ch. 7 - Predetermined Overhead Rates: Ethical Issues...Ch. 7 - Compute the predetermined rate assuming that...Ch. 7 - Job Costing in a Service Organization At the...Ch. 7 - Job Costing in a Service Organization For August,...Ch. 7 - Job Costing in a Service Organization Allocation...Ch. 7 - Job Costing in a Service Organization TechMaster...Ch. 7 - Prob. 44ECh. 7 - Prob. 45ECh. 7 - Prob. 46PCh. 7 - Estimate Machine-Hours Worked from Overhead Data...Ch. 7 - Estimate Hours Worked from Overhead Data Capitol,...Ch. 7 - What will Wabash report as Cost of Goods Sold for...Ch. 7 - Assigning CostsMissing Data The following...Ch. 7 - Assigning Costs: Missing Data The following...Ch. 7 - Analysis of Overhead Using a Predetermined Rate...Ch. 7 - Analysis of Overhead Using a Predetermined Rate...Ch. 7 - Finding Missing Data A new computer virus...Ch. 7 - Cost Accumulation: Service Youth Athletic Services...Ch. 7 - Job Costs: Service Company For the month of July,...Ch. 7 - Job Costs in a Service Company On September 1, two...Ch. 7 - Tracing Costs in a Job Company The following...Ch. 7 - Cost Flows through Accounts Brighton Services...Ch. 7 - Show Flow of Costs to Jobs Kims Asphalt does...Ch. 7 - Reconstruct Missing Data A tornado struck the only...Ch. 7 - Find Missing Data IYF Corporation manufactures...Ch. 7 - Find Missing Data Accounting records for NIC...Ch. 7 - Incomplete Data: Job Costing Chelsea Household...Ch. 7 - Job Costing and Ethics Old Port Shipyards does...Ch. 7 - Job Costing and Ethics Chuck Moore supervises two...Ch. 7 - Job Costing and Ethics Global Partners is a...Ch. 7 - Prob. 68ICCh. 7 - What is the predetermined overhead rate for...
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