Sutton Construction Inc. is a privately held, family-founded corporation that builds single- and multiple-unit housing. Most projects Sutton Construction undertakes involve the construction of multiple units. Sutton Construction has adopted a job-order costing system for determining the cost of each unit. The costing system is fully computerized. Each project's costs are divided into the following five categories : 1. General conditions, including construction site utilities, project insurance permits and licenses, architect's fees, decorating, field office salaries, and cleanup costs.     2. Hard costs, such as subcontractors, direct materials, and direct labor.      3. Finance costs, including title and recording fees, inspection fees, and taxes and discounts on mortgages.     4. Land costs, which refer to the purchase price of the construction site.     5. Marketing costs, such as advertising, sales commissions, and appraisal fees.     Recently, Sutton Construction purchased land for the purpose of developing 20 new single-family houses. The cost of the land was $250,000. Lot sizes vary from 1/4 to 1/2 acre. The 20 lots occupy a total of eight acres. General conditions costs for the project totaled $120,000. This $120,000 is common to all 200 units that were constructed on the building site. Job 3, the third house built in the project, occupied a 1/4-acre lot and had the following hard costs : Direct materials    $     8,000 Direct labor    $     6,000 Subcontractor    $   14,000   1. Identify all production costs that are directly traceable to Job 3. Are all remaining production costs equivalent to overhead found in a manufacturing firm? Are there nonproduction costs that are directly traceable to the housing unit? Which ones? 2. Develop a job-order cost sheet for Job 3. What is the cost of building this house? Did you include finance and marketing costs in computing the unit cost? Why or why not? How did you determine the cost of land for Job 3? 3. Which of the five cost categories corresponds to overhead? Do you agree with the way in which this cost is allocated to individual housing units? Can you suggest a different allocation method? 4. Calculate the selling price of Job 3. Calculate the profit made on the sale of this unit.

1. One of the products Al-Can Products, Inc. manufactures for their rest stops are benches. Perform the following tasks to classify and record common manufacturing costs. 2. The production of the rest stop benches requires the following costs. For each cost, determine how the cost should be classified by placing an X in the appropriate column. Wages of factory supervisor Rent of company headquarters Lumber to manufacture benches Factory property taxes Bench inspector wages Wages for the marketing manager Cleaning supplies to maintain equipment Wages of production employees Stain for the benches Direct Materials Direct Factory Labor Overhead None

Time Clock Shop manufactures clocks on an automated assembly line. It utilizes two cost categories: direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of production, while conversion costs are allocated evenly throughout production. The company uses weighted-average costing. Data for the Assembly Department are given in the table. (Click the icon to view the table.) What is the total amount debited to the work-in-process account during the month of June at Time Clock Shop? A. $450,000 B. $2,270,000 C. $3,250,000 D. $2,000,000 E. $2,450,000 Table Work in process, beginning inventory Direct materials (100% complete) Conversion costs (50% complete) Units started during June Work in process, ending inventory Direct materials (100% complete) Conversion costs (75% complete) Work in process, beginning inventory Direct materials Conversion costs Direct materials costs added during…

Highland Publishing Company is a large organization offering a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is allocated based on machine-hours. Department Total Labor-Hours Square Feet of Space Occupied Number of Employees Machine-Hours Direct Labor-Hours Personnel 16,400 12,600 27     Custodial Services 8,600 3,900 49     Maintenance 14,300 10,200 65     Printing 30,600 40,300 109 162,000 13,000 Binding 101,000 21,000 307 41,000 80,000   170,900 88,000 557 203,000 93,000 Budgeted overhead costs in each department for the current year are shown below: Personnel $ 320,000 Custodial Services 65,300 Maintenance 93,300…

Identifying Cost Drivers. Palisades Company identified the activities listed in the following as being most important (step 1 and step 2 of activity-based costing), and it formed cost pools for each activity: 1. Purchasing raw materials 2. Inspecting raw materials 3. Storing raw materials 4. Maintaining production equipment 5. Setting up machines to produce batches of product 6. Testing finished products Required: Perform step 3 of the activity-based costing process by identifying a possible cost driver for each activity.

Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has to overhead of $132,720. Carlise has identified the following information about its overhead activity cost pools and the two product lines: Quantity/Amount Consumed by Indoor Line Quantity/Amount Consumed by Outdoor Line Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Required: 1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Indoor Model Outdoor Model Total Cost Assigned to Pool $21, 120 $71,760 4,600 inspections $39,840 29,000 machine hours 19,000 machine hours 600 moves 500 moves 5,800 inspections Overhead Assigned

Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. A. Wood used to produce desks ($125.00 per desk) B. Production labor used to produce desks ($15 per hour) C. Production supervisor salary ($45,000 per year) D. Depreciation on factory equipment ($60,000 per year) E. Selling and administrative expenses ($45,000 per year) F. Rent on corporate office ($44,000 per year) G. Nails, glue, and other materials required to produce desks (varies per desk) H. Utilities expenses for production facility I. Sales staff commission (5% of gross sales)

Carter, Incorporated, produces two products, Product A and Product B. Carter uses a traditional volume-based costing system in which direct labor hours are the allocation base. Carter is considering switching to an ABC system by splitting its manufacturing overhead cost across three activities: Design, Production, and Inspection. The cost of each activity and usage of the cost drivers are as follows: Activity Pool (Driver) Design (engineering hours) Production (direct labor hours) Inspection (batches) Cost of Pool $ 300,000 500,000 200,000 300,000 100 Carter manufactures 10,000 units of Product A and 7,500 units of Product B per month. Required: a. Calculate the predetermined overhead rate under the traditional costing system. b. Calculate the activity rate for Design. c. Calculate the activity rate for Machining. d. Calculate the activity rate for Inspection. e. Calculate the indirect manufacturing costs assigned to each unit of Product A under the traditional costing system. f.…

Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $143,484 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Quantity or Amount Consumed by Basic Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Required 1 Complete this question by entering your answers in the tabs below. Basic Model Luxury Model Required 2 Required 3 Required 4 Required: 1. Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. 2. Calculate the activity rates for each activity pool in Hazelnut's ABC system. 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. 4. Determine the amount of overhead Hazelnut will assign…

For each of the following costs, identify whether it is a Fixed, Variable or Both: Cost Wages of assembly-line workers Depreciation-office equipment Glue and fasteners Delivery costs Raw materials handling costs Salary of marketing manager Production run setup costs Plant utilities Electricity cost of manufacturing plant Research and development expenses Type