Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 17, Problem 27E
1.
To determine
Compute Company CR’s (a) hourly direct labor cost rate and (b) predetermined
2.
To determine
Compute the predicted cost of the Incorporation MM.
3.
To determine
Identify the amount that should bid for Incorporation MM.
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Peters 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 2024, managing partner Jane Peters prepared the following budget for the year:
(Click the icon to view the prepared budget.)
(Click the icon to view additional information.)
Read the requirements.
Requirement 1. Compute Peters Realtors' (a) hourly direct labor cost rate and (b) predetermined overhead allocation rate.
Begin with (a) hourly direct labor cost rate.
Direct labor
cost rate
per hour
Data table
Direct labor hours (professionals)
Direct labor costs (professionals)
Office rent
Support staff salaries
Utilities
Print
$
Done
12,750 hours
2,550,000
380,000
1,397,500
390,000
X
Simms Realtors, a real state consulting firm, specializes in advising companies on potential new plant sites. The company uses a job order costing system with a predetermined indirect cost allocation rate, computed as a percentage of direct labor costs. At the beginning of 2011, managing partner Debra Simms prepared the following budget for the year:
Direct labor hours (professional) 14,000 hours
Direct labor costs (professional) $2,150,000
Office rent 260,000
Support staff sallaries 850,000
Utilities 350,000
Maynard Manufacturing, Inc. is inviting several consultants to bid for work. Debra Simms estimated that this Job will require about 260 direct labor hours.
Compute Simms' Relators' indirect cost allocation rate.
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…
Chapter 17 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Prob. 6TICh. 17 - Record the following journal entries for Smith...Ch. 17 - Prob. 8TICh. 17 - Prob. 9TICh. 17 - Prob. 10TI
Ch. 17 - Prob. 11TICh. 17 - Prob. 12TICh. 17 - The following information pertains to Smith...Ch. 17 - Prob. 14TICh. 17 - Prob. 15TICh. 17 - Prob. 16TICh. 17 - Wesson Company is a consulting firm. The firm...Ch. 17 - Prob. 18TICh. 17 - Would an advertising agency use job order or...Ch. 17 - Prob. 2QCCh. 17 - When a manufacturing company uses indirect...Ch. 17 - When a manufacturing company uses direct labor, it...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - A manufacturing company completed work on a job....Ch. 17 - For which of the following reasons would David...Ch. 17 - Why do managers need to know the cost of their...Ch. 17 - What types of companies use job order costing...Ch. 17 - What types of companies use process costing...Ch. 17 - What is the purpose of a job cost record?Ch. 17 - Explain the difference between cost of goods...Ch. 17 - A job was started on May 15, completed on June 27,...Ch. 17 - Give the journal entry for raw materials purchased...Ch. 17 - What is the purpose of the raw materials...Ch. 17 - How does the use of direct and indirect materials...Ch. 17 - Prob. 10RQCh. 17 - Give five examples of manufacturing overhead...Ch. 17 - What is the predetermined overhead allocation...Ch. 17 - What is an allocation base? Give some examples.Ch. 17 - How is manufacturing overhead allocated to jobs?Ch. 17 - A completed job cost record shows the unit cost of...Ch. 17 - Prob. 16RQCh. 17 - Give the journal entry for the completion of a...Ch. 17 - Prob. 18RQCh. 17 - Explain the difference between underallocated...Ch. 17 - If a company incurred 5,250 in actual overhead...Ch. 17 - Prob. 21RQCh. 17 - Explain the terms accumulate, assign, allocate,...Ch. 17 - Prob. 23RQCh. 17 - Prob. 24RQCh. 17 - Would the following companies most likely use job...Ch. 17 - Prob. 2SECh. 17 - Analyze the following T-accounts to determine the...Ch. 17 - Prob. 4SECh. 17 - Oak Outdoor Furniture manufactures wood patio...Ch. 17 - Job 303 includes direct materials costs of 550 and...Ch. 17 - Calculating predetermined overhead allocation...Ch. 17 - Lincoln Company completed jobs that cost 38,000 to...Ch. 17 - Columbus Enterprises reports the following...Ch. 17 - The T-account showing the manufacturing overhead...Ch. 17 - Adjusting Manufacturing Overhead Justice Companys...Ch. 17 - Prob. 12SECh. 17 - Prob. 13SECh. 17 - Prob. 14SECh. 17 - Prob. 15ECh. 17 - Defining terminology Match the following terms to...Ch. 17 - Prob. 17ECh. 17 - Goldenrod Company makes artificial flowers and...Ch. 17 - Selected cost data for Classic Print Co. are as...Ch. 17 - Prob. 20ECh. 17 - Prob. 21ECh. 17 - Prob. 22ECh. 17 - Jordan Company has the following information for...Ch. 17 - Journalize the following transactions for Marges...Ch. 17 - Prob. 25ECh. 17 - Analyze the following T-accounts, and determine...Ch. 17 - Prob. 27ECh. 17 - Clement Manufacturing makes carrying cases for...Ch. 17 - Ki Technology Co. manufactures DVDs for computer...Ch. 17 - Superior Construction, Inc. is a home builder in...Ch. 17 - Accounting for manufacturing overhead Prestige...Ch. 17 - Mighty Stars produces stars for elementary...Ch. 17 - Bluebird Design, Inc. is a Web site design and...Ch. 17 - Sutherland Manufacturing makes carrying cases for...Ch. 17 - Ye Technology Co. manufactures DVDs for computer...Ch. 17 - Meadow Construction, Inc. is a home builder in...Ch. 17 - Accounting for manufacturing overhead Elegant...Ch. 17 - Hero Stars produces stars for elementary teachers...Ch. 17 - Skylark Design, Inc. is a Web site design and...Ch. 17 - Accounting for manufacturing overhead This problem...Ch. 17 - Granite Construction Incorporated is a major...Ch. 17 - Hiebert Chocolate, Ltd. is located in Memphis. The...Ch. 17 - Prob. 1FC
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