Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 2, Problem 2.4BYP
Communication Activity
You are the
Nancy Kopay is a customer who recently had custom cabinets installed. Along with her check in payment for the work done, she included a letter. She thanked the company for including the detailed cost information but questioned why overhead was estimated She stated that she would be interested in knowing exactly what costs were included in overhead, and she thought that other customers would, too.
Instructions
Prepare a letter to Ms. Kopay (address: 123 Cedar Lane, Altoona. KS 66651) and tell her why you did not send her information on exact costs of overhead included in her job. Respond to her suggestion that you provide this information.
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Job Cost Sheets
A job cost sheet is used to accumulate the following costs for each job: direct materials, direct labor and overhead. It is an internal document, so the format varies by company. Some companies prefer a detailed cost sheet that shows the details for direct materials (such as quantity, type, and requisition numbers for each material used) and details for direct labor (such as hours and wage rate for each employee who worked on the job). Other companies prefer a summary showing a total for direct materials and a total for direct labor. Overhead applied is reported on all job cost sheets. Recall that firms use normal costing to determine unit cost. Normal costing requires the use of predetermined overhead rates, which are calculated as follows:
Predetermined Overhead Rate =
Estimated Annual Overhead
Estimated Cost Driver
APPLY THE CONCEPTS: Complete the job cost sheets for In the Doghouse Company
In the Doghouse Company builds doghouses. They have three sizes:…
Using job order costing in a service company
Bluebird Design, Inc. is a Web site design and consulting firm. The firm uses a job order costing system in which each client is a different job. Bluebird Design assigns direct labor, licensing costs, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs.
At the beginning of 2018, managing partner Sally Simone prepared the following budget estimates:
In November 2018, Bluebird Design served several clients. Records for two clients appear here:
Requirements
Compute Bluebird Designs direct labor rate and its predetermined overhead allocation rate for 2018.
Compute the total cost of each job.
If Simone wants to earn profits equal to 50% of service revenue, what fee should she charge each of these two clients?
Why does Bluebird Design assign costs to jobs?
create a company and a product and then a unique JOB COST RECORD. do this by Createing a brief explanation of your company and product. and Create a JOB COST RECORD for one job in your company including Direct Materials, Direct Labor and Manufacturing Overhead and correct total costs.
Chapter 2 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 2 - (a) Mary Barett is not sure about the difference...Ch. 2 - Prob. 2QCh. 2 - What type of industry is likely to use a job order...Ch. 2 - What type of industry is likely to use a process...Ch. 2 - Your roommate asks your help in understanding the...Ch. 2 - Prob. 6QCh. 2 - What source documents are used in accumulating...Ch. 2 - Entries to Manufacturing Overhead normally are...Ch. 2 - Stan Kaiser is confused about the source documents...Ch. 2 - What is the purpose of a job cost sheet?
Ch. 2 - Indicate the source documents that are used in...Ch. 2 - Explain the purpose and use of a materials...Ch. 2 - Sam Bowden believes actual manufacturing overhead...Ch. 2 - What elements are involved in computing a...Ch. 2 - Prob. 15QCh. 2 - Jane Neff believes that the cost of goods...Ch. 2 - Matt Litkee is confused about under- and...Ch. 2 - At the end of the year, under- or overapplied...Ch. 2 - Dicker Company begins operations on January 1....Ch. 2 - During January, its first month of operations,...Ch. 2 - In January, Dicker Company requisitions raw...Ch. 2 - Factory labor data for Dieker Company is given in...Ch. 2 - Data pertaining to job cost sheets for Dieker...Ch. 2 - Marquis Company estimates that annual...Ch. 2 - Assign manufacturing overhead to production.(LO...Ch. 2 - In March, Stinson Company completes Jobs 10 and...Ch. 2 - Prepare entries for service salaries and wages and...Ch. 2 - At December 31, balances in Manufacturing Overhead...Ch. 2 - During the current month, Wacholz Company incurs...Ch. 2 - Milner Company is working on two job orders. The...Ch. 2 - Washburn Company produces earbuds. During the...Ch. 2 - During the current month, Standard Corporation...Ch. 2 - For Eckstein Company, the predetermined overhead...Ch. 2 - The gross earnings of the factory workers for...Ch. 2 - Stine Company uses a job order cost system. On May...Ch. 2 - A job order cost sheet for Ryan Company is shown...Ch. 2 - Manufacturing cost data for Orlando Company, which...Ch. 2 - Ikerd Company applies manufacturing overhead to...Ch. 2 - Analyze job cost sheet aid prepare entry for...Ch. 2 - Crawford Corporation incurred the following...Ch. 2 - Enos Printing Corp. uses a job order cost system....Ch. 2 - At May 31, 2017, the accounts of Lopez Company...Ch. 2 - Tierney Company begins operations on April 1,...Ch. 2 - The following are the job cost related accounts...Ch. 2 - Determine cost of jobs end ending balance in work...Ch. 2 - Tombert Decorating uses a job order cost system to...Ch. 2 - Lott Company uses a job order cost system and...Ch. 2 - For the year ended December 31, 2017, the job cost...Ch. 2 - Prepare entries in a job order cost system and...Ch. 2 - Agassi Company uses a job order cost system in...Ch. 2 - Phillips Corporations fiscal year ends on November...Ch. 2 - Huegel Hollow Resort has ordered 20 rotomolded...Ch. 2 - Khan Products Company uses a job order cost...Ch. 2 - In the course of routine checking of all journal...Ch. 2 - Communication Activity You are the management...Ch. 2 - Prob. 2.5BYPCh. 2 - Prob. 2.6BYPCh. 2 - Prob. 2.7BYP
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