Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 3, Problem 37E
Design Arts Associates is an interior decorating firm in Berlin. The following costs were incurred in the firm’s contract to redecorate the mayor’s offices.
The firm’s budget for the year included the following estimates:
Overhead is applied to contracts using a predetermined overhead rate calculated annually. The rate is based on direct professional labor cost.
Required: Calculate the total cost of the firm’s contract to redecorate the mayor’s offices. (Remember to express your answer in terms of euros.)
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a.
Eye for detail is an interior decorating firm located in sydney. The following costs were incurred in the firms contract to redecorate the local council offices:
direct material $5,600
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The firms budget for the year included the following estimates:
Budgeted overhed $800,000
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1. Calculate the total cost of the firms contract to redcorate the council offices. Overhead is applied to contracts using a predetermined overhead rate, calculated annually, based on the professional labour cost. Materials are charged directly to each contract
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b.
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Calculate the fee charged to redecorate the council offices assuming that the firm uses a chargeout rate of $360 per professional labour hour, which includes a profit margin of 40 per cent, and 120 hours are worked on the…
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
Rundle Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows.
Expected
Direct labor Home 1: $63,000 Home 2: $108,000, Home 3: $181,000
Direct materials Home 1: 98,000 Home 2: 143,000 Home 3: 186,000
Assume Rundle needs to allocate two major overhead costs ($ 52,800 of employee fringe benefits and $12,,810 of indirect materials cost) among the three Jobs.
required;
Choose an appropriate cost driver for each of the overhead costs and determine the cost of each house ( round " allocation rate to 2 decimal places.)
Chapter 3 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 3 - List and explain four purposes of product costing.Ch. 3 - Explain the difference between job-order and...Ch. 3 - How is the concept of product costing applied in...Ch. 3 - What are the purposes of the following documents:...Ch. 3 - Why is manufacturing overhead applied to products...Ch. 3 - Explain the benefits of using a predetermined...Ch. 3 - Describe one advantage and one disadvantage of...Ch. 3 - Describe an important cost-benefit issue involving...Ch. 3 - Explain the difference between actual and normal...Ch. 3 - When a single, volume-based cost driver (or...
Ch. 3 - Prob. 11RQCh. 3 - Describe the process of two-stage cost allocation...Ch. 3 - Define each of the following terms, and explain...Ch. 3 - Describe how job-order costing concepts are used...Ch. 3 - What is meant by the term cost driver? What is a...Ch. 3 - Describe the flow of costs through a...Ch. 3 - Give an example of how a hospital, such as the...Ch. 3 - Why are some manufacturing firms switching from...Ch. 3 - What is the cause of over applied or under applied...Ch. 3 - Briefly describe two ways of closing out over...Ch. 3 - Describe how a large retailer such as Lowes would...Ch. 3 - Prob. 22RQCh. 3 - For each of the following companies, indicate...Ch. 3 - The controller for Tender Bird Poultry, Inc....Ch. 3 - Finley Educational Products started and finished...Ch. 3 - Bodin Company manufactures finger splints for kids...Ch. 3 - McAllister, Inc. employs a normal costing system....Ch. 3 - Garrett Toy Company incurred the following costs...Ch. 3 - Crunchem Cereal Company incurred the following...Ch. 3 - Prob. 31ECh. 3 - Selected data concerning the past years operations...Ch. 3 - Sweet Tooth Confectionary incurred 157,000 of...Ch. 3 - The following information pertains to Trenton...Ch. 3 - The following data pertain to the Oneida...Ch. 3 - Refer to the data for the preceding exercise for...Ch. 3 - Design Arts Associates is an interior decorating...Ch. 3 - Suppose you are the controller for a company that...Ch. 3 - Laramie Leatherworks, which manufactures saddles...Ch. 3 - Refer to Exhibit 312, which portrays the three...Ch. 3 - Refer to the illustration of overhead application...Ch. 3 - The following data refer to Twisto Pretzel Company...Ch. 3 - Burlington Clock Works manufactures fine,...Ch. 3 - Perfecto Pizza Company produces microwavable...Ch. 3 - Stellar Sound, Inc. which uses a job-order costing...Ch. 3 - Finlon Upholstery, Inc. uses a job-order costing...Ch. 3 - JLR Enterprises provides consulting services...Ch. 3 - Garcia, Inc. uses a job-order costing system for...Ch. 3 - MarineCo, Inc. manufactures outboard motors and an...Ch. 3 - The following data refers to Huron Corporation for...Ch. 3 - Refer to the schedule of cost of goods...Ch. 3 - Marco Polo Map Companys cost of goods sold for...Ch. 3 - Midnight Sun Apparel Company uses normal costing,...Ch. 3 - Marc Jackson has recently been hired as a cost...Ch. 3 - Troy Electronics Company calculates its...Ch. 3 - Tiana Shar, the controller for Bondi Furniture...Ch. 3 - Scholastic Brass Corporation manufactures brass...Ch. 3 - Refer to the preceding problem regarding...Ch. 3 - Prob. 59PCh. 3 - TeleTech Corporation manufactures two different...Ch. 3 - CompuFurn, Inc. manufactures furniture for...Ch. 3 - FiberCom, Inc., a manufacturer of fiber optic...
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