Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 4, Problem 4.22E
Actual costing, normal costing, accounting for manufacturing
| Budget for 2017 | Actual Results for 2017 | |
| Direct material costs | $2,250,000 | $2,150,000 |
| Direct manufacturing labor costs | 1,700,000 | 1,650,000 |
| Manufacturing overhead costs | 3,060,000 | 3,217,500 |
- 1. Compute the actual and budgeted manufacturing overhead rates for 2017.
Required
- 2. During March, the job-cost record for Job 626 contained the following information:
| Direct materials used | $55,000 |
| Direct manufacturing labor costs | $45,000 |
Compute the cost of Job 626 using (a) actual costing and (b) normal costing.
- 3. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated manufacturing overhead under actual costing?
- 4. Why might managers at Dakota Products prefer to use normal costing?
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Actual costing, normal costing, accounting for manufacturing overhead. Dakota Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dakota allocates manufacturing overhead costs using direct manufacturing labor costs. Dakota provides the following information:
Budget for 2017 Actual Results for 2017
Direct material costs $2,250,000 $2,150,000 Direct manufacturing labor costs 1,700,000 1,650,000 Manufacturing overhead costs 3,060,000 3,217,500
Q. Why might managers at Dakota Products prefer to use normal costing?
Actual costing, normal costing, accounting for manufacturing overhead. Dakota Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dakota allocates manufacturing overhead costs using direct manufacturing labor costs. Dakota provides the following information:
Budget for 2017 Actual Results for 2017
Direct material costs $2,250,000 $2,150,000 Direct manufacturing labor costs 1,700,000 1,650,000 Manufacturing overhead costs 3,060,000 3,217,500
Q. Compute the actual and budgeted manufacturing overhead rates for 2017.
Actual costing, normal costing, accounting for manufacturing overhead. Dakota Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dakota allocates manufacturing overhead costs using direct manufacturing labor costs. Dakota provides the following information:
Budget for 2017 Actual Results for 2017
Direct material costs $2,250,000 $2,150,000 Direct manufacturing labor costs 1,700,000 1,650,000 Manufacturing overhead costs 3,060,000 3,217,500
Q. During March, the job-cost record for Job 626 contained the following information:Direct materials used $55,000 Direct manufacturing labor costs…
Chapter 4 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 4 - Define cost pool, cost tracing, cost allocation,...Ch. 4 - How does a job-costing system differ from a...Ch. 4 - Why might an advertising agency use job costing...Ch. 4 - Describe the seven steps in job costing.Ch. 4 - Give examples of two cost objects in companies...Ch. 4 - Describe three major source documents used in...Ch. 4 - What is the advantage of using computerized source...Ch. 4 - Give two reasons why most organizations use an...Ch. 4 - Distinguish between actual costing and normal...Ch. 4 - Describe two ways in which a house-construction...
Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Which of the following does not accurately...Ch. 4 - Sturdy Manufacturing Co. assembled the following...Ch. 4 - For which of the following industries would...Ch. 4 - ABC Company uses job-order costing and has...Ch. 4 - Under Stanford Corporations job costing system,...Ch. 4 - (10 min) Job costing, process costing. In each of...Ch. 4 - Actual costing, normal costing, accounting for...Ch. 4 - Job costing, normal and actual costing. Atkinson...Ch. 4 - Budgeted manufacturing overhead rate, allocated...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Job costing, consulting firm. Frontier Partners, a...Ch. 4 - Time period used to compute indirect cost rates....Ch. 4 - Accounting for manufacturing overhead. Creative...Ch. 4 - Job costing, journal entries. The University of...Ch. 4 - Journal entries, T-accounts, and source documents....Ch. 4 - Job costing, journal entries. Donald Transport...Ch. 4 - Job costing, unit cost, ending work in process....Ch. 4 - Job costing; actual, normal, and variation from...Ch. 4 - Job costing; variation on actual, normal, and...Ch. 4 - Proration of overhead. The Ride-On-Wave Company...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Service industry, job costing, law firm. Kidman ...Ch. 4 - Service industry, job costing, two direct- and two...Ch. 4 - Proration of overhead. (Z. Iqbal, adapted) The Zaf...Ch. 4 - Normal costing, overhead allocation, working...Ch. 4 - Proration of overhead with two indirect cost...Ch. 4 - General ledger relationships, under- and...Ch. 4 - Overview of general ledger relationships. Estevez...Ch. 4 - Allocation and proration of overhead. Resource...Ch. 4 - (2530 min.) Job costing, ethics. Joseph Underwood...Ch. 4 - Job costingservice industry. Market Pulse performs...
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