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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Textbook Question
Chapter 5, Problem 5.33P
The rates per category of professional labor are as follows:
| Category of Professional Labor | Direct Cost per Hour | Indirect Cost per Hour |
| Partner | $200 | $120,000 ÷ 2,500 hours = $48 |
| Associate | $120 | $ 80,000 ÷ 2,500 hours = $32 |
- 1. Compute the costs of the Steger Enterprises and Bluestone Inc. jobs using Wharton’s further refined system, with multiple direct-cost categories and multiple indirect-cost pools.
Required
- 2. For what decisions might Wharton Associates find it more useful to use this job-costing approach rather than the approaches in Problem 5-31 or 5-32?
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Winkle, Kotter, and Zale is a small law firm that contains 10 partners and 12 support persons. The firm employs a job-order costing
system to accumulate costs chargeable to each client, and it is organized into two departments-the Research and Documents
Department and the Litigation Department. The firm uses predetermined overhead rates to charge the costs of these departments to its
clients. At the beginning of the curent year, the firm's management made the following estimates for the year
Department
Research
and
Documents
20,400
9,300
$ 17,700
$ 430,100
$714,000
Litigation
Research-hours
Direct attorney-hours
Materials and supplies
Direct attorney cost
Departmental overhead cost
16.400
$ 5,500
$ 799.400
$ 311,766
The predetermined overhead rate in the Research and Documents Department is based on research-hours, and the rate in the Litigation
Department is based on direct attorney cost
The costs charged to each client are made up of three elements: materials and supplies used,…
Chapter 5 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 5 - What is broad averaging, and what consequences can...Ch. 5 - Why should managers worry about product...Ch. 5 - What is costing system refinement? Describe three...Ch. 5 - What is an activity-based approach to designing a...Ch. 5 - Describe four levels of a cost hierarchy.Ch. 5 - Why is it important to classify costs into a cost...Ch. 5 - What are the key reasons for product cost...Ch. 5 - Prob. 5.8QCh. 5 - Department indirect-cost rates are never...Ch. 5 - Prob. 5.10Q
Ch. 5 - Prob. 5.11QCh. 5 - Prob. 5.12QCh. 5 - Activity-based costing is the wave of the present...Ch. 5 - Increasing the number of indirect-cost pools is...Ch. 5 - The controller of a retail company has just had a...Ch. 5 - Conroe Company is reviewing the data provided by...Ch. 5 - Prob. 5.17MCQCh. 5 - Cost hierarchy. Roberta, Inc., manufactures...Ch. 5 - ABC, cost hierarchy, service. (CMA, adapted)...Ch. 5 - Alternative allocation bases for a professional...Ch. 5 - Plant-wide, department, and ABC Indirect cost...Ch. 5 - Plant-wide, department, and activity-cost rates....Ch. 5 - ABC, process costing. Sander Company produces...Ch. 5 - Department costing, service company. DLN is an...Ch. 5 - Activity-based costing, service company....Ch. 5 - Activity-based costing, manufacturing. Decorative...Ch. 5 - ABC, retail product-line profitability. Fitzgerald...Ch. 5 - Prob. 5.28ECh. 5 - Activity-based costing. The job-costing system at...Ch. 5 - ABC, product costing at banks,...Ch. 5 - Problems 5-31 Job costing with single direct-cost...Ch. 5 - Job costing with multiple direct-cost categories,...Ch. 5 - Job costing with multiple direct-cost categories,...Ch. 5 - First-stage allocation, time-driven activity-based...Ch. 5 - First-stage allocation, time-driven activity-based...Ch. 5 - Department and activity-cost rates, service...Ch. 5 - Activity-based costing, merchandising. Pharmahelp,...Ch. 5 - Choosing cost drivers, activity-based costing,...Ch. 5 - ABC, health care. Crosstown Health Center runs two...Ch. 5 - Unused capacity, activity-based costing,...Ch. 5 - Unused capacity, activity-based costing,...Ch. 5 - ABC, implementation, ethics. (CMA, adapted) Plum...Ch. 5 - Activity-based costing, activity-based management,...
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