Heitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Heitger identified three overhead activities and related drivers. Budgeted information or the year is as follows:Activity Cost Driver Amount of Driver
Materials handling $72,000 Number of moves 3,000
Engineering 165,000 Number of change orders 10,000
Other overhead 280,000 Direct labor hours 50,000
Heitger worked on four jobs in July. Data are as follows:
Job 13-43 Job 13-44 Job 13-45 Job 13-46
Beginning balance $20,300 $19,800 $2,300 $0
Direct materials $6,500 $8,900 $12,700 $9,800
Direct labor cost $18,000 $20,000 $32,000 $2,400
Number of moves 44 52 29 5
Number of change orders 30 40 20 20
Direct labor hours 900 1,000 1,600 120
By July 31, Jobs 13-43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process.
Required:
1. Calculate the activity rates for each of the three overhead activities.
2. Prepare job-order cost sheets for each job showing all costs through July 31.
3. Calculate the balance in Work in Process on July 31.
4. Calculate the cost of goods sold for July.
5. What if Job 13-46 required no engineering change orders? What is the new cost of Job 13-46? How would the cost of other jobs be affected?
Answers
Answer:
Kindly check attached picture
Explanation:
1. Calculate the activity rates for each of the three overhead activities.
2. Prepare job-order cost sheets for each job showing all costs through July 31.
3. Calculate the balance in Work in Process on July 31.
4. Calculate the cost of goods sold for July.
5. What if Job 13-46 required no engineering change orders? What is the new cost of Job 13-46? How would the cost of other jobs be affected?
Kindly check attached picture for detailed explanation
Final answer:
This solution calculates the activity rates for three overhead activities, creates job-order cost sheets for four jobs, computes the Work in Process balance and Cost of Goods sold for July, and analysis the impact on job costs if there were no engineering changes for one job.
Explanation:
Solution:
Firstly, to calculate the activity rates for each of the overhead activities, you need to divide the activity cost driver by the number amount of driver. For Materials handling, this gives us 72,000 / 3,000 = $24 per move; for Engineering, we get 165,000 / 10,000 = $16.5 per change order; and for Other overhead, the calculation gives 280,000 / 50,000 = $5.6 per direct labor hour.
For the job-order cost sheets, you add up all the costs - direct materials, direct labor, and overhead costs. The overhead costs are calculated based on the activity rates we calculated earlier multiplied by the number of drivers. The total for each category is then summed to provide the total cost for each job.
The balance in Work in Process on July 31st is calculated by adding the costs for all uncompleted jobs - which from the data supplied is jobs 13-45 and 13-46.
Cost of Goods Sold (COGS) for July includes costs of all jobs sold in July. As per the supplied data, jobs 13-43 and 13-44 were completed and sold in July. Hence, the costs of these two jobs are added to get COGS.
Lastly, if Job 13-46 required no engineering change orders, the engineering costs for that job would be eliminated, leading to a reduction in the total cost of that job. This would have no effect on the cost of other jobs as costs are allocated based on activity, not spread evenly across all jobs.
Learn more about Job Order Costing here:
#SPJ3
Related Questions
Andrews has a new design for their product Axe next round that can reduce their material cost of producing units from $8.13 to $7.33. Andrew passes on one quarter of all cost savings by cutting the current price to customers. For simplicity: Current selling price = $19.00; Use current labor costs of $4.02; Use period costs of $7,260 (from Income Statement). Required:Determine the new selling price to break even next round.
Identify each of the following items as: (a) an asset, (b) a liability, (c) revenue, (d) an expense, or (e) a dividend: 1. Amounts due from customers 2. Amounts owed to suppliers 3. Cash on hand 4. Cash paid to stockholders 5. Cash sales 6. Equipment 7. Note payable owed to the bank 8. Rent paid for the month 9. Sales commissions paid to salespersons 10. Wages paid to employees
This year Barney purchased 500 shares of Bell common stock for $20 per share. At year-end the Bell shares were only worth $2 per share. What amount can Barney deduct as a loss this year
When a parent uses the equity method throughout the year to account for its investment in an acquired subsidiary, which of the following statements is false before making adjustments on the consolidated worksheet? A. Parent company net income equals controlling interest in consolidated net income. B. Parent company retained earnings equals consolidated retained earnings. C. Parent company total assets equals consolidated total assets. D. Parent company dividends equals consolidated dividends. E. Goodwill will not be recorded on the parent's books.
Answers
Answer:
True
Explanation:
Since annual interest payment, coupon payment, is $100, it shows that the face value of the bond is $1,000, effectively the coupon rate is 10%($100/$1000) whereas the discount rate which is the yield to maturity with which to present value the future cash flows is below 9%, and when coupon rate is greater than the yield, the bond sells at a premium to its face value.
Since the coupon rate is higher it is safe to conclude that the bond would sell at a premium
Contribution margin
Pretax income
(2) Compute the number of units expected to be sold next period.
Choose Numerator: / Choose Denominator: = Units
/ = Units
Answers
Answer and Explanation:
1. The computation of the total expected dollar sales for next period is given below:
Sales $4,410,000
Less: variable cost $1,764,000
Contribution margin $2,646,000
Less: fixed cost $2,364,000
Pre tax income $282,000
2. The number of units that should be sold is
= $2,646,000 ÷ $63 per unit
= 42,000 units
In this way it should be calculated
Answers
Answer:
Explanation:
Antonio used the value of money as a unit of account to compare the value of the two cars namely Super and Duper and come to the conclusion that Duper was cheaper to Super
Antonio saved $ 4000 in his checking account which he gave to the seller. This represent money's role as a store of value
Antonio write a check of the money he saved to the seller and the seller accepted it and gave him the car which fulfill the role of money as a medium of exchange.
Answers
Answer: Option B
Explanation: As we know that,
where,
Operating income = $60,000
total asset = current asset base - decrease in current asset base
total asset = $500,000 - $120,000
= $ 380,000
Now, putting the values into equation we get :-
= 15.79%
Answers
Answer:
C. NPV is the discounted present value of a project's expected future accounting net income at the required return, subtracting the initial investment.
Explanation:
NPV means Net Present Value, this is calculated by computing the present value of cash returns and not the accounting income, as accounting income takes in account non cash items also, although while computing returns the non cash transactions are not considered.
Therefore the chosen statement which states about accounting income less initial investment is false as even in case the project requires additional mid term investment then that is also considered.
Thus, false statement is
Statement C
Answers
Answer:
I feel like my strongest aspect of professionalism would be communication. My career interests require lots of communication with customers. I would need to be able to communicate with the customer’s feelings and needs for whichever situation they are in and what they want to accomplish.
Explanation:
Final answer:
I believe my strongest aspect of professionalism is clear and effective communication. I am constantly working on improving my ability to understand non-verbal cues and refute counterclaims respectfully and factually.
Explanation:
The aspect of professionalism I feel I am strongest at is clear and effective communication. I believe this is a strong point in my professional character because I consistently strive to ensure my explanations are understood. My ability to articulate complex concepts into simpler understandable points is what sets me apart in my profession. In terms of personal development, there is always room for growth when it comes to active listening.
One area of my communication skills that could use development is understanding non-verbal cues. Often, these subtitles are just as important, if not more so, than the words being spoken. In my journey to become a better professional, I also make it a point to refute counterclaims sincerely and factually, respecting differing viewpoints without compromising on integrity.
Learn more about Professionalism here:
#SPJ3