ACC 3200 Chapter Notes - Chapter 3: Direct Labor Cost, Cost Driver, Finished Good

101 views5 pages

scarletsnail973

11 Sep 2017

School

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

Absorption costing: all manufacturing costs, both fixed and variable are assigned to units. Chapter 3: job order costing of a product. Units are said to fully absorb manufacturing costs. Job order costing: used in situations where man diff. Products, each other individual and unique features are produced each period. Bill of materials: document that lists the type and quantity of each type of direct material needed to complete a unit of the product. Materials requisition form: document that specifies the type and quantity of materials to be drawn from the storeroom and identifies the job that will be charged for the cost of materials. Automatically generate a job cost sheet: records the materials, labor, and manufacturing overhead costs charged to that job. Direct labor consists of labor charges easily traced to a particular job. If cannot be easily traced then treated as a part of manufacturing overhead (indirect labor: maintenance, supervision, and cleanup)

Related Questions

Process costing differs from job order costing in the way costsare accounted for. Share your thoughts about the accountingdifferences in process costing versus job order costing, andexplain how manufacturing costs are accounted for in processcosting. Further explain why the cost per equivalent unit aredetermined separately for direct materials and for conversion costsunder different methods of determining the cost of completed andtransferred out units and the cost of ending work in processinventory. Additionally, discuss the type of production mostsuitable to employ a process costing system by providing anexample.

amaranthworm158

Identify each statement as true or false. If false, indicate howto correct the statement.

1. Process cost systems are used to apply costs to similarproducts that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit isindistinguishable from another.
3. Companies that produce soft drinks, motion pictures, andcomputers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individualjobs.
5. Job order costing and process costing track differentmanufacturing costs elements.
6. Both job order costing and process costing account for directmaterials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for bothjob order costing and process costing.
8. In a process cost system, only one work in process account isused.
9. In a process cost system, costs are summarized in a job costsheet.
10. In a process cost system, the unit cost is total manufacturingcosts for the period divided by the units produced during theperiod.

byzantiumpanda529

CompuFurn, Inc. manufactures furniture for computer workstations. CompuFurn uses a job-order costing system and employs absorption costing. ComuFurnâs work-in-process inventory on November 30 consisted of the following jobs:

JOB NUMBER	DESCRIPTION	UNIT	ACCUMULATED COSTS
CC723	Computer Caddy	20,000	$900,000
CH291	Chair	15,000	$431,000
PS812	Printer Stand	25,000	$250,000
Total			$1,581,000

On November 30, the companyâs finished-goods inventory, which is evaluated using the first-in, first-out (FIFO) method, consisted of four items:

ITEM

QUANTITY & UNIT COSTS

ACCUMULATED COSTS

Computer Caddy

7,500 units @ $64

$480,000

Chair

19,400 units @ $35 each

$679,000

Printer Stand

21,000 units @ $55 each

$1,155,000

Desk

11,200 units @ $102 each

$1,142,400

Total

$3,456,400

At the end of November, the balance in CompuFurnâs Materials Inventory account, which includes both raw materials and purchased parts, was $668,000. Additions to and requisitions from the materials inventory during the month of December included the following:

ADDITIONS	RAW MATERIALS	PURCHASED PARTS
Purchases	$242,000	$396,000
Requisitions:
Job CC723	$51,000	$104,000
Job CH291	$3,000	$10,800
Job PS812	$124,000	$87,000
Job DS444 (5,000 desks)	$65,000	187,000

CompuFurn applies manufacturing overhead on the basis of machine hours. The companyâs manufacturing overhead budget for the year totaled $4,500,000. The company planned to use 900,000 machine hours during this period, which is the firmâs estimated practical capacity. Through the first 11 months of the year, a total of 830,000 machine hours were used, and actual manufacturing overhead amounted to $4,140,000.

During the month of December, machine hours and labor hours consisted of the following:

ACCOUNT	MACHINE HOURS	LABOR HOURS	COST
CC723	12,000	11,600	$122,400
CH291	4.400	3,600	$43,200
PS812	19,500	14,300	$200,500
DS444	14,000	12,500	$138,000
Indirect Labor	---	3,000	$29,400
Supervision	---	---	$57,600
Total	49,900	45,000	$591,100

The jobs completed in December and the unit sales for that month are as follows:

JOB NO.	PRODUCTION ITEMS	QUANTITY COMPLETED	ITEM	QUANTITY SHIPPED
CC723	Computer Caddy	20,000	Computer Caddy	17,500
CH291	Chair	15,000	Chair	21,000
DS444	Desks	5,000	Printer Stand	18,000
			Desks	6,000

REQUIRED:

1. Describe when it is appropriate for a company to use a job-order costing system.

2. Calculate the balance in CompuFurn, Inc.âs Work-in-Process Inventory account as of December 31.

3. Calculate the cost of the chairs in CompuFurn, Inc.âs finished-goods Inventory as of December 31.

4. Actual manufacturing overhead incurred in December amounted to $252,000. Calculate CompuFurnâs overapplied or underapplied overhead for the year.

5. Explain two alternative accounting treatments for overapplied or underapplied overhead balances when using a job-order costing system.

mauvearmadillo49

ACC 3200 Chapter Notes - Chapter 3: Direct Labor Cost, Cost Driver, Finished Good

Document Summary

Get access

Related Documents

ACC 3200 Chapter Notes - Chapter 1-2: Income Statement, Variable Cost, Marginal Cost

ACC 3200 Chapter Notes - Chapter 5: Operating Leverage, Earnings Before Interest And Taxes, Contribution Margin

Related Questions