Lillybeth Godén Cost Accouting Sept.11.2016
Chapter 4
E4-16 Job order costing, process costing.
a. Job costing i. Process costing p. Job costing
b. Process costing j. Process costing q. Job costing
c. Job costing k. Job costing r. Process costing
d. Process costing l. Job costing s. Job costing
e. Job costing m. Process costing t. Process costing
f. Process costing n. Job costing u. Job costing
g. Job costing o. Job costing
h. Job costing (but some process costing)
E4-17 Actual costing, normal costing, accounting for manufacturing overhead.
Budgeted Manufacturing
1. Budgeted Manufacturing = Overhead cost
Overhead rate Budgeted direct manufacturating
Labor cost
= $2,700,000 = 1.80 or 185%
$1,500,000
Actual Manufacturating
Actual Manufacturating = Overhead cost
Overhead rate Actual direct manufacturating
Labor cost
= $2,755,000 = 1.9 or 190%
$1,450,000
2. Costs of Job 626 under actual and normal costing follow:
Actual Normal
Costing Costing
Direct materials $ 40,000 $ 40,000
Direct manufacturing labor costs 30,000 30,000
Manufacturing overhead costs
($30,000 ´ 1.90; $30,000 ´ 1.80) 57,000 54,000
Total manufacturing costs of Job 626 $127,000 $124,000
3. Total manufacturating overhead = Actual manufacturating ´ Budgeted
Allocated under normal costing labor cost overhead rate
= $1,450,000 x 1.80
= $2,610,000
Underallocated manufacturating = Actual manufacturating – Manufacturating
Overhead overhead cost overhead allocated
= $2,755,000 – $2,610,000 = $145,000
There is no under- or overallocated overhead under actual costing because overhead is allocated under actual costing by
multiplying actual manufacturing labor costs and the actual manufacturing overhead rate. This, of course equals the actual
manufacturing overhead costs. All actual overhead costs are allocated to products. Hence, there is no under- or
overallocatead overhead.
E4-20 Job costing, accounting for manufacturing overhead, budgeted rates
1. An overview of the product costing system is
Budgeted manufacturing overhead divided by allocation base:
Machining overhead $1,800,000 = $36 per machine-hour
50,0000
Assembly overhead: $3,000,000 = 180% of direct manuf. labor costs
2,000,000
2. Machining department, 2,000 hours ´ $36 $72,000
Assembly department, 180% ´ $15,000 27,000
Total manufacturing overhead allocated to Job 494 $99,000
3. Machining Assembly
Actual manufacturing overhead $2,100,000 $ 3,700,000
Manufacturing overhead allocated,
55,000 ´ $36 1,980,000 —
180% ´ $2,200,000 — 3,960,000
Underallocated (Overallocated) $ 120,000 $ (260,000)
Ex 4-21 Job cosng, consulng firm.
1. Budgeted indirect-cost rate = $13,000,000 ÷ $5,000,000 = 260% of professional labor costs
Client supoort
Professional
Labor cost
Indirect cost
Direct cost
Professional
labor
2. At the budgeted revenues of $20,000,000, Taylor’s operating income of $2,000,000 equals 10% of rate
Markup rate = $20,000,000 ÷ $5,000,000 = 400% of direct professional labor costs
3. Budgeted costs
Direct costs:
Director, $200 x 3 $ 600
Partner, $100 x 16 1,600
