grand canyou acc360 week 2 assignment

THIS NEEDS TO BE IN
EXCEL

4-16Job costing, process costing.In each of the following situations, determine
whether job costing or process costing would be more appropriate.

a.A CPA firm
b.An oil
refinery
c.A custom
furniture manufacturer
d.A tire
manufacturer
e.A textbook
publisher
f.A
pharmaceutical company
g.An
advertising agency
h.An
architecture firm
i.A flour mill
j.A paint
manufacturer
k.A nursing
home
l.A landscaping
company
m.A
cola-drink-concentrate producer
n.A movie
studio
o.A law firm
p.A commercial
aircraft manufacturer
q.A management
consulting firm
r.A plumbing
contractor
s.A catering
service
t.A paper mill
u.An auto repair shop

4-18Job costing, normal and actual costing.Anderson Construction assembles residential
houses.
It uses a job-costing system with two direct-cost categories
(direct materials and direct labor) and one indirect-cost pool (assembly
support). Direct labor-hours is the allocation base for assembly support costs.
In December 2013, Anderson budgets 2014 assembly-support costs to
be $8,000,000 and 2014 direct labor hours to be 160,000.

At the end of 2014, Anderson is comparing the costs of several
jobs that were started and completed in 2014.

Laguna Model Mission Model
Construction
period
Feb–June 2014
May–Oct 2014
Direct
material costs
$106,650
$127,970
Direct
labor costs
$36,276
$41,750
Direct
labor-hours
920
1,040

Direct
materials and direct labor are paid for on a contract basis. The costs of each
are known when direct materials are used or when direct labor-hours are worked.
The 2014 actual assembly-support costs were $7,614,000, and the actual direct
labor-hours were 162,000.

1.Compute the
(a) budgeted indirect-cost rate and (b) actual indirect-cost rate. Why do they
differ?
2.What are the
job costs of the Laguna Model and the Mission Model using (a) normal costing
and (b) actual costing?
3.Why might
Anderson Construction prefer normal costing over actual costing?

4-32Service industry, job costing, law firm.Kidman & Associates is a law firm specializing
in labor relations and employee-related work. It employs 30 professionals (5
partners and 25 associates) who work directly with its clients. The average
budgeted total compensation per professional for 2014 is $97,500. Each
professional is budgeted to have 1,500 billable hours to clients in 2014. All
professionals work for clients to their maximum 1,500 billable hours available.
All professional labor costs are included in a single direct-cost category and
are traced to jobs on a per-hour basis. All costs of Kidman & Associates
other than professional labor costs are included in a single indirect-cost pool
(legal support) and are allocated to jobs using professional labor-hours as the
allocation base. The budgeted level of indirect costs in 2014 is $2,475,000.

1.Prepare an
overview diagram of Kidman’s job-costing system.
2.Compute the
2014 budgeted direct-cost rate per hour of professional labor.
3.Compute the
2014 budgeted indirect-cost rate per hour of professional labor.
4.Kidman &
Associates is considering bidding on two jobs:
a.Litigation work for Richardson, Inc., which requires 120
budgeted hours of professional labor
b.Labor contract work for Punch, Inc., which requires 160
budgeted hours of professional labor
Prepare a cost estimate for each job.

4-34Proration of overhead.(Z. Iqbal, adapted) The Zaf Radiator Company uses
a normal-costing system with a single manufacturing overhead cost pool and
machine-hours as the cost-allocation base. The following data are for 2014:

Budgeted
manufacturing overhead costs $4,800,000
Overhead
allocation base Machine-hours
Budgeted
machine-hours
80,000
Manufacturing
overhead costs incurred $4,900,000
Actual
machine-hours 75,000

Machine-hours
data and the ending balances (before proration of under- or over allocated
overhead) are as follows:

Actual Machine-Hours
2014 End-of-Year Balance
Cost
of Goods Sold 60,000
$8,000,000
Finished
Goods Control
11,000
1,250,000
Work-in-Process
Control 4,000 750,000

1.Compute the
budgeted manufacturing overhead rate for 2014.
2.Compute the
under- or over allocated manufacturing overhead of Zaf Radiator in 2014.
Dispose of this amount using the
following:
a.Write
off to Cost of Goods Sold
b.Proration based on ending balances (before proration) in
Work-in-Process Control, Finished Goods
Control, and Cost of Goods
Sold
c.Proration based on the overhead allocated in 2014 (before
proration) in the ending balances of
Work-in-Process Control,
Finished Goods Control, and Cost of Goods Sold
3.Which method
do you prefer in requirement 2? Explain.

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