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Uitwerkingen 'Cost Accounting' - hoofdstuk 4
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Uitwerkingen 'Cost Accounting' - hoofdstuk 4
[Meer zien]Voorbeeld 2 van de 46 pagina's
Voorbeeld 2 van de 46 pagina's
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Voorbeeld van de inhoud
CHAPTER 4JOB COSTING
4-1 Cost pool––a grouping of individual indirect cost items.
Cost tracing––the assigning of direct costs to the chosen cost object.
Cost allocation––the assigning of indirect costs to the chosen cost object.
Cost-allocation base––a factor that links in a systematic way an indirect cost or group of
indirect costs to cost objects.
4-2 In a job-costing system, costs are assigned to a distinct unit, batch, or lot of a product or
service. In a process-costing system, the cost of a product or service is obtained by using broad
averages to assign costs to masses of identical or similar units.
4-3 An advertising campaign for Pepsi is likely to be very specific to that individual client.
Job costing enables all the specific aspects of each job to be identified. In contrast, the
processing of checking account withdrawals is similar for many customers. Here, process costing
can be used to compute the cost of each checking account withdrawal.
4-4 The seven steps in job costing are: (1) identify the job that is the chosen cost object, (2)
identify the direct costs of the job, (3) select the cost-allocation bases to use for allocating
indirect costs to the job, (4) identify the indirect costs associated with each cost-allocation base,
(5) compute the rate per unit of each cost-allocation base used to allocate indirect costs to the
job, (6) compute the indirect costs allocated to the job, and (7) compute the total cost of the job
by adding all direct and indirect costs assigned to the job.
4-5 Major cost objects that managers focus on in companies using job costing are a product
such as a specialized machine, a service such as a repair job, a project such as running the Expo,
or a task such as an advertising campaign.
4-6 Three major source documents used in job-costing systems are (1) job cost record or job
cost sheet, a document that records and accumulates all costs assigned to a specific job, starting
when work begins (2) materials requisition record, a document that contains information about
the cost of direct materials used on a specific job and in a specific department; and (3) labor-time
sheet, a document that contains information about the amount of labor time used for a specific
job in a specific department.
4-7 The main advantages of using computerized source documents for job cost records are
the accuracy of the records and the ability to provide managers with instantaneous feedback to
help control job costs.
4-8 Two reasons for using an annual budget period are
a. The numerator reason––the longer the time period, the less the influence of seasonal
patterns in overhead costs, and
b. The denominator reason––the longer the time period, the less the effect of variations in
output levels or quantities of the cost-allocation bases on the allocation of fixed costs.
4-1
, 4-9 Actual costing and normal costing differ in their use of actual or budgeted indirect cost
rates:
Actual Normal
Costing Costing
Direct-cost rates Actual rates Actual rates
Indirect-cost rates Actual rates Budgeted rates
Each costing method uses the actual quantity of the direct-cost input and the actual quantity of
the cost-allocation base.
4-10 A house construction firm can use job cost information (a) to determine the profitability
of individual jobs, (b) to assist in bidding on future jobs, and (c) to evaluate professionals who
are in charge of managing individual jobs.
4-11 The statement is false. In a normal costing system, the Manufacturing Overhead Control
account will not, in general, equal the amounts in the Manufacturing Overhead Allocated
account. The Manufacturing Overhead Control account aggregates the actual overhead costs
incurred while Manufacturing Overhead Allocated allocates overhead costs to jobs on the basis
of a budgeted rate times the actual quantity of the cost-allocation base.
Underallocation or overallocation of indirect (overhead) costs can arise because of (a) the
Numerator reason––the actual overhead costs differ from the budgeted overhead costs, and (b)
the Denominator reason––the actual quantity used of the allocation base differs from the
budgeted quantity.
4-12 Debit entries to Work-in-Process Control represent increases in work in process.
Examples of debit entries under normal costing are (a) direct materials used (credit to Materials
Control), (b) direct manufacturing labor billed to job (credit to Wages Payable Control), and (c)
manufacturing overhead allocated to job (credit to Manufacturing Overhead Allocated).
4-13 Alternative ways to make end-of-period adjustments to dispose of underallocated or
overallocated overhead are as follows:
(i) Proration based on the total amount of indirect costs allocated (before proration) in
the ending balances of work in process, finished goods, and cost of goods sold.
(ii) Proration based on total ending balances (before proration) in work in process,
finished goods, and cost of goods sold.
(iii) Year-end write-off to Cost of Goods Sold.
(iv) The adjusted allocation rate approach that restates all overhead entries using actual
indirect cost rates rather than budgeted indirect cost rates.
4-14 A company might use budgeted costs rather than actual costs to compute direct labor
rates because it may be difficult to trace direct labor costs to jobs as they are completed (for
example, because bonuses are only known at the end of the year).
4-15 Modern technology of electronic data interchange (EDI) is helpful to managers because it
ensures that a purchase order is transmitted quickly and accurately to suppliers with minimum
paperwork and costs.
4-2
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