Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 17, Problem 33AP
Bluebird Design, Inc. is a Web site design and consulting firm. The firm uses a job order costing system in which each client is a different job. Bluebird Design assigns direct labor, licensing costs, and travel costs directly to each job. It allocates indirect
At the beginning of 2018, managing partner Sally Simone prepared the following budget estimates:
In November 2018, Bluebird Design served several clients. Records for two clients appear here:
Requirements
- 1. Compute Bluebird Design’s direct labor rate and its predetermined overhead allocation rate for 2018.
- 2. Compute the total cost of each job.
- 3. If Simone wants to earn profits equal to 50% of service revenue, what fee should she charge each of these two clients?
- 4. Why does Bluebird Design assign costs to jobs?
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Crow Design is an interior design firm. The firm uses a job cost system in which each client is a different "job."Crow Design traces direct labor, licensing costs, and travel costs directly to each job (client). It allocates indirect costs to jobs based on a predetermined indirect cost allocation rate computed as a percentage of direct labor costs.
At the beginning of the current year, managing partner
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Direct labor hours (professional). . . . .
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$190,000
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Direct labor hours. . . . .
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Peters Realtors, a real estate consulting firm, specializes in advising companies on potential new plant sites. The company uses a job order costing system with a predetermined overhead allocation rate,
computed as a percentage of direct labor costs. At the beginning of 2024, managing partner Jane Peters prepared the following budget for the year:
(Click the icon to view the prepared budget.)
(Click the icon to view additional information.)
Read the requirements.
Requirement 1. Compute Peters Realtors' (a) hourly direct labor cost rate and (b) predetermined overhead allocation rate.
Begin with (a) hourly direct labor cost rate.
Direct labor
cost rate
per hour
Data table
Direct labor hours (professionals)
Direct labor costs (professionals)
Office rent
Support staff salaries
Utilities
Print
$
Done
12,750 hours
2,550,000
380,000
1,397,500
390,000
X
Koffler Legal & Consulting Services PLLC., provides legal consulting services to
businesses in NYc. They follow a job-costing system with a single direct-cost category
(professional labor costs) and a single indirect-cost pool (legal administration costs).
Actual professional hours are used as allocation base in order to allocate legal
administration costs. Koffler Legal & Consulting Services PLLC., currently has 10
lawyers to perform consulting services. Budgeted and actual amounts for 2019 are as
follows:
Koffler Legal & Consulting Services PLLC.
Budget for 2019
$990,000
$774,000
Professional labor costs
Legal administration costs
Professional labor-hours billed to customers
18,000 hours
Actual Results for 2019
Legal administration costs
Professional labor-hours billed to customers
$735,000
17,500
$59 per hour
Actual professional labor cost rate
1. Consider (a) actual costing, (b) normal costing, and (c) a mixed costing approach,
which is a variation from normal costing where…
Chapter 17 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Prob. 6TICh. 17 - Record the following journal entries for Smith...Ch. 17 - Prob. 8TICh. 17 - Prob. 9TICh. 17 - Prob. 10TI
Ch. 17 - Prob. 11TICh. 17 - Prob. 12TICh. 17 - The following information pertains to Smith...Ch. 17 - Prob. 14TICh. 17 - Prob. 15TICh. 17 - Prob. 16TICh. 17 - Wesson Company is a consulting firm. The firm...Ch. 17 - Prob. 18TICh. 17 - Would an advertising agency use job order or...Ch. 17 - Prob. 2QCCh. 17 - When a manufacturing company uses indirect...Ch. 17 - When a manufacturing company uses direct labor, it...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - A manufacturing company completed work on a job....Ch. 17 - For which of the following reasons would David...Ch. 17 - Why do managers need to know the cost of their...Ch. 17 - What types of companies use job order costing...Ch. 17 - What types of companies use process costing...Ch. 17 - What is the purpose of a job cost record?Ch. 17 - Explain the difference between cost of goods...Ch. 17 - A job was started on May 15, completed on June 27,...Ch. 17 - Give the journal entry for raw materials purchased...Ch. 17 - What is the purpose of the raw materials...Ch. 17 - How does the use of direct and indirect materials...Ch. 17 - Prob. 10RQCh. 17 - Give five examples of manufacturing overhead...Ch. 17 - What is the predetermined overhead allocation...Ch. 17 - What is an allocation base? Give some examples.Ch. 17 - How is manufacturing overhead allocated to jobs?Ch. 17 - A completed job cost record shows the unit cost of...Ch. 17 - Prob. 16RQCh. 17 - Give the journal entry for the completion of a...Ch. 17 - Prob. 18RQCh. 17 - Explain the difference between underallocated...Ch. 17 - If a company incurred 5,250 in actual overhead...Ch. 17 - Prob. 21RQCh. 17 - Explain the terms accumulate, assign, allocate,...Ch. 17 - Prob. 23RQCh. 17 - Prob. 24RQCh. 17 - Would the following companies most likely use job...Ch. 17 - Prob. 2SECh. 17 - Analyze the following T-accounts to determine the...Ch. 17 - Prob. 4SECh. 17 - Oak Outdoor Furniture manufactures wood patio...Ch. 17 - Job 303 includes direct materials costs of 550 and...Ch. 17 - Calculating predetermined overhead allocation...Ch. 17 - Lincoln Company completed jobs that cost 38,000 to...Ch. 17 - Columbus Enterprises reports the following...Ch. 17 - The T-account showing the manufacturing overhead...Ch. 17 - Adjusting Manufacturing Overhead Justice Companys...Ch. 17 - Prob. 12SECh. 17 - Prob. 13SECh. 17 - Prob. 14SECh. 17 - Prob. 15ECh. 17 - Defining terminology Match the following terms to...Ch. 17 - Prob. 17ECh. 17 - Goldenrod Company makes artificial flowers and...Ch. 17 - Selected cost data for Classic Print Co. are as...Ch. 17 - Prob. 20ECh. 17 - Prob. 21ECh. 17 - Prob. 22ECh. 17 - Jordan Company has the following information for...Ch. 17 - Journalize the following transactions for Marges...Ch. 17 - Prob. 25ECh. 17 - Analyze the following T-accounts, and determine...Ch. 17 - Prob. 27ECh. 17 - Clement Manufacturing makes carrying cases for...Ch. 17 - Ki Technology Co. manufactures DVDs for computer...Ch. 17 - Superior Construction, Inc. is a home builder in...Ch. 17 - Accounting for manufacturing overhead Prestige...Ch. 17 - Mighty Stars produces stars for elementary...Ch. 17 - Bluebird Design, Inc. is a Web site design and...Ch. 17 - Sutherland Manufacturing makes carrying cases for...Ch. 17 - Ye Technology Co. manufactures DVDs for computer...Ch. 17 - Meadow Construction, Inc. is a home builder in...Ch. 17 - Accounting for manufacturing overhead Elegant...Ch. 17 - Hero Stars produces stars for elementary teachers...Ch. 17 - Skylark Design, Inc. is a Web site design and...Ch. 17 - Accounting for manufacturing overhead This problem...Ch. 17 - Granite Construction Incorporated is a major...Ch. 17 - Hiebert Chocolate, Ltd. is located in Memphis. The...Ch. 17 - Prob. 1FC
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