Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Chapter 4, Problem 12P
Determine over-and underbillings for a company with the following information:
Job Number: 318
Job Name: Mountain Peak Office Remodel
Current Contract Amount: $256,852
Total Estimated Cost at Completion: $225,236
Actual Costs to Date: $202,138
Total Billed: $252,253
Job Number: 319
Job Name: East Street Restaurant
Current Contract Amount: $350,199
Total Estimated Cost at Completion: $310,564
Actual Costs to Date: $152,364
Total Billed: $178,256
Job Number: 320
Job Name: Market Street Warehouse
Current Contract Amount: $55,123
Total Estimated Cost at Completion: $45,224
Actual Costs to Date: $5,211
Total Billed: $5,500
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Bennette Corporation has provided the following data concerning its overhead costs for the coming year:
Wages and salaries
$ 450,000
Depreciation
175,000
Rent
195,000
Total
$ 820,000
The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year:
Activity Cost Pool
Total Activity
Assembly
35,000
labor-hours
Order processing
450
orders
Other
Not applicable
The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of idle capacity and organization-sustaining costs.
The distribution of resource consumption across activity cost pools is given below:
Activity Cost Pools
Total
Assembly
Order Processing
Other
Wages and salaries
30%
25%
45%
100%
Depreciation
15%
45%
40%
100%
Rent
35%
30%
35%
100%
The activity rate for the Order Processing activity cost pool is closest to:
Multiple…
Robin Company reported the following costs for the current month:
Direct materials used
Direct labor
Sales salaries
Indirect labor
Production manager's salary
Marketing costs
Factory lease
What are Robin's prime costs?
Multiple Choice
O
O
O
$60,800
$56,000
$75,200
$65.600
$ 24,000
36,800
19,200
4,800
9,600
14,400
6,400
PROBLEMS
Note the following information concerning the direct costs of each of the following four
departments:
1)
Supplied by:
HR
PM
Human Resources
$ 975,000
A)
B)
C)
D)
Human Resources
Plant
Maintenance
$1,300,000
Plant
Maintenance
15%
Cutting
Polishing
$7,685,000 $8,755,000
15%
Based on the above information, prepare the following
Allocate costs by the direct method.
Cutting
50%
45%
Polishing
35%
40%
Allocate costs by the step-down method (Human Resources first)
Allocate costs by the step-down method (Plant Maintenance first)
Allocate costs by the reciprocal method
Chapter 4 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 4 - Define committed costs and provide two examples of...Ch. 4 - Why is labor seldom a committed cost?Ch. 4 - Prob. 3DQCh. 4 - What are overbillings and how do they occur?Ch. 4 - Prob. 5DQCh. 4 - What are the six key principals of internal...Ch. 4 - What should you look for in a construction...Ch. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - Prob. 10P
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