ACG 3341-1 ACG3341-1 Individual Week 4

ACG 3341-1 ACG3341-1 Individual Week 4


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ACG 3341-1 Individual Week 4

Exercise 4-19: Budgeted manufacturing overhead rate, allocated manufacturing overhead

Gammaro Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2014:

Budgeted manufacturing overhead costs            $4,200,000                                                                           Budgeted machine-hours                                           175,000                                                                      Actual manufacturing overhead costs           $4,050,000                                                                       Actual machine-hours                                                170,000

Exercise 4-23: Accounting for manufacturing overhead

Jamison Woodworking uses normal costing and allocates manufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor-hours. Under or over allocated overhead, if immaterial, is written off to Cost of Goods Sold. During 2014, Jamison recorded the following:

Exercise 4-24: Job costing, journal entries

The University of Chicago Press is wholly owned by the university. It performs the bulk of its work for other university departments, which pay as though the press were an outside business enterprise. The press also publishes and maintains a stock of books for general sale. The press uses normal costing to cost each job. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead, allocated on the basis of direct manufacturing labor costs).

Exercise 4-28: Job costing: actual, normal, and variation from normal costing

Cheney & Partners, a Quebec-based public accounting partnership, specializes in audit services. Its job-costing system has a single direct-cost category (professional labor) and a single indirect-cost pool (audit support, which contains all costs of the Audit Support Department). Audit support costs are allocated to individual jobs using actual professional labor-hours. Cheney & Partners employs 10 professionals to perform audit services.

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