Question : 71) General Hospital uses an indirect overhead job costing system : 1196230

 

71) General Hospital uses an indirect overhead job costing system for all patients. In March the critical care and special care facilities had budgeted allocation bases of 4,000 nursing days and 3,000 nursing days, respectively. The budgeted nursing care charges for each department for the month were $2,106,000 and $1,500,000, respectively. The general care area had budgeted costs of $2,700,000 and 7,500 nursing days for the month.

 

Patient Jim Hansen spent 5 days in critical care and 4 days in special care during April.

 

Required:

 

a.Determine the budgeted overhead rate for each department.

b.What are the total charges to Mr. Hansen if he was in the facility the entire month? 71)

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72) Fox Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to

allocate manufacturing overhead costs to the various jobs contracted during the year. The following

estimates are provided for the coming year for the company and for the Maize High School Science

Olympiad Jacket job.

 

CompanyMaize High School Job

Direct materials              $50,000              $500

Direct manufacturing labour              $10,000              $100

Manufacturing overhead costs              $40,000

Machine-hours              100,000 mh              800 mh

 

Required:

 

a.For Fox Manufacturing, determine the annual manufacturing overhead cost-allocation rate.

 

b.Determine the amount of manufacturing overhead costs allocated to the Maize High School job.

 

c.Determine the estimated total manufacturing costs for the Maize High School job.

 

 72)

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73) Beacon Company does residential real estate appraisals. There are 40 professionals on its staff. Each professional is allotted the following number of hours per year:

 

Budgeted billable time for clients:

 

 

 

 

 

1,800 hours

Budgeted vacation time:

 

 

 

 

 

 

 

 

 

 

 

 

180 hours

Budgeted professional development:

 

 

 

 

 

 

 

 100 hours

Budgeted unbillable time due to lack of demand:

 

0 hours

Budgeted sick leave:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

120 hours

 

The company receives more jobs than it can handle and therefore rejects most out-of-town work. The budgeted salary for each professional is $44,000 per year with fringe benefits of $11,000.

 

During the previous year, the actual salaries were $46,500, plus fringe benefits of $11,500.

 

Required:

 

a.What was the total budgeted direct cost rate if the company believes that clients should be charged directly for its employees’ benefits?

b.What was the budgeted direct cost rate if the company does not want to charge clients directly for employee vacation, sick leave, and professional development?

c.What was the actual direct cost rate if the clients are charged directly for the employees’ benefits? 73)

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74) Landscape Architects provides landscape consulting services to clients that range from small businesses to large corporations. The budgeted rate for consulting per hour is $100. The budgeted overhead charge for customer-support costs per hour is $45 and the budgeted direct-cost rate is $25 per hour. Jobs #200 and #201 for Sheridan College incurred 90 and 240 hours-respectively. Each job included one licensed architect, the supervisor, and two assistants. The architect worked 12 hours on Job #200 and 60 hours on Job 201. The budgeted hourly rates charged to jobs are $30 for the architect and $15 for the assistants.

Required:

a.Identify the cost objects.

b.Determine the costs of each cost object using budgeted overhead rates. 74)

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75) Hill Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to

products. Manufacturing overhead costs are applied on the basis of machine-hours in the Machining

Department and on the basis of direct labour-hours in the Assembly Department. At the beginning of

2007, the following estimates were provided for the coming year:

MachiningAssembly

Direct labour-hours10,000 dlh90,000 dlh

Machine-hours100,000 mh5,000 mh

Direct labor cost$

80,000$720,000

Manufacturing overhead costs$250,000$360,000

 

The accounting records of the company show the following data for Job #846:

 

MachiningAssembly

Direct labour-hours50 dlh120 dlh

Machine-hours170 mh10 mh

Direct material cost$2,700$1,600

Direct labor cost$

400$

900

 

 

Required:

a.Compute the manufacturing overhead allocation rate for each department.

 

b.Compute the total cost of Job #846.

 

c.Provide possible reasons why Hill Manufacturing uses two different cost allocation rates.

 

 75)

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76) A local attorney employs 10 full-time professionals. The budgeted compensation per employee is $75,000. The maximum billable hours for each client is 200. Clients always receive their full amount of time. All professional labour costs are included in a single direct-cost category and are traced to jobs on a per-hour basis. Any other costs are included in a single indirect-cost pool, allocated according to professional labour-hours. Budgeted indirect costs for the year are $1,000,000 and the firm had 20 clients.

 

Required:

 

a.What is the direct-labour cost rate per hour?

b.What is the indirect-cost rate per hour? 76)

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77) The Dougherty Furniture Company manufactures tables.

In March, the two production departments had

budgeted allocation bases of 4,000 machine-hours in Department 100 and 8,000 direct manufacturing

labour-hours in Department 200.

The budgeted manufacturing overheads for the month were $57,500

and $62,500, respectively.

For Job A, the actual costs incurred in the two departments were as follows:

 

Department 100Department 200

Direct materials purchased on account$110,000$177,500

Direct materials used 32,50013,500

Direct manufacturing labour 52,50053,500

Indirect manufacturing labour 11,0009,000

Indirect materials used 7,5004,750

Lease on equipment16,2503,750

Utilities1,0001,250

 

Job A incurred 800 machine-hours in Department 100 and 300 manufacturing labour-hours in Department 200.

The company uses a budgeted overhead rate for applying overhead to production.

 

Required:

a.Determine the budgeted manufacturing overhead rate for each department.

b.Prepare the necessary journal entries to summarize the March transactions for Department 100.

c.What is the total cost of Job A?

 

 77)

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78) Jordan Company has two departments, X and Y.

Overhead is applied based on direct labour cost in

Department X and machine-hours in Department Y.

The following additional information is available:

 

 

Budgeted AmountsDepartment XDepartment Y

Direct labour cost $180,000$165,000

Factory overhead$225,000$180,000

Machine-hours51,000 mh40,000 mh

 

Actual data for Job #10Department XDepartment Y

Direct materials requisitioned$10,000$16,000

Direct labour cost$11,000$14,000

Machine-hours5,000 mh3,000 mh

 

Required:

a.Compute the budgeted factory overhead rate for Department X.

b.Compute the budgeted factory overhead rate for Department Y.

c.What is the total overhead cost of Job 10?

d.If Job 10 consists of 50 units of product, what is the unit cost of this job?

 78)

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79) A wholesale automobile company that buys and resells cars has the following data for June:

 

ActualBudget

Units bought2,6002,500

Units sold2,5002,400

 

CostAssignmentActualBudget

Total cost of sales# of units sold$30,000,000$26,400,000

Buyers’ expenses# of units bought162,000175,000

Cleaning of sold unitsCleaning dept.150,000156,000

Customer relationsSales support244,000213,000

Rent on showroom # of units bought20,00020,000

Sales staff commissions# of units sold300,000264,000

UtilitiesSales support3,5003,000

 

Required:

 

a.

Identify the cost object. Identify each direct & indirect cost category.

a.Compute the direct and indirect costing rates for the cost object using actual and normal costing techniques.

b.Calculate the total cost assigned to the cost object under each costing rate method. 79)

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80) Correct the following journal entry, and explain your changes.

 

Manufacturing overhead control32,000

Work-in-process-control32,000

(machinery repair) 80)

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81) Job-cost records for Boucher Company contained the following data:

Total Cost

DateDateDateof Job

Job No.StartedFinishedSoldat June 30

220May

18June 12June 20$6,000

221May

20June 19June 214,000

222June

7July

5July 127,000

223June 10June 28July

16,500

224June 19July 16July 258,000

 

Required:

a.Compute WIP inventory at June 30.

b.Compute finished goods inventory at June 30.

c.Compute cost of goods sold for June.