Question 1 a. How do fixed costs in a business create a problem for job costing.b. Provide examples of wages that might be deemed to be (1) a direct cost and (2) an indirect costs.Question 2 Estimated or budgeted cost and operating data for three companies for 2013 are given below:Company X Company Y Company ZUnits to be produced 10,000 8,000 12,000Machine- hours 50,000 10,000 6,000Direct labour- hours 12,000 16,000 36,000Direct labour cost $48,000 $64,000 $150,000Factory overhead cost 150,000 40,000 60,000Predetermined overhead rates are calculated on the following bases in the three companies:Overhead rate based onCompany X Machine-hoursCompany Y Direct labour-hoursCompany Z Direct labour costRequired:a. Calculate the predetermined overhead rate to be used in each company during 2013.b. Assume that three jobs are worked on during 2013 in company X. Machine-hours recorded by jobs are: job 23, 21,000 hours; job 29, 16,000 hours; and job 31, 11,000 hours. How much overhead will the company apply to work in process? If actual overhead costs total $149,000 for 2012, will overhead be over- or under-applied? By how much? c. Of what value is the schedule of cost of goods manufactured and how does it tie into the profit and loss statement. Discuss.Question 3Tony’s Textile Company sells shirts for men and boys. The average selling price and variable cost for each product are as follows:Men's Boys'Selling Price $28.80 Selling Price $24.00Variable Cost $20.40 Variable Cost $16.80Fixed costs are $38,400.Required:a. What is the breakeven point in units for each type of shirt, assuming the sales mix is 2:1 in favor of men's shirts? b. What is the operating income, assuming the sales mix is 2:1 in favor of men's shirts, and sales total 9,000 shirts? c. What is meant by a product’s contribution margin ratio and how is this ratio useful in the planning of business operations? Question 4 Byron Sports is a manufacturer of sportswear. It produces all of its products in one departmentusing a process costing system.The information for the current month
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Question 1
a. How do fixed costs in a business create a problem for
b. Provide examples of wages that might be deemed to be (1) a direct cost and (2) an indirect costs.
Question 2
Estimated or budgeted cost and operating data for three companies for 2013 are given below:
Company X Company Y Company Z
Units to be produced 10,000 8,000 12,000
Machine- hours 50,000 10,000 6,000
Direct labour- hours 12,000 16,000 36,000
Direct labour cost $48,000 $64,000 $150,000
Predetermined overhead rates are calculated on the following bases in the three companies:
Overhead rate based on
Company X Machine-hours
Company Y Direct labour-hours
Company Z Direct labour cost
Required:
a. Calculate the predetermined overhead rate to be used in each company during 2013.
b. Assume that three jobs are worked on during 2013 in company X. Machine-hours recorded by jobs are: job 23, 21,000 hours; job 29, 16,000 hours; and job 31, 11,000 hours. How much overhead will the company apply to work in process? If actual overhead costs total $149,000 for 2012, will overhead be over- or under-applied? By how much?
c. Of what value is the schedule of cost of goods manufactured and how does it tie into the
Question 3
Tony’s Textile Company sells shirts for men and boys. The average selling price and variable cost for each product are as follows:
Men's Boys'
Selling Price $28.80 Selling Price $24.00
Variable Cost $20.40 Variable Cost $16.80
Fixed costs are $38,400.
Required:
a. What is the breakeven point in units for each type of shirt, assuming the sales mix is 2:1 in favor of men's shirts?
b. What is the operating income, assuming the sales mix is 2:1 in favor of men's shirts, and sales total 9,000 shirts?
c. What is meant by a product’s contribution margin ratio and how is this ratio useful in the planning of business operations?
Question 4
Byron Sports is a manufacturer of sportswear. It produces all of its products in one department
using a
The information for the current month
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