60.1K

Verified Solution

Link Copied!

Part 2 - Sample costing flows and pricing for three customers (10 marks)

Box A Customer 1 + Material + Labour + Mfg. Overhead + Corp Overhead + Mark up = Floating Price Box D Customer 4 + Material + Labour + Mfg. Overhead + Corp Overhead + Mark up = Fixed Price

Box C Actual Customer 2 + Material to-date + Labour to date + Mfg. Overhead + Corp Overhead Costs to date Box C Forecast Customer 2 + Material + Labour + Mfg. Overhead + Corp Overhead + Mark up = Fixed Price Questions:

1. What type of costing system is illustrated above on this page? __________________________________________________________________________________

2. What is a potential issue with Customer 2 if the overhead allocation is based on a budget and actual results mean the allocation should have been higher. _________________________________________________________________________________________________

Question True False A. Factory (Mfg) overhead includes all manufacturing costs except direct materials and direct labour and is allocated based on overall direct labour hours worked. B. Labour in the Customer Boxes above (this page) are based on specific labour rates and hours worked on the particular job. C. Materials are tracked through a requisition system. D. Factory overhead applied represents the actual overhead costs incurred for the particular job. In Box A, this is the actual Mfg overhead incurred.

E. Material, Labour Costs, and Mfg Overhead in the Boxes above on this page would be recorded in Cost of Goods Sold when a sale is realized.

F. A job costing system is not applicable for a service company. G. The mark-up (i.e., profit) in the Box D is 20% of costs. If the manufacturing costs are $75,000 and corporate overhead is $25,000, the profit to the company is A = $20,000 or B = $15,000. Which is correct? A B H. Labour hours are tracked through a time ticket system. If the labour component of costs in G just above unexpectedly increased and manufacturing costs are now $80,000, the company would A= increase its profits or B = decrease its profits. Which is correct? A B 3. True and False questions Mark with X.

HRM 422C (001) Management Accounting for HR Part 2 - Sample costing flows and pricing for three customers (10 Box D Box A marks) Customer 4 Customer 1 Box C Actual + Material + Material Customer 2 Box C Forecast + Labour + Labour + Material to-date Customer 2 + Mfg. Overhead + Mfg. Overhead + Labour to date + Material + Corp Overhead + Corp Overhead + Mfg. Overhead + Labour + Mark up + Mark up + Corp Overhead + Mfg. Overhead = Fixed Price = Floating Price Costs to date + Corp Overhead + Mark up Questions: Fixed Price 1. What type of costing system is illustrated above on this page? 2. What is a potential issue with Customer 2 if the overhead allocation is based on a budget and actual results mean the allocation should have been higher. 3. True and False questions - Mark with X. True False Question A. Factory (Mfg) overhead includes all manufacturing costs except direct materials and direct labour and is allocated based on U.S

Answer & Explanation Solved by verified expert

See Answer