j. a bus company k. a company offering broadband and telephone services 5.14 Cal
ID: 2544409 • Letter: J
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j. a bus company k. a company offering broadband and telephone services 5.14 Calculate cost-driver rates: job-costing system OBJECTIVES 1,2,3 Impact Visuals Pty Ltd produces annual reports and marketing materials for large companies. There are three categories of cost in its normal job-costing system: direct materials, direct labour and overhead (both variable and fixed), allocated on the basis of direct labour costs. Paula Preen, the management accountant, is concerned that clients are increasingly inclined to wait until the last minute to send in their final order causing congestion and an increase in the variable production overhead rate because of higher overtime and facility and machine maintenance. This spike is during the 'crazy' months of January, February and March, when many companies are rushing to get out their marketing materials. Paula obtains the following budgeted data for 2019 Home Insert Page Layout Formulas Data Review View Add-Ins Tota Jan-Mar ApriJune July-Sept Oct-Dec 2 Direct materials 3 Direct labour costs 90000 60000 $595 000 605000 $2 720 0 000 $280 000 $250 000 $270 000 $1200 Variable overhead costs as a 4 percentage of direct labour cost 5 Fixed overhead costs 90% 60% 60% 60% $300 000 300 000 300 000 300000 $1 20 Impact Visuals Pty Ltdprices each job at 125% of costs. The company has received an order labeled job 332, for 150000 sales catalogues for the local shopping centre. Actual direct materials costs for this job are $15000 and actual labour costs are $10000 REQUIRED 1. Caiculate the cost of job 332: if it is allocate overhead costs a. completed in January-March 2019 and the budgeted overhead rate for that quarter is used toExplanation / Answer
1. Cost of Job 332 a.Jan-Mar b.July-Sep. c. Av. Direct Materials 15000 15000 15000 Direct Labor costs 10000 10000 10000 VOH costs 90%*10000= 9000 60%*10000= 6000 67.5%*10000= 6750 FOH costs 300000/400000*10000= 7500 300000/250000*10000= 12000 1200000/1200000*10000= 10000 Total costs 41500 43000 41750 Budgeted OH rate/D.L.Hr. VOH 9000/10000= 0.9 6000/10000= 0.6 6750/10000 0.675 FOH 7500/10000 0.75 12000/10000= 1.2 10000/10000 1 Total OH Rate 1.65 1.8 1.675 2. Cost of Job 332 a.Jan-Mar b.July-Sep. Direct Materials 15000 15000 Direct Labor costs 10000 10000 VOH costs 90%*10000= 9000 60%*10000 6000 FOH costs(annual FC/Annual Lab. Cost) 10000 10000 10000 Total costs 44000 41000 Budgeted OH rate/D.L.Hr. VOH(9000/10000) 9000/10000= 0.9 6000/10000 0.6 FOH(7500/10000) 10000/10000= 1 10000/10000= 1 Total OH Rate 1.9 1.6
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