BUS FPX 4064 Assessment 2 Applying Cost Accounting Concepts to Analyze and Estimate Costs

• BUS FPX 4064 Assessment 2 Applying Cost Accounting Concepts to Analyze and Estimate Costs.

Applying Cost Accounting Concepts to Analyze and Estimate Costs

Product and Service Costing

6-52 Two-Stage Allocation and Product Costing

Call-Related Overhead Rate:

• Total Call-Related Costs: $200,000
• Total Number of Calls: 20,000 (Tourist) + 12,000 (Premier) = 32,000
• Call-Related Overhead Rate: $200,000 / 32,000 = $6.25

Call Minute-Related Overhead Rate:

• Total Call Minute-Related Costs: $121,500
• Total Call Minutes: 108,000 (Tourist) + 162,000 (Premier) = 270,000
• Call Minute-Related Overhead Rate: $121,500 / 270,000 = $0.45

Total Call Center Costs Allocated:

To Tourist Package:

• (20,000 calls * $6.25) + (108,000 minutes * $0.45)
  = $125,000 + $48,600 = $173,600

To Premier Package:

• (12,000 calls * $6.25) + (162,000 minutes * $0.45)
  = $75,000 + $72,900 = $147,900

Operations Costing

6-57 Cost Estimation for RV Models (Piper Recreational Vehicles)

Materials Cost:

• XC-2: 54 * $40,000 = $2,160,000
• XC-6: 39 * $70,000 = $2,730,000
• Total Materials Cost: $4,890,000

Conversion Cost:

• $905,550 + $735,120 + $633,180 = $2,273,850

Allocation of Conversion Costs:

• XC-2: ($2,273,850 * $2,160,000 / $4,890,000) = $1,004,400
• XC-6: ($2,273,850 * $2,730,000 / $4,890,000) = $1,269,450

Total Costs per Model:

• XC-2: $2,160,000 + $1,004,400 = $3,164,400
• XC-6: $2,730,000 + $1,269,450 = $3,999,450

Job Costing

7-55 Analysis of Overhead Using Predetermined Rate

Predetermined Overhead Rate:

• Overhead = $576,000 + $384,000 = $960,000
• Direct Materials = $400,000
• Predetermined Rate = $960,000 / $400,000 = 2.4 or 240%
• (Given: Use 225% for calculations below)

Job WM-52 Total Cost:

• Direct Labor: 900 * $22 = $19,800
• Overhead: $11,300 * 225% = $25,425
• Total Cost: $13,500 (DM) + $11,300 (MOH) + $19,800 + $25,425 = $70,025

Job WM-54 Overhead Applied:

• $6,400 * 225% = $14,400

Total Overhead Applied in May:

• Total Direct Materials: $11,300 + $9,400 + $6,400 = $27,100
• Total Overhead: $27,100 * 225% = $60,975

Actual Factory Overhead:

• Supplies: $1,500
• Indirect Labor: $8,000
• Supervisory Salaries: $9,000
• Factory Facilities: $22,500
• Equipment Costs (Power: $12,000, Repairs: $8,500, Other: $11,500) = $32,000
• Total Overhead: $73,000

Overapplied Overhead Adjustment:

• Add $48,000 to Cost of Goods Sold (not material)
• New Account Balances:
  • Work-in-Process Inventory: $19,800
  • Finished Goods Inventory: $176,300
  • Cost of Goods Sold: $1,803,900 + $48,000 = $1,851,900
  • Underapplied Overhead: $0

BUS FPX 4064 Assessment 2 Applying Cost Accounting Concepts to Analyze and Estimate Costs

Service Company Job Costs

7-63 Revenue and Cost Per Client

Revenue:

• Selden Contracting: 270 hrs * $500 = $135,000
• Moenhart Insurance: 170 hrs * $500 = $85,000
• Englewood Medical Center: 230 hrs * $500 = $115,000
• Total Revenue: $335,000

Costs:

• Direct Labor: $83,750
• Overhead: $53,600
• M&A Expenses: $57,000
• Total COGS: $137,350
• Net Income: $335,000 – $137,350 – $57,000 = $140,650

Process Cost Accounting

8-49 Production Cost Report (FIFO Method)

Equivalent Units:

• Transferred-In Costs: 75,000 (Completed) + 16,800 (Ending WIP) = 91,800 units
• Conversion Costs: 75,000 + 16,800 − 2,600 = 89,200 units

Cost Per Equivalent Unit:

• Transferred-In: $82,500 / 91,800 = $0.898
• Conversion: $53,060 / 89,200 = $0.595

Completed Units:

• Transferred-In: 75,000 * $0.898 = $67,350
• Conversion: 75,000 * $0.595 = $44,625

Ending WIP (13,000 units):

• Transferred-In: 13,000 * $0.898 = $11,674
• Conversion: 13,000 * $0.595 = $7,735