construct building etc., under a contract. In the history of costing, when contract costing was introduced as a method of costing, financial accounting already had a system of accounting for construction contracts. The same system was adopted under cost accounting as well. This is the reason why contract costing has more linkage with financial accounting concepts. The parties involved under a construction contract: 1. Contractor, who undertakes to construct any building etc. 2. Contractee
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equipment, which is in the last year of its depreciable life. Department N’s equipment is about half depreciated. Department C’s equipment is in the second year of its life. The budget prepared for each department in 2010 included the following costs, volumes, and overhead rates (given in millions of dollars): | A | B | C | Expected number of units | 73M | 73M | 55M | Fixed overhead | | | | General expense | $1.5M | $2.0M | $1.25M | Rent | $1.5M | $2.0M | $1.75M |
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Introduction Costs fall into two categories: direct and indirect. Direct costs are those costs which can be attributed to a specific final cost objective(s); alternatively, indirect costs are those costs which have no specific cost objective. An example of a direct cost might be the costs associated with salaries of "hands-on" personnel, e.g., engineers supporting a particular project. An indirect cost might be the office supplies those engineers use, the cost of rent on a facility in which
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manufacturing cycle efficiency of this process: MCE = (3+2)/200 = 2.5% Ex23.) a. Total support cost = $250,000 + $80,000 = $330,000 Partner hours = 4 x 2,000 = 8,000 Staff hours = 10 x 2,500 = 25,000 Total hours = 8,000 + 25,000 = 33,000 hours Support rate per hour = $330,000 ÷ 33,000 = $10 b. Total hours = 50 + 200 = 250 Total support cost = 250 x $10 = $2,500 c. Professional support rate per hour = $250,000 ÷ 33,000 = $7.58 (rounded)
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Cap 2. Job Order Costing Cost accounting involves the procedures for measuring, recording, and reporting product cost. From the data accumulated, companies determine the total cost and the unit cost of each product. The two basic type of cost accounting system are job order cost and process cost. Under a job order cost system the company assigns cost to each job or to each batch of goods. A company uses process cost system when it manufactures a large volume of similar products. Production
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Homework Chapter 3 # 13 Required: a. Calculate the cost per equivalent unit for materials & conversion costs. Materials = $446,970 / (45,000 + 2,550)= $9.40 Conversion Cost = $407,880 / (45,000 + 1,350) = $8.80 b. Calculate the cost of items completed during November. 45,000 x $18.20 = $ 819,000… $18.20 came by adding $9.40 + 8.80 c. Calculate the cost of ending Work in Process Material Cost: (2,550 x $9.40) = $23,970 Conversion: (1,350
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respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is: A. the same as the number of units put into production. B. less than the number of units put into production. C. the same as the number of units completed. D. less than the number of units completed. 2. Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under the weighted-average
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Introduction to Managerial Accounting AIU Online Abstract This paper is going to cut cost for an uptown clinic. It will tell where the cuts should take place in order not to hurt the day to day functioning of the clinic. It will describe how managerial accounting is different from cost accounting and describe the lean production philosophy. It will compare and contrast accounting principles in lean production to those of typical production. The paper will advise the Dr.on how to prepare for
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Limited. Standard Costs Predetermined. Standard Costs are Used for planning labour, material and overhead requirements. Benchmarks for measuring performance. Used to simplify the accounting system. © 2008 McGraw-Hill Ryerson Limited. Standard Costs Managers focus on quantities and costs that exceed standards, a practice known as management by exception. Amount Standard Direct Material Direct Labour Manufacturing Overhead Type of Product Cost © 2008 McGraw-Hill Ryerson
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Direct Cost November 27, 2011 Direct labor cost is the prices charged for the production of specific goods or services. Direct costs refer to materials, labor and expenses related to the production of a product. Direct labor is labor directly associated with the work being produced (Murphy, p. 98). Other direct labor is labor readily identifiable with a particular objective such as a contract and labor important enough to warrant identifying and measuring so we can keep up with its cost (Murphy
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