Ryerson 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
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responsibility assumed by the contractor for the costs of performance, and the amount and nature of the incentive offered to the contractor for achieving or exceeding specified standards or goals. Contract types are grouped into two broad categories; Fixed-price contracts and Cost-reimbursement contracts. The specific contract types range from firm-fixed price, in which the contractor has full responsibility for the performance costs and resulting profit (or loss), to cost-plus-fixed-fee, in which the contractor
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manufactures and sells two types of wooden deck chairs: Deluxe and Standard. Annual sales in units, direct labour hours (DLHs) per unit, and total direct labour hours per year are provided below. Deluxe deck chairs: 2,000 units × 5 DLHs per unit................. 10,000 Standard deck chair: 10,000 units × 4 DLHs per unit............... 40,000 Total direct labour hours 60,000 Cost for direct materials and direct labour for one unit of each
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Manufacturing Overhead Costs Allocation The report provided will assist you with selecting an allocation base to assign your budgeted manufacturing overhead costs of producing the two camera boxes the company manufactures. The report also addresses the questions and concerns you had regarding the allocation bases. First, the predetermined overhead rate is computed. The predetermined overhead rate is used to charge overhead costs to products or jobs. This rate is established in advance
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the constraint at Pizza World? A) the person who makes the pizza crust. B) the person who puts toppings on the pizzas. C) the pizza oven. D) any of the above could be the constraint. 2. The Standards of Ethical Conduct for Management Accountants developed by the Institute of Management Accountants contain a policy regarding confidentiality that requires management accountants to refrain from disclosing confidential information acquired in the
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Normal, Standard * Actual- Job order and process costing assign cost based on actual cost; actual DM, DL, and OH * Normal – Job order costing assign cost based on actual DM, DL, and OH is applied using predetermined rate at completion. Process Costing assign cost based on actual DM, DL, and OH is applied using predetermine rate using either FIFO or WA * Standard – Job order costing assigns cost based on the standard cost for DM,DL, and OH is applied using predetermined rate when
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| Budgeted | Actual | Overhead cost | $1,000,000 | $950,000 | Machine hours | 50,000 | 45,000 | Direct labor hours | 100,000 | 92,000 | | | What is the predetermined overhead rate based on machine hours? Estimated MOH = $1,000,000 = $20/MH Est. activity base 50,000 Machine hours (MH) If the company used a predetermined OH rate based on direct labor hours(LH), how much was the overhead over or under applied? POR=Predetermined Overhead Rate $1,000,000 = $10/LH
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Types of Contracts [pic] Choosing type appropriate contract type is essential to successful performance under a contract. The type of contract determines the cost and performance risks which are placed on the contractor. There are two broad contract groups--fixed price and cost reimbursement. Within each of these groups, there are various types of contracts which can be used individually or in combination. [pic] Firm Fixed Price Contracts [pic] This type of contract requires the contractor
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them to the picture of a “good” unit. Any differences are sent to a QC engineer, who removes the bad units and discusses the flaws with the production supervisors. The new system has replaced the 10 QC inspectors with two QC engineers. The operating costs of the new QC system, including the salaries of the QC engineers, have been included as factory overhead in calculating the company's plant-wide manufacturing-overhead rate, which is based on direct-labor dollars. The company's president is confused
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manufacturing overhead cost for the period by the estimated total amount of the allocation base and the formula of that is: Predetermined overhead rate= estimated total manufacturing overhead cost / estimated total of allocation base Indeed, it is calculated before period begins using several procedures: * Estimate the total amount of allocation base, * Then, estimate total fixed manufacturing overhead cost for period and total variable manufacturing overhead cost per unit of the allocation
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