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Exercises
4-1
Exercise 4-16
Job costing, process costing In each of the following
situations, determine whether job costing or process
costing would be more appropriate.
a)
b)
c)
d)
e)
f)
g)
h)
A CPA firm
An oil refinery
A custom furniture
manufacturer
A tire manufacturer
A handicraft studio
A pharmaceutical company
An advertising agency
An pet shop
Job costing
Process costing
Job costing
Process costing
Job costing
Process costing
Job costing
Job costing
4-2
A flour mill
A paint manufacturer
A medical care facility
A landscaping company
A cola-drink-concentrate producer
A movie studio
A law firm
A commercial aircraft manufacturer
A management consulting firm
A breakfast-cereal company
A catering service
A paper mill
An auto repair shop
Process costing
Process costing
Job costing
Job costing
Process costing
Job costing
Job costing
Job costing
Job costing
Process costing
Job costing
Process costing
Job costing
4-3
Exercise 4-18
Job costing, normal and actual costing.
Anderson Construction assembles residential
houses. It uses a job-costing system with two
direct-cost categories (direct materials and direct
labor) and one indirect-cost pool (assembly
support).
Direct labor-hours is the allocation base for
assembly support costs. In December 2007,
Anderson budgets 2008 assembly-support costs
to be $8,000,000 and 2008 direct labor hours to
be 160,000.
4-4
4-5
Budgeted Indirect
Costs
Budgeted Direct
Labor Hours
$8,000,000
160,000 hours
Actual Indirect
Costs
Actual Direct
Labor Hours
$6,888,000
164,000 hours
4-7
4-8