Week
9 P9-1, P9-2, P9-3, P9-4, P9-6 Principles of Cost Accounting - EXCEL
TEMPLATE
P9-1 Libby and Sandman,
Attorneys-at-Law, provided legal representation to Williams Equipment, Inc., in
a product liability suit. Twenty partner hours and 65 associate hours were
worked in defending the company. The cost of each partner hour is $325, which
includes partner wages plus overheard based on direct labor cost. The cost of
each associate hour is $145, which also includes both wages and overhead. Other
costs that can be directly identified with the job are travel ($2,800) and
telephone/fax charges ($1,740). The date Williams contracted with Libby and
Sandman was May 8, and the defense was successfully completed on December 21.
Required:
Prepare
a job order cost sheet, in good form, for Williams Equipment, Inc.
P9-2 The budget for the Murphy Equipment
Inc. job in P9-1 consisted of the following amounts:
Partners’
salary and
overhead
$6,300
Associates’
salary and
overhead
9,175
Travel
4,150
Telephone/fax
1,475
The
successful bid price of the job was $26,900.
Required:
Prepare
a cost performance report
Compute
the budgeted profit and the actual profit on the job.
P9-3 Lynn and Paul, partners in a systems
consulting firm, budgeted the following professional labor hours for the year
ended December 31, 2008:
Partners………………4,000Associates……………14,000
Staff………………….22,000
Partners
have a billing rate of $225 per hour and actually earn $110 per hour. Associates
bill out at $140 per hour and earn $85 per hour. Staff has a billing rate of
$95 per hour and earns $55 per hour.
Required:
Prepare
a revenue budget
Prepare
a professional labor budget
P9-4 Lynn and Paul, the systems
consultants in P9-3, budgeted overhead and other expenses as follows for the
year ended December 31, 2008:
Overhead
Depreciation-equipment…………….$60,000
Depreciation-building……………….135,000
Fringe benefits……………………….385,000
Photocopying…………………………95,000
Secretarial
support……………………465,000
Telephone/fax…………………………115,000
Utilities………………………………..193,000
Other expenses:
Travel…………………………………..$123,000
Meals…………………………………..37,000
Prepare
an overhead budget
Prepare
an other expenses budget
Prepare
a budgeted income statement
P9-6 Devine and O’Clock, architects,
have been using a simplified costing system in which all professional labor
costs are included in a single direct cost category (professional labor) and
all overhead costs are included in a single indirect cost pool (professional support)
and allocated to jobs using professional labor hours as the allocation base.
Consider two clients: Shank Products, which required 50 hours of design work
for a new addition; and Sayers Markets, which required plans for a new store
that took 20 hours to draw. The firm has two partners who each earn a salary of
$150,000 a year and four associates who each earn $60,000 per year. Each
professional has 1,500 billable hours per year. The professional support is
$590,000, which consists of $350,000 of design support and $240,000 of staff
support. Shank’s job required 30 hours of partner time and 20 hours of
associate time. Sayers job required 5 hours of partner time and 15 hours of
associate time.
Required:
Prepare
job cost sheets for Shank Products and Sayers Markets, using a simplified
costing system with one direct and one indirect cost pool.
Prepare
job cost sheets for the two clients; using an activity based costing system
with two direct cost categories (partner labor and associate labor) and two indirect
cost categories (design support and associate labor). Use professional labor
dollars as the cost allocation base for design support and use professional
labor hours for staff support.
SOLUTION PREVIEW
P9-2
|
Cost
Performance Report
|
||||
|
|
Actual Result
|
Budget
|
Variance
|
|
|
Partners' salary and overhead
|
$
6,500
|
$
6,300
|
$
(200)
|
U
|
|
Associates' salary and overhead
|
9,425
|
9,175
|
$
(250)
|
U
|
|
Travel
|
2,800
|
4,150
|
$
1,350
|
F
|
File name:
Week-9-P9-1-P9-2-P9-3-P9-4-P9-6.xls
File type:
application/vnd.ms-excel PRICE: $20
