03 Jan 3. What percentage

Job-Order Costing

Complete Problems 2-37 and 3-47 in the textbook.

Complete Problem 2-37 in a Word document and Problem 3-47 in Excel. Please note, you must show your work in Excel, which includes providing the formulas in the cells, not just the summary value. You may not earn full points if you do not show your work in detail.

Save your assignment (Word) as Lastname_FirstnameACC650_T1.docx.

Save your assignment (Excel) as Lastname_FirstnameACC650_T1.xlsx.

You are not required to submit this assignment to LopesWrite.

Due Date: 09-Oct-2019 at 11:59:59 PM

Problems

Problem 2–37

Content of Financial Statements

and Reports

(LO 2-3, 2-4)

Consider the following cost items:

1. Salaries of players on the Boston Red Sox.

2. Year-end completed goods of Levi Strauss jeans.

3. Executive compensation costs at Home Depot.

4. Advertising costs for Sony.

5. Costs incurred during the period to insure a Ford plant against fire and flood losses.

6. Current year’s depreciation on a Carnival Cruise Line ship.

7. The cost of printer ink and paper used during the period by Shutterfly.

8. Assembly-line wage cost incurred at a Kona bicycle plant.

9. Year-end production in process at Lenovo computer manufacturer.

10. The cost of products sold to customers of a Target store.

11. The cost of products sold to distributors of carpet manufacturer Shaw Floors.

Required:

1. Evaluate the costs just cited, and determine whether the associated dollar amounts would be found

on the firm’s balance sheet, income statement, or schedule of cost-of-goods-manufactured. (Note:

In some cases, more than one answer will apply.)

2. What major asset will normally be insignificant for service enterprises and relatively substantial

for retailers, wholesalers, and manufacturers? Briefly discuss.

3. Briefly explain the major differences between income statements of service enterprises versus

those of retailers, wholesalers, and manufacturers.

JLR Enterprises provides consulting services throughout California and uses a job-order costing system

to accumulate the cost of client projects. Traceable costs are charged directly to individual clients; in

contrast, other costs incurred by JLR, but not identifiable with specific clients, are charged to jobs by

using a predetermined overhead application rate. Clients are billed for directly chargeable costs, overhead,

and a markup.

JLR’s director of cost management, Brent Dean, anticipates the following costs for the upcoming

year:

? Problem 3–47

Job-Order Costing in a Consulting

Firm

(LO 3-1, 3-2, 3-4, 3-8)

1. Traceable costs:

$2,500,000

Cost

Percentage of Cost Directly

Traceable to Clients

Professional staff salaries ………………………….. $2,500,000 ………………………………. 80%

Administrative support staff ……………………….. 300,000 ………………………………. 60%

Travel ………………………………………………………. 250,000 ………………………………. 90%

Photocopying …………………………………………… 50,000 ………………………………. 90%

Other operating costs ……………………………….. 100,000 ………………………………. 50%

Total …………………………………………………….. $3,200,000 ……………………………….

The firm’s partners desire to make a $640,000 profit for the firm and plan to add a percentage

markup on total cost to achieve that figure.

On March 10, JLR completed work on a project for Martin Manufacturing. The following costs

were incurred: professional staff salaries, $41,000; administrative support staff, $2,600; travel, $4,500;

photocopying, $500; and other operating costs, $1,400.

Required:

1. Determine JLR’s total traceable costs for the upcoming year and the firm’s total anticipated

overhead.

2. Calculate the predetermined overhead rate. The rate is based on total costs traceable to client jobs.

3. What percentage of cost will JLR add to each job to achieve its profit target?

4. Determine the total cost of the Martin Manufacturing project. How much would Martin be billed

for services performed?

5. Notice that only 50 percent of JLR’s other operating cost is directly traceable to specific client

projects. Cite several costs that would be included in this category and difficult to trace to clients.

6. Notice that 80 percent of the professional staff cost is directly traceable to specific client projects.

Cite several reasons that would explain why this figure isn’t 100 percent.