Reference no: EM132721639
Problems
Consider the following cost items:
I. Salaries of plajers on the ILnton Red Sox.
2. Year-end completed goods of I xvi Strauss jeans.
3. Executive compensation comsat Home Depot.
4. Advertising costs for Sony.
5. Cs w. incurred during the period to insure a Fonl plant against lire and flood lonses.
6. Current year's depreciation on a ('arnival Cruise line ship.
7. The cost of printer ink and paper used during the period by Shotter11).
8. Absembly-line wage cost incurred at a Kona bicycle plant.
9. Year-end production in process at I xnoso computer manufacturer.
10. The cow of products sold to flISIOUVIN of a Target gore.
II. The tow of products sold to distributors of carpet manufacturer Shaw Hoses.
1. Evaluate the cosh just cited. and determine whether the associated dolls amounts would be found on the firm's balance sheet. income statement. or schedule of ows-of-goods•manufactuted. (Note: In some cases. more than one answer will apply.)
2. What main woo will normally he intionitleant fne aerviee enleowhe, and relatively orwtantial
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.
L02-3 Describe the role of costs in published financial statements. The cost of goods sold is an
expense on the income statement. Inventory on the balance sheet is measured at its emt, as arc all assets.
L02-4 List and describe four types of manufacturing processes. The four basic types of manufac¬turing processes are job shop. batch, assembly line. and continuous flow.
The firm's partners desire to make a 5640.000 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. 541.000; administrative support staff. $2.600: travel. 54.503; photocopying. 5500; and other operating costs. 51.400.
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. Now 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.