Question

In: Accounting

How are the costs of jobs calculated?

How are the costs of jobs calculated?

Solutions

Expert Solution

  • The cost of jobs are calculated as:

#1: Direct material cost of material used for that job is added.

#2: Direct labor cost incurred is also added.

#3: Indirect material, Indirect Labor, Factory Overheads are then applied to the job on the basis of certain predetermined Overhead rate.

These are form cost of the job.

  • Example: In Job 309, $ 20,000 direct material is used with $ 15,000 of direct labor cost. Overheads are applied at 150% of direct labor cost.

In the given case, Cost of the job will be:

A

Direct material cost

$            20,000.00

B

Direct Labor cost

$            15,000.00

C = B x 150%

Overheads applied

$            22,500.00

D = A+B+C

Cost of the job

$            57,500.00


Related Solutions

How is taxable income calculated in respect to capitalization of costs? What are the characteristics of...
How is taxable income calculated in respect to capitalization of costs? What are the characteristics of an expense for it to be capitalized? What is the principle behind capitalizing expenses? Should you capitalize cost for the sole purpose of minimizing the organization’s tax burden?
3. Explain how companies assign manufacturing overhead costs to individual jobs.
3. Explain how companies assign manufacturing overhead costs to individual jobs.
Completely and thoroughly explain how Total Product Costs would be calculated to determine the total cost...
Completely and thoroughly explain how Total Product Costs would be calculated to determine the total cost to make an electric coffee maker for a company that makes a variety of small home appliances. Include as much detail as possible and do not simply discuss the broad major cost categories of direct materials, direct labor, and manufacturing overhead.
What is subscription? How is it calculated?
What do you mean by the term "subscription" in accountancy? How is it calculated?
If revising depreciation, how is it calculated?
If revising depreciation, how is it calculated?
Whar is MACRS Depreciation and how it is calculated
Whar is MACRS Depreciation and how it is calculated
Define "marginal product". How is it calculated? How is it used?
Define "marginal product". How is it calculated? How is it used?
Transportation Costs - (A) Why is it easy to explain the massive relocation of U.S. jobs...
Transportation Costs - (A) Why is it easy to explain the massive relocation of U.S. jobs in areas like call centers to countries like India, Mexico, and Costa Rica over the past twenty years? (SHOW FORMULA USED TO SOLVE PROBLEM) (B) Costa Rican schools teach English and Spanish to all students. But very few people ever leave Costa Rica to live in the U.S. Why is Costa Rica so focused on having a bilingual workforce? (SHOW FORMULA USED TO SOLVE...
part 1) One weakness of CPI is that it cannot be calculated until all the costs...
part 1) One weakness of CPI is that it cannot be calculated until all the costs for a specific analysis period have been entered into the accounting system. Because suppliers and subcontractors usually bill the project at the end of the month, the CPI can only be calculated monthly, limiting its use as a cost control tool. Group of answer choices true false part 2) A LCPI greater than 1.0 does not necessarily mean the project cost is under the...
You have calculated the NPV and IRR for two investment projects based on the costs and...
You have calculated the NPV and IRR for two investment projects based on the costs and cash flows, but you can only select the best one to choose between project A, and Project B. Based on the following data, which one will you select, and why? Project A Project B NPV : $10,000 $9,000 IRR : 10% 12%
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT