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Assignment 1 for module 2
Provide the journal entry used to record each of the following transactions:
- Raw materials totaling $35,000 are purchased on account.
- Direct materials totaling $4,000 are requisitioned and placed into production.
- Timesheets submitted by employees reflect direct labor costs of $1,500, to be paid the next week.
- Which of the previously stated entries must also be recorded on the appropriate job cost sheet? Why?
Assignment 2 Module 2
Kline Company expects to incur $600,000 in overhead costs this coming year—$100,000 in the Cut and Polish department and $500,000 in the Quality Control department. Total annual direct labor costs are expected to be $120,000. The Cut and Polish department expects to use 18,750 machine hours, and the Quality Control department plans to use 37,500 hours of direct labor time for the year.
Required:
- Assume that Kline Company allocates overhead costs with the plant-wide approach, and direct labor cost is the allocation base. Calculate the rate used by the company to allocate overhead costs.
- Assume that Kline Company allocates overhead costs with the department approach. Calculate the rate used by each department to allocate overhead costs.
Assignment 3 module 2
In a two- to three-page journal, consider activity-based costing (ABC) management within a manufacturing firm. Describe the purpose and extent of activity-based costing. Within the analysis explain the five steps used in activity-based costing to determine costs.
- Be sure to provide an example from your company or from one that you are familiar with that illustrates its use in allocating costs.
- Conclude your journal by contrasting ABC with job costing.
- Provide at least two scholarly sources.
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