【正文】 the joborder cost sheet has been replaced with an electronic record. Instead of cabis with collections of joborder cost sheets, files are collections of job records located on disk or tape. 5. Materials requisition forms serve as the source document for posting materials usage and costs to individual jobs. Time or work tickets serve a similar function for labor. Predetermined overhead rates are used to assign overhead costs to individual jobs. 6. Multiple overhead rates often produce a more accurate assignment of overhead costs to jobs. 7. Activity drivers are those factors that drive or cause the consumption of overhead. Knowing what drives overhead costs allows a more accurate assignment of overhead costs to products. 8. Expected actual activity is the level of production activity expected for the ing year. Normal activity is the longrun average activity level. Practical activity is the level of activity achievable under efficient operating conditions. Theoretical activity is the level of activity achievable under ideal operating conditions. 9. Assignment using normal activity produces less fluctuation in periodtoperiod overhead assignments. It also avoids assigning the costs of idle capacity to products when production is down. 10. Many firms have multiple products, and adding units of different products will not produce a meaningful measure of output. 11. Unit cost: Direct materials ................... $ 7,500 Direct labor ........................ 10,000 Overhead ($5 1,000) ........ 5,000 Total ............................. $ 22,500 Unit cost = $22,500/500 = $45 12. More paperwork is required in a joborder system. Labor and materials are assigned to departments in a processcosting system. In a joborder system, labor and materials must be tracked to each job, requiring time tickets and more use of materials requisitions. Additionally, a joborder system requires a separate job sheet for each job. 13. The normal cost of goods sold uses applied overhead only. Adjusted cost of goods sold is 77 the normal cost of goods sold adjusted for an overhead variance (increased for underapplied and decreased for overapplied). 14. The cost of spoilage in this case is charged to Overhead Control, because the demands of the job itself did not lead to the spoilage. 15. In this case, the spoilage was due to the demands of this particular job and would be charged to the job. EXERCISES 5–1 1. Rainking Company should use joborder costing because each installation is unique and made to order. Materials may differ from job to job, as may direct labor. 2. Predetermined overhead rate = $65,000/5,000 = $13 per direct labor hour Wage rate = $75,000/5,000 = $15 per direct labor hour Direct materials ................................. $ 3,500 Direct labor ($15 50) ....................... 750 Overhead ($13 50) .......................... 650 Total cost ................................... $ 4,900 3. The pany cannot use an actual cost system。 it needs to know the cost of each installation as it is pleted. Since overhead is incurred unevenly throughout the year, and certain overhead bills arrive after the need for unit costs occur, overhead must be applied to production using a predetermined rate. 5–2 1. Waterpro should use a processcosting system because each watering system is like every other so the cost of direct materials, direct labor, and overhead stays constant from job to job. 2. If Waterpro uses an actual costing system, the average amounts for actual direct materials, actual direct labor, and actual overhead must be calculated for each month. Average Amounts June July August Direct materials ............... $ 200 $ 200 $ 200 Direct labor...................... 210 210 210 Overhead......................... 600 120 84 78 Total unit cost .......... $ 1,010 $ 530 $ 494 3. Predetermined overhead rate = $60,000/600 = $100 per system installed Unit cost per system = $200 + $210 + $100 = $510 The cost of the basic system does not change from month to month. 79 5–3 1. The two measures of activity level considered by Marcus are expected actual activity and theoretical activity. 2. Predetermined overhead rate using expected actual activity: Predetermined overhead rate = $9,000/(75 20 hours) = $6/hour Predetermined overhead rate using theoretical activity: Predetermined overhead rate = $9,000/(125 20 hours) = $ 3. Marcus should use expected actual activity because it is highly unlikely that he will approach the theoretical activity level, especially with a new business. The expected actual activity level will be more likely to spread the overhead over the actual jobs, without a large overhead variance. Notice that Marcus cannot use normal activity level because he has not been in business for a number of years. 5–4 1. Because the business is so small (Marcus is the only employee), all he really needs is a joborder cost sheet. Actually, a folder for each job would do. He would file all receipts for materials purchased (these are source documents)—or prorate to the particular job the cost of lumber, etc.—in the folder. He could also file notes recording his time spent on the job. Of course, he will need a good system for accumulating costs, since he may need to refer to those to calculate actual overhead and direct materials purchases. 2. Now, the business is considerably larger. Marcus will no longer be able to reconstruct job costs from memory, since he is not the only one working on the various jobs. Now, he will need labor time tickets to help workers keep track of the time spent on the jobs. A more formal joborder cost sheet will also be needed,