Amesbury Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials...

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Amesbury Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials and direct labor) and one indirect-cost pool (assembly support). Direct labor-hours is the allocation base for assembly support costs. In December 2019, Amesbury budgets 2020 assembly-support costs to be $8,000,000 and 2020 direct labor-hours to be 160,000. At the end of 2020, Amesbury is comparing the costs of several jobs that were started and completed in 2020. Requirements 1. Compute the (a) budgeted indirect-cost rate and (b) actual indirect-cost rate. Why do they differ? 2. What are the job costs of the Laguna Model and the Mission Model using (a) normal costing and (b) actual costing? 3. Why might Amesbury Construction prefer normal costing over actual costing? Data table Laguna Model Construction period Feb-June 2020 Mission Model May-Oct 2020 Direct materials costs $ 106,550 $ 127.970 Direct labor costs $ 36.250 $ 41.320 Direct labor-hours 970 1,060 Direct materials and direct labor are paid for on a contract basis. The costs of each are known when direct materials are used or when direct labor-hours are worked The 2020 actual assembly-support costs were $8,016,000, and the actual direct labor-hours were 167,000 X differ? irect cost Amesbury Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials and direct labor) and one indirect-cost pool (assembly support). Direct labor-hours is the allocation base for assembly support costs. In December 2019, Amesbury budgets 2020 assembly-support costs to be $8,000,000 and 2020 direct labor-hours to be 160,000. At the end of 2020, Amesbury is comparing the costs of several jobs that were started and completed in 2020. Requirements 1. Compute the (a) budgeted indirect-cost rate and (b) actual indirect-cost rate. Why do they differ? 2. What are the job costs of the Laguna Model and the Mission Model using (a) normal costing and (b) actual costing? 3. Why might Amesbury Construction prefer normal costing over actual costing? Data table Laguna Model Construction period Feb-June 2020 Mission Model May-Oct 2020 Direct materials costs $ 106,550 $ 127.970 Direct labor costs $ 36.250 $ 41.320 Direct labor-hours 970 1,060 Direct materials and direct labor are paid for on a contract basis. The costs of each are known when direct materials are used or when direct labor-hours are worked The 2020 actual assembly-support costs were $8,016,000, and the actual direct labor-hours were 167,000 X differ? irect cost