Budget Actual Indirect cost 173340 123950 DL hour 8100 6700 Company ABC is a bakery that specializes in making and selling customized baked goods for all occasions The company incurs direct materials, direct labor, and indirect costs It has a job costing system with one cost pool for its indirect costs, and it uses direct labor hours as its allocation base Company ABC has provided the following data about 2019 The Bell Birthday Job, which the company filled in July of 2019, was for 10 cupcakes, used $75 of direct materials, and required 5 hours of direct labor Company ABC pays its direct labor at a rate of $18 per hour Calculate the total cost of the Bell Birthday Job and the per unit cost of a cupcake using normal costing Calculate the total cost of the Bell Birthday Job and the per unit cost of a cupcake using actual costing Explain when Company ABC knows the cost of the Bell Birthday Job you calculated in each of the previous two questions Be specific your answers should include a month and year that you expect this information to be available and the reason why you chose that month and year Question 1 and Question 2 Which form of job costing would Company ABC most likely use and why Calculate the under or overallocated indirect costs for Company ABC in 2019 Prepare the adjusting journal entry to dispose of the under or overallocated indirect costs for Company ABC in 2019 using the writeoff to COGS method What is the impact of this entry on Company ABCs gross margin

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 27, 2024

Budget Actual Indirect cost 173340 123950 DL hour 8100 6700 Company ABC is a bakery that specializes in making and selling customized baked goods for

	Budget	Actual
Indirect cost	173340	123950
DL hour	8100	6700

Company ABC is a bakery that specializes in making and selling customized baked goods for all occasions. The company incurs direct materials, direct labor, and indirect costs. It has a job-costing system with one cost pool for its indirect costs, and it uses direct labor hours as its allocation base. Company ABC has provided the following data about 2019:

The Bell Birthday Job, which the company filled in July of 2019, was for 10 cupcakes, used $75 of direct materials, and required 5 hours of direct labor. Company ABC pays its direct labor at a rate of $18 per hour.

Calculate the total cost of the Bell Birthday Job and the per unit cost of a cupcake using normal costing.
Calculate the total cost of the Bell Birthday Job and the per unit cost of a cupcake using actual costing.
Explain when Company ABC knows the cost of the Bell Birthday Job you calculated in each of the previous two questions. Be specific your answers should include a month and year that you expect this information to be available and the reason why you chose that month and year. Question 1 and Question 2:
Which form of job costing would Company ABC most likely use and why?
Calculate the under- or overallocated indirect costs for Company ABC in 2019.
Prepare the adjusting journal entry to dispose of the under- or overallocated indirect costs for Company ABC in 2019 using the writeoff to COGS method. What is the impact of this entry on Company ABCs gross margin?