Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Destin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Destin allocates manufacturing

image text in transcribed
Destin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Destin allocates manufacturing overhead costs using direct manufacturing labor costs. Destin provides the following information: (Click the icon to view the information.) Requirement 4. Why might managers at Destin Products prefer to use normal costing? (Choose all that apply.) A. Manufacturing costs of a job are available much earlier in a normal costing system. Consequently, Destin's manufacturing and sales managers can evaluate the profitability of different jobs, the efficiency with which the jobs are done, and the pricing of different jobs as soon as they are completed, while the experience is still fresh in everyone's mind B. Normal costing allows managers to allocate overhead costs at the end of the accounting year. This allows Destin Products to use the normal costs incurred to provide an accurate costing method so that adjustments will not need to be made at the end of the accounting year C. Normal costing provides managers with information earlier-while there is still time to take corrective actions, such as improving the company's labor efficiency or reducing the company's overhead costs D. Normal costing enables Destin Products to use the budgeted manufacturing overhead rate determined at the beginning of the year to estimate the cost of a job as soon as the job is completed Managers want to know job costs for ongoing uses, including pricing jobs, monitoring and managing costs, evaluating the success of the job, learning about what did and did not work, bidding on new jobs, and preparing interim financial statements E. Normal costing provides managers with information at the end of a fiscal year when they know actual manufacturing overhead costs. This approach is preferable to managers to improve the company's spending efficiency and increase overall profits

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bucks The Next Step Advanced Medical Coding And Auditing 2019/2020

Authors: Elsevier

1st Edition

0323582613, 978-0323582612

More Books

Students also viewed these Accounting questions