The top problem is what I need solved the bottom is what it is asking for but with a different example. Still requires all the same calculations just a different company and number.
Andrews 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 2016, Andrews budgets 2017 assembly-support costs to be $8,500,000 and 2017 direct labor-hours to be 170,000. At the end of 2017, Andrews is comparing the costs of several jobs that were started and completed in 2017. (Click the icon to view the data.) 1 Data Table Requirements - X Laguna Model Mission Model Construction period Direct materials costs Feb-June 2017 106,450 $ 36,276 $ May-Oct 2017 127,250 41,750 1,000 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 Andrews Construction prefer normal costing over actual costing? Direct labor costs Direct labor-hours 950 Print Done 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 2017 actual assembly-support costs were $7,470,000, and the actual direct labor-hours were 166,000. Print Done Requirement 1. Compute the (a) budgeted indirect-cost rate and (b) actual indirect-cost rate. Why do they differ? Identify the formula to calculate the budgeted indirect cost rate and then calculate the rate. Budgeted indirect costs Budgeted indirect cost rate = $ per DLH Identify the formula to calculate the actual indirect cost rate and then calculate the rate. Actual indirect costs Actual direct labor hours = = $ Actual indirect cost rate per DLH $ These rates differ because Requirement 2. What are the job costs of the Laguna Model and the Mission Model using (a) normal costing and (b) actual costing? (a) Identify the formula to calculate the indirect costs under normal costing and then calculate the indirect costs for each model. (Normal costing) Budgeted indirect cost rate x Actual direct labor hours Indirect costs Laguna per DLH x = $ Mission per DLH X Now calculate the total costs using normal costing for each model. Laguna model Mission model Normal costing Direct costs Indirect costs Total costs (b) Identify the formula to calculate the indirect costs under actual costing and then calculate the indirect costs for each model. (Actual costing) Actual direct labor hours 3 Indirect costs Actual indirect cost rate per DLH per DLH 'x x Laguna Mission Now calculate the total costs using actual costing for each model. Laguna Model Mission Model Actual Costing Direct costs Indirect costs Total costs Requirement 3. Why might Amesbury Construction prefer normal costing over actual costing? Amesbury Construction might prefer normal costing over actual costing because normal costing Amesbury can use this information to
