Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Using a job order costing system, Piedmont Computer Company estimated the total cost of two jobs as follows: (Click the icon to view the
Using a job order costing system, Piedmont Computer Company estimated the total cost of two jobs as follows: (Click the icon to view the estimates under job costing.) Piedmont Computer Company is now considering using an ABC system. Information about ABC costs and records for the same two jobs for 2024 follow: (Click the icon to view the ABC information.) (Click the icon to view the records for two clients.) Read the requirements. Requirement 1. Compute the total cost for each job using activity-based costing (ABC). The cost of direct labor is $25 per hour. Activity-based costing: Job 721 Job 722 Direct costs Total direct material costs Total direct labor costs Indirect costs: Asssembly costs Programming costs Testing costs Total costs 23.400 $ 2.500 19.500 1,500 625 75 2,730 210 1,000 250 47.255 4,535 Requirement 2. Is the job cost greater or less than that computed under standard costing for each job? Why? The cost of the Job 721 using ABC is less than the job cost under the standard costing (single-allocation base) system. Under the ABC costing system we can tell that this job is consuming fewer resources than was being accounted for under the single-allocation-base system, causing Job 721 to be over costed under the standard costing system. The cost of the Job 722 using ABC is greater than the job cost under the standard costing (single-allocation base) system. Under the ABC costing system we can tell that this job is consuming
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started