Of Mice And Men By John Steinbeck Essays - English-language Films

Of Mice And Men By John Steinbeck CONFLICT Protagonist: The protagonist of the story is George. He is the kind-hearted ranch hand who is concerned about his friend Lennie and watches out for him. Antagonist: The antagonist of the story is George's trying to care for the handicapped Lennie. Because he has a giant's body and a child's mind, Lennie accidentally kills Curley's wife; at the same time he kills the dream of owning a farm that has kept George and Lennie positive about the future Climax: The climax occurs when Lennie accidentally kills Curley's wife. George knows that he can no longer save Lennie, for Curley will want revenge. Outcome: Of Mice and Men ends in tragedy. George feels compelled to mercifully kill his friend and companion, Lennie, in order to save him from a brutal death. The death of Lennie also marks the death of the beautiful dream they have been nurturing. Table of Contents MOOD The dominant mood of the story is that of expectation. This mood is developed through the dreams of the major characters. The other mood that prevails is premonitory, of impending doom. There are also other moods evoked through the actions of the characters reflecting sorrow, pity, and brutality. The novel ends on a tragic note. The mood at the end is definitely one of depression and frustration. Table of Contents PLOT (Synopsis) One evening, two men, on their way to a ranch, stop at a stream near the Salinas River. George, who is short and dark, leads the way. The person following him is Lennie, a giant of a man with huge arms. During their conversation by the stream, George repeatedly asks Lennie to keep his mouth shut on the ranch, suggesting that Lennie has some kind of problem. After supper and before going to sleep, the two of them talk about their dream to own a piece of land. The next day, George and Lennie travel to the ranch to start work. They are given two beds in the bunkhouse. Then Old Candy introduces them to almost everybody on the ranch. They meet the boss and the boss's son Curley, who is quite rude. They also meet Curley's wife when she comes looking for her husband. She wears heavy make-up and possesses a flirtatious attitude. George warns Lennie to behave his best around Curley and his wife. He also suggests that they should meet by the pool if anything unfortunate happens to either of them on the ranch. George and Lennie are assigned to work with Slim, who is sensible and 'civilized' and talks with authority. George finds Slim an understanding confidante, and a bond forms between the two of OF MICE AND MEN KEY LITERARY ELEMENTS SETTING This book is set in two places. It starts beside a stream, close to the Salinas River, a few miles South of Soledad. It then moves to a ranch, where the major part of the story is set. At the end of the novel, the setting comes back to where it started. George and Lennie are introduced by the stream. They are on their way to a near-by ranch. The surrounding land is thick in vegetation and has its own wild life. Men frequent it, as there are ash piles made by many fires and the limbs of the sycamore tree have been smoothed by the many men who have sat on it. The ranch, where the major part of the story takes place, appears isolated and lonely. It includes a ranch house, a bunkhouse where the ranch workers live, a barn, and a harness-room off the barn. Table of Contents CHARACTERS Major Characters George - the protagonist and main character of the book. He is a caring, compassionate, and understanding human being who dreams of owning his own piece of land. Lennie - the obedient friend of George. He has a child's mind and a giant's body. It is these contrasting qualities that cause him problems. Old Candy - one of the lonely ranch workers. He is a cripple, working as a 'Swamper'. Crooks - a black ranch hand. He is sensible and neat, with a mind of his own. He is a lonely character,

Free Essays on Standing In The Shadows Of Motown

Standing in the Shadows of Motown was a very compelling movie to me. I had no idea that one core group of people did so much for the Motown scene. This one group of people named â€Å"The Funk Brothers† was the band behind most of the Motown hits. According to this movie, having a core of unique and original musicians with jazz backgrounds and influences was the foundation to create more hit songs then any other band in history. As in many genres of music, the Motown sound was defined by the incredible bass line, combined with the beats provided by the percussion. The original defining bassist, James Jameson, is considered one of the best bassist to have ever lived. He had an incredibly unique and fast sound that he played completely with one finger. Most good bassist have a hard time playing the same sound with multiple fingers. He wrote most of the early songs until he eventually died of a drug overdose. James Jameson was replaced with a number of bassists that for the most part tried to keep the sound James installed in The Funk Brothers sound. Another important side of the incredible sound can be defined by the percussion. The original drummer to define â€Å"The Funk Brothers† sound was a man by the name of Benny Benjamin. This drummer was said to have a original beat that both kept the tempo and defined a complimentary side beat. Like James he also died of an overdose. He was replaced by two drummers to capture the Benny sound. These two incredible musicians were the foundation builders of music. They allowed the other members of The Funk Brothers to build an incredible sound that defined Motown music. They were the backbone of almost every hit that came out of Motown.... Free Essays on Standing In The Shadows Of Motown Free Essays on Standing In The Shadows Of Motown Standing in the Shadows of Motown was a very compelling movie to me. I had no idea that one core group of people did so much for the Motown scene. This one group of people named â€Å"The Funk Brothers† was the band behind most of the Motown hits. According to this movie, having a core of unique and original musicians with jazz backgrounds and influences was the foundation to create more hit songs then any other band in history. As in many genres of music, the Motown sound was defined by the incredible bass line, combined with the beats provided by the percussion. The original defining bassist, James Jameson, is considered one of the best bassist to have ever lived. He had an incredibly unique and fast sound that he played completely with one finger. Most good bassist have a hard time playing the same sound with multiple fingers. He wrote most of the early songs until he eventually died of a drug overdose. James Jameson was replaced with a number of bassists that for the most part tried to keep the sound James installed in The Funk Brothers sound. Another important side of the incredible sound can be defined by the percussion. The original drummer to define â€Å"The Funk Brothers† sound was a man by the name of Benny Benjamin. This drummer was said to have a original beat that both kept the tempo and defined a complimentary side beat. Like James he also died of an overdose. He was replaced by two drummers to capture the Benny sound. These two incredible musicians were the foundation builders of music. They allowed the other members of The Funk Brothers to build an incredible sound that defined Motown music. They were the backbone of almost every hit that came out of Motown....

Writing Assignment #2 Example | Topics and Well Written Essays - 250 words

Writing #2 - Assignment Example The judgment in one country has to be recognized in the other. Italy for example in this case would have to recognize rulings from the court in the United States. This is because the court agreed upon and documented cannot be refuted unless there are grounds to show that it was not valid or lawful in either two states. The solving of disputes having been rendered to a particular state and court in writing shows that the other must recognize their rulings, foreign or not. A court may refuse to recognize or enforce a judgment if the agreement does not fall under the state of law of the country. This would mean that it is null and void. It would also be the case if the judgment was obtained through fraud. It would also be refuted if the defendant was not informed prior in order to create defense. If the judgment is not consistent with other rulings concerning the same parties, then it is refutable. Nielsen, Peter A. "Exclusive Choice of Court Agreements and Parallel Proceedings." A Commitment to Private International Law: Essays in Honour of Hans Van Loon: MeÃŒ langes En Lhonneur De Hans Van Loon. (2013):

African history Essay Example | Topics and Well Written Essays - 750 words

African history - Essay Example of how a powerful leader might approach changing ideologies within his own homeland in order to both reach the common people as well as the important figures at court. To understand how this came to be, a brief summary of Sundiata’s story is necessary. Born into a Muslim household to a deformed woman who seemed to have passed the idea of deformity onto her son, Sundiata’s beginnings were humble enough for a born prince. He is described as lazy, glutinous, seldom spoke and was unable to walk on his own. Nevertheless, his father provided him with a powerful griot in the belief that he would someday be king. Through a desire to help his mother stop crying, he was able to begin walking. To keep him safe from his elder half-brother, who had already sent his half-sister and griot away to the enemy king Suomaoro of Sosso, Sundiata and his mother fled to far-away lands where Sundiata learned how to hunt, fight and gained in wisdom. When he learned Suomaoro had overtaken his homeland of Mari, Sundiata returned, gathering fighters along the way. Through several battles involving aspects of both religions, Sundiata finally prevails over Suomaor o and founds an empire of his own. Elements of the traditional African religions can be seen traced throughout the book. Even before he is born, it was the voice of the soothsayers that led Sundiata’s father to marry his buffalo-woman mother, saying that one day he would make a great king. It is again the soothsayers of the old religions that have already prepared a great iron bar against that day when Sundiata would call for it in order to help him gain his feet. â€Å"The master of the forges, Farakourou, was the son of the old Nounfari, and he was a soothsayer like his father. In his workshops there was an enormous iron bar wrought by his father Nounfari. Everybody wondered what this bar was destined to be used for.† Witches are called to destroy him, but cannot because he is good of heart. His sister is also a

A Story About Courage Essay Example for Free

A Story About Courage Essay Waking up in the morning to birds chirping and the warm summer breeze is almost impossible when you live in the heart of New York City, well it is for me at least. My name is Sandy Collins, I’m your typical teenage girl. I like going out with my friends, having slumber parties, and going shopping. I moved from Texas to New York City a month and a half ago. The moment I stepped out of the car I instantly loved the change. It wasn’t that I didn’t enjoy living in Texas, but now living in New York felt like it made much more sense. As a child I did everything with my dad. Biking, fishing, rollerblading, you name it. I, Sandy Collins has done it. My dad always said he wanted a better life for me then what he had, he sure meant it. Back when I was almost eleven years old my parents got a divorce, great birthday present, huh? At first when I’d walk into the room where my parents would be arguing, they’d pretend they were only talking loud of some sort. But as the months went by, they didn’t even noticed when I’d enter the room. Soon after that my mom filed for a divorce, leaving me in the middle. It was hard to cope with it to begin with, but soon after that I realized I had no part in what happened. Now four years later here I am making the decision to move in with my dad. When I first mentioned moving to New York to my mom, her reaction was absolutely no. After mentioning it a few more times, giving her a month or two, she finally realized that I should be able to make my own decisions because in the end it’d make me happier. Now five months after, BAM! New York City here I come. The twelve hour drive was definitely the worst road trip, bonding time, or whatever my mom would wish to call it. She came up with a clever idea to shove me, my seven year old brother Ricky, my stepfather Joe, and herself in our beat up Toyota Tercel and take on the task to drive us all the way to New York for the last bonding time she’ll have with me in a long time. Not to mention we’re in the month of July. â€Å"Sweetie would you like something to eat? † mom said shaking my shoulder. I’d fallen asleep three hours into the drive. We ordered from the nearest fast food place, Mcdondalds, filling all our hungry appetites. After about ten hours I became so bored I started to play with the lose thread on my shirt. I could tell Ricky wasn’t having any more fun then I was considering he was opening and closing the screen of his Nintendo DS over and over and over again. The traffic became agony, there’s no doubt that you could put your car in park for five minutes and no would notice. Finally after hours of traffic we arrived at the house. Dad had just walked out the front door waving and smiling. â€Å"Dad! † I exclaimed while giving him a giant bear hug. â€Å"Hi hunny, I’m so glad you’re here. Dad said smiling. â€Å"Nice place you got here† Joe said examining it with his eyes. We’ve never been to dad’s place before, he’d always come to Texas to visit on special occasions and my birthday’s. â€Å"Now you be good, call whenever you have the time and no late night walks, New York is very different then back home. † Mom said. She kept going on until she had run out of things to say. â€Å"Okay, Okay mom. See you at thanksgiving, love you. † I said giving her a hug. I realized after saying that, that made her take-in how long it’d be until we’d see each other again. After saying goodbye to everyone I knew I’d miss each and everyone back home in Texas terribly but I had a feeling this was a change for the better. What we had left of the day, dad decided it’d be a good idea to show me around the neighbourhood. â€Å"Your hair is so straight and black now† dad said. â€Å"Yeah, I coloured it a few months ago. I thought it was time for some change, like moving here. † I said smiling. For the next month dad and I went fishing, rollerblading, shopping, and all the other things we used to do when mom and he were together. I even met a new friend, Paige. She’s the neighbour’s daughter; she told me we’d be attending the same school together up the street when school re-opens in two weeks. The next day we arranged to go shopping. â€Å"Hey dad, would it be okay if I go shopping with Paige today? † I said. â€Å"Sure hunny, I have to run a few errands and do some grocery shopping anyway, so I’ll drop you two off at the mall. † Dad said, smiling as always. Paige is so nice and out-going to be around. My friends in Texas were more down-to-earth. We would still go places and what not, but Paige’s personality screams fun. â€Å"We need to spice up your wardrobe, all of your out-fits are too toned down for NYC. † Paige said, trying on a vintage pair of black boots. After a couple of hours of shopping, we grabbed something to eat and went home. Home I kept thinking. I like it here, being with my dad made me so much happier. Walking down the busy streets of New York with the sound of cars honking, people shouting for taxis, bargainers trying to sell you their no more than $5 junk, was now what I got to call home. Oddly I loved it. When I got home I took my shopping bags to my room and headed downstairs to watch T. V while waiting on my dad to come home and make dinner. As I reached for the television remote the phone rang. â€Å"Hello, may I speak to Mr. Collins? † â€Å"He’s not home at the moment; would you like me to take a message? † â€Å"Sure, is this Ms. Collins? † â€Å"Yes it is. † I said, realizing soon after this person was probably referring to Ms. Collins as if I was my dad’s wife. A moment before I was about to correct myself, the person started speaking again. Oh, hi Ms. Collins, this is Tom’s doctor, Dr. Lee. Unfortunately I have to break the bad news to you; Tom’s cancer results have come in positive. He has cancer in his right lung and it’s too late to attempt to cure it. I’m extremely sorry to tell you this way; Tom’s appointment was re-scheduled in two weeks from now when school re-opens, he cancelled the appointment scheduled for today knowing he’d want to spend as much time with your daughter arriving from Texas before school started. When I got the results, knowing Tom for so long, I wanted him to know as soon as possible. † I didn’t know what to do, I held the phone to my ear ready to reply but my mind went blank. Eventually I replied and hung up the phone. Did I really just hear that? No, it couldn’t be. My dad couldn’t have cancer, he just couldn’t. Who am I kidding!? His doctor called for god sakes, I just didn’t want to believe it. Moments later my dad walked in the front door. â€Å"Hi hunny. † He said smiling.

Dantes Lucifer: The Denial of the Word :: The Divine Comedy

The four words constituting the first line of Inferno 34, however, are and are not Virgil's own words. On the most obvious level, these words are his own in that the text attributes them to him. At the same time, they are not his, since they are a quotation of the first line of a hymn by Venantius Fortunatus.3 And yet, the last word, inferni, must be attributed to Virgil under all respects, for he utters it without borrowing it from the hymn that Venantius Fortunatus wrote in honor of the cross and Christ. Through Virgil, Dante the auctor, therefore, rewrites and parodies this sacred hymn at the conclusion of the infernal cantica exactly when the two wayfarers approach Lucifer.4 Although neither name is mentioned, both are conjured up. Inferno 34 thus begins by invoking a contrastive binomial, Christ and Lucifer. The irony inherent in the Christian hymn's adaptation for the purpose of announcing Lucifer's appearance to the Pilgrim stems, most strikingly, from subverting a text written for a sacred purpose and now employing it for a profane one.5 No longer the sacred poem ( «Vexilla regis prodeunt ») written by a Christian poet, the new and profane poem ( «Vexilla regis prodeunt inferni ») is proclaimed by a pagan, is dedicated, as it were, to Lucifer, and is inscribed within the book of the Commedia. Whereas the Christian Venantius writes a poem to his king, Christ, the pagan Virgil, unable to write a poem for the king whose law he opposed (Inf. 1:125), intones a poem to his de facto king, Lucifer, and he does so by borrowing and perverting a sacred text. In fine, Dante the auctor records this new hymn to Lucifer in his text, as if he were the scribe of Virgil the poet. This opposition between Christ and Lucifer is further emphasized by another textual element, which focuses on nomen. The Inferno, in fact, is the text where the word Dite __ Lucifer __ is inscribed and where the word Christ is never recorded. Thus a written sign characterizes Lucifer in the first cantica, whereas the text's silence typifies Christ. As we shall see, however, the meaning of this verbal presence and absence is ultimately turned around: Lucifer's presence becomes a failure, whereas Christ's absence signifies a victory. As a sign of his textual presence throughout the first cantica, Lucifer, the character whom the Pilgrim contemplates in the nethermost pit of the universe, is designated by means of various words and circumlocutions.

Cost Accounting Answers

CHAPTER 4 JOB COSTING 4-1Cost pool––a grouping of individual indirect cost items. Cost tracing––the assigning of direct costs to the chosen cost object. Cost allocation––the assigning of indirect costs to the chosen cost object. Cost-allocation base––a factor that links in a systematic way an indirect cost or group of indirect costs to cost objects. 4-2In a job-costing system, costs are assigned to a distinct unit, batch, or lot of a product or service.In a process-costing system, the cost of a product or service is obtained by using broad averages to assign costs to masses of identical or similar units. 4-3An advertising campaign for Pepsi is likely to be very specific to that individual client. Job costing enables all the specific aspects of each job to be identified. In contrast, the processing of checking account withdrawals is similar for many customers. Here, process costing can be used to compute the cost of each checking account withdrawal. -4The seven steps in job costing are: (1) identify the job that is the chosen cost object, (2) identify the direct costs of the job, (3) select the cost-allocation bases to use for allocating indirect costs to the job, (4) identify the indirect costs associated with each cost-allocation base, (5) compute the rate per unit of each cost-allocation base used to allocate indirect costs to the job, (6) compute the indirect costs allocated to the job, and (7) compute the total cost of the job by adding all direct and indirect costs assigned to the job. -5Major cost objects that managers focus on in companies using job costing are a product such as a specialized machine, a service such as a repair job, a project such as running the Expo, or a task such as an advertising campaign. 4-6Three major source documents used in job-costing systems are (1) job cost ecord or job cost sheet, a document that records and accumulates all costs assigned to a specific job, starting whe n work begins (2) materials requisition record, a document that contains information about the cost of direct materials used on a specific job and in a specific department; and (3) labor-time sheet, a document that contains information about the amount of labor time used for a specific job in a specific department. -7The main advantages of using computerized source documents for job cost records are the accuracy of the records and the ability to provide managers with instantaneous feedback to help control job costs. 4-8Two reasons for using an annual budget period are a. The numerator reason––the longer the time period, the less the influence of seasonal patterns in overhead costs, and b. The denominator reason––the longer the time period, the less the effect of variations in output levels or quantities of the cost-allocation bases on the allocation of fixed costs. -9Actual costing and normal costing differ in their use of actual or budgeted indirect cost rates: | |Actual |Normal | | |Costing |Costing | |Direct-cost rates |Actual rates |Actual rates | |Indirect-cost rates |Actual rates |Budgeted rates |Each costing method uses the actual quantity of the direct-cost input and the actual quantity of the cost-allocation base. 4-10A house construction firm can use job cost information (a) to determine the profitability of individual jobs, (b) to assist in bidding on future jobs, and (c) to evaluate professionals who are in charge of managing individual jobs. 4-11The statement is false. In a normal costing system, the Manufacturing Overhead Control account will not, in general, equal the amounts in the Manufacturing Overhead Allocated account.The Manufacturing Overhead Control account aggregates the actual overhead costs incurred while Manufacturing Overhead Allocated allocates overhead costs to jobs on the basis of a budgeted rate times the actual quantity of the cost-allocation base. Underallocation or overallocation of indirect (overh ead) costs can arise because of (a) the Numerator reason––the actual overhead costs differ from the budgeted overhead costs, and (b) the Denominator reason––the actual quantity used of the allocation base differs from the budgeted quantity. 4-12Debit entries to Work-in-Process Control represent increases in work in process.Examples of debit entries under normal costing are (a) direct materials used (credit to Materials Control), (b) direct manufacturing labor billed to job (credit to Wages Payable Control), and (c) manufacturing overhead allocated to job (credit to Manufacturing Overhead Allocated). 4-13Alternative ways to make end-of-period adjustments to dispose of underallocated or overallocated overhead are as follows: (i)Proration based on the total amount of indirect costs allocated (before proration) in the ending balances of work in process, finished goods, and cost of goods sold. ii)Proration based on total ending balances (before proration) in w ork in process, finished goods, and cost of goods sold. iii) Year-end write-off to Cost of Goods Sold. iv) The adjusted allocation rate approach that restates all overhead entries using actual indirect cost rates rather than budgeted indirect cost rates. 4-14A company might use budgeted costs rather than actual costs to compute direct labor rates because it may be difficult to trace direct labor costs to jobs as they are completed (for example, because bonuses are only known at the end of the year). -15Modern technology of electronic data interchange (EDI) is helpful to managers because it ensures that a purchase order is transmitted quickly and accurately to suppliers with minimum paperwork and costs. 16. (10 min) Job order costing, process costing. a. Job costingl. Job costing b. Process costingm. Process costing c. Job costingn. Job costing d. Process costingo. Job costing e. Job costingp. Job costing f. Process costingq. Job costing g. Job costingr. Process costing h. Job costin g (but some process costing)s. Job costing i.Process costingt. Process costing j. Process costingu. Job costing k. Job costing 4-17(20 min. )Actual costing, normal costing, accounting for manufacturing overhead. 1. [pic]=[pic] =[pic]= 1. 80 or 180% [pic]=[pic] =[pic]= 1. 9 or 190% 2. Costs of Job 626 under actual and normal costing follow: ActualNormal CostingCosting Direct materials$ 40,000$ 40,000 Direct manufacturing labor costs30,00030,000 Manufacturing overhead costs $30,000 ( 1. 90; $30,000 ( 1. 80 57,000 54,000 Total manufacturing costs of Job 626$127,000$124,000 3. pic]=[pic] ( [pic] =$1,450,000 ( 1. 80 =$2,610,000 [pic]=[pic] – [pic] =$2,755,000 ( $2,610,000 = $145,000 There is no under- or overallocated overhead under actual costing because overhead is allocated under actual costing by multiplying actual manufacturing labor costs and the actual manufacturing overhead rate. This, of course equals the actual manufacturing overhead costs. All actual overhead costs are allocated to products. Hence, there is no under- or overallocated overhead. 4-18(20 -30 min. ) Job costing, normal and actual costing. 1. pic]=[pic] = [pic] =$50 per direct labor-hour [pic]=[pic] = [pic] =$40 per direct labor-hour These rates differ because both the numerator and the denominator in the two calculations are different—one based on budgeted numbers and the other based on actual numbers. |2a. |Laguna |Mission | | |Model |Model | | Normal costing | | | |Direct costs | | |Direct materials |$106,760 |$127,550 | |Direct labor |36,950 |41,320 | | |143,710 |168,870 | |Indirect costs | | | |Assembly support ($50 ( 960; $50 ( 1,050) |48,000 |52,500 | |Total costs |$191,710 |$221,370 | |2b.Actual costing | | | |Direct costs | | | |Direct materials |$106,760 |$127,550 | |Direct labor |36,950 |41,320 | | |143,710 |168,870 | |Indirect costs | | | |Assembly support ($40 ( 960; $40 ( 1,050) |38,400 |42,000 | |Total costs |$182,110 |$210,870 | 3. Normal costing enables Am esbury to report a job cost as soon as the job is completed, assuming that both the direct materials and direct labor costs are known at the time of use. Once the 960 direct labor-hours are known for the Laguna Model (June 2011), Amesbury can compute the $191,710 cost figure using normal costing. Amesbury can use this information to manage the costs of the Laguna Model job as well as to bid on similar jobs later in the year. In contrast, Amesbury has to wait until the December 2011 year-end to compute the $182,110 cost of the Laguna Model using actual costing.Although not required, the following overview diagram summarizes Amesbury Construction’s job-costing system. [pic] 4-19(10 min. )Budgeted manufacturing overhead rate, allocated manufacturing overhead. 1. Budgeted manufacturing overhead rate = [pic] = [pic] = $24 per machine-hour |2. |Manufacturing |= |Actual |( |Budgeted manufacturing | | |overhead | |machine-hours | |overhead rate | | |allocated | | | | | = 170,000 ? $2 4 = $4,080,000 3.Since manufacturing overhead allocated is greater than the actual manufacturing overhead costs, Gammaro overallocated manufacturing overhead: Manufacturing overhead allocated$4,080,000 Actual manufacturing overhead costs 4,050,000 Overallocated manufacturing overhead$ 30,000 4-20(20-30 min. )Job costing, accounting for manufacturing overhead, budgeted rates. 1. An overview of the product costing system is [pic] Budgeted manufacturing overhead divided by allocation base: Machining overhead:[pic] = $36 per machine-hour Assembly overhead:[pic] = 180% of direct manuf. labor costs 2. Machining department, 2,000 hours ( $36$72,000 Assembly department, 180% ( $15,000 27,000 Total manufacturing overhead allocated to Job 494$99,000 3.MachiningAssembly Actual manufacturing overhead$2,100,000$ 3,700,000 Manufacturing overhead allocated, $36 ( 55,000 machine-hours1,980,000— 180% ( $2,200,000 — 3,960,000 Underallocated (Overallocated)$ 120,000$ (260,000) 4-21 (20(2 5 min. ) Job costing, consulting firm. 1. Budgeted indirect-cost rate for client support can be calculated as follows: Budgeted indirect-cost rate = $13,600,000 ? $5,312,500 = 256% of professional labor costs 2. At the budgeted revenues of $21,250,000 Taylor’s operating income of $2,337,500 equals 11% of revenues. Markup rate = $21,250,000 ? $5,312,500 = 400% of direct professional labor costs 3. Budgeted costsDirect costs: Director, $198 ( 4$ 792 Partner, $101 ( 171,717 Associate, $49 ( 422,058 Assistant, $36 ( 153 5,508$10,075 Indirect costs: Consulting support, 256% ( $10,075 25,792 Total costs$35,867 As calculated in requirement 2, the bid price to earn an 11% income-to-revenue margin is 400% of direct professional costs. Therefore, Taylor should bid 4 ( $10,075 = $40,300 for the Red Rooster job. Bid price to earn target operating income-to-revenue margin of 11% can also be calculated as follows: Let R = revenue to earn target income R – 0. 11R = $35,867 0. 89R = $ 35,867 R = $35,867 ? 0. 89 = $40,300 Or Direct costs $10,075 Indirect costs 25,792Operating income (0. 11 ( $40,300) 4,433 Bid price$40,300 4-22(15–20 min. )Time period used to compute indirect cost rates. 1. | |Quarter | | |1 |2 |3 |4 |Annual | |(1) Pools sold |700 |500 |150 |150 |1,500 | |(2) Direct manufacturing labor hours (0. 5 ( |350 |250 |75 |75 |750 | Row 1) | | | | | | |(3) Fixed manufacturing overhead costs |$10,500 |$10,500 |$10,500 |$10,500 |$42,000 | |(4) Budgeted fixed manufacturing overhead |$30 |$42 |$140 |$140 |$56 | |rate per direct manufacturing labor hour | | | | | | |($10,500 ( Row 2) | | | | | | | |Budgeted Costs Based on Quarterly | | |Manufacturing Overhead Rate | | |2nd Quarter |3rd Quarter | |Direct material costs ($7. 0 ( 500 pools; 150 pools) |$ 3,750 |$ 1,125 | |Direct manufacturing labor costs |4,000 |1,200 | |($16 ( 250 hours; 75 hours) | | | |Variable manufacturing overhead costs |3,000 |900 | |($12 ( 250 hours; 75 hours) | | | |Fixed manufac turing overhead costs | 10,500 | 10,500 | |($42 ( 250 hours; $140 ? 5 hours) | | | |Total manufacturing costs |$21,250 |$13,725 | |Divided by pools manufactured each quarter | ? 500 | ? 150 | |Manufacturing cost per pool |$ 42. 50 |$ 91. 50 | 2. | |Budgeted Costs Based on Annual Manufacturing | | |Overhead Rate | | |2nd Quarter |3rd Quarter | |Direct material costs ($7. 0 ( 500 pools; 150 pools) |$ 3,750 |$1,125 | |Direct manufacturing labor costs |4,000 |1,200 | |($16 ( 250 hours; 75 hours) | | | |Variable manufacturing overhead costs |3,000 |900 | |($12 ( 250 hours; 75 hours) | | | |Fixed manufacturing overhead costs | 14,000 | 4,200 | |($56 ( 250 hours; 75 hours) | | | |Total manufacturing costs |$24,750 |$7,425 | |Divided by pools manufactured each quarter | ( 500 | ( 150 | |Manufacturing cost per pool |$ 49. 50 |$49. 50 | 3. | |2nd Quarter |3rd Quarter | |Prices based on quarterly budgeted manufacturing overhead rates calculated in |$55. 25 |$118. 5 | |requirement 1 | | | |($42. 50 ( 130%; $91. 50 ( 130%) | | | |Price based on annual budgeted manufacturing overhead rates calculated in |$64. 35 |$64. 35 | |requirement 2 | | | |($49. 50 ( 130%; $49. 50 ( 130%) | | |Splash should use the budgeted annual manufacturing overhead rate because capacity decisions are based on longer annual periods rather than quarterly periods. Prices should not vary based on quarterly fluctuations in production. Splash could vary prices based on market conditions and demand for its pools. In this case, Splash would charge higher prices in quarter 2 when demand for its pools is high. Pricing based on quarterly budgets would cause Splash to do the opposite—to decrease rather than increase prices! 4-23(10–15 min. ) Accounting for manufacturing overhead. 1. Budgeted manufacturing overhead rate= [pic] = $30 per machine-hour 2. Work-in-Process Control7,350,000 Manufacturing Overhead Allocated7,350,000 (245,000 machine-hours ( $30 per machine-hour = $7,350,000) 3. 7,350,000– $7,300,000 = $50,000 overallocated, an insignificant amount of actual manufacturing overhead costs $50,000 ? $7,300,000 = 0. 68%. Manufacturing Overhead Allocated7,350,000 Manufacturing Department Overhead Control7,300,000 Cost of Goods Sold50,000 4-24(35(45 min. ) Job costing, journal entries. Some instructors may also want to assign Exercise 4-25. It demonstrates the relationships of the general ledger to the underlying subsidiary ledgers and source documents. 1. An overview of the product costing system is: 2. & 3. This answer assumes COGS given of $4,020 does not include the writeoff of overallocated manufacturing overhead. |2. (1) Materials Control |800 | | | |Accounts Payable Control | |800 | | |(2) Work-in-Process Control |710 | | | |Materials Control | |710 | | |(3) Manufacturing Overhead Control |100 | | | |Materials Control | |100 | | |(4) Work-in-Process Control |1,300 | | | |Manufacturing Overhead Control |900 | | | |Wages Payable Control | |2,200 | | |(5) Manufacturing Overhead Control | 400 | | | |Accumulated Depreciation––buildings and | | | | |manufacturing equipment | |400 | | |(6) Manufacturing Overhead Control | 550 | | | |Miscellaneous accounts | |550 | | |(7) Work-in-Process Control |2,080 | | | |Manufacturing Overhead Allocated | |2,080 | | |(1. 60 ( $1,300 = $2,080) | | | | |(8) Finished Goods Control |4,120 | | | |Work-in-Process Control |4,120 | | |(9) Accounts Receivable Control (or Cash) |8,000 | | | |Revenues | |8,000 | | |(10) Cost of Goods Sold |4,020 | | | |Finished Goods Control | |4,020 | | |(11) Manufacturing Overhead Allocated |2,080 | | | |Manufacturing Overhead Control | |1,950 | | |Cost of Goods Sold | |130 | 3. |Materials Control | |Bal. /1/2011 |100 |(2) Work-in-Process Control (Materials used) | | |(1) Accounts Payable Control | |(3) Manufacturing Overhead Control (Materials |710 | |(Purchases) |800 |used) | | | | | |100 | |Bal. 12/31/2011 |90 | | | |Work-in-Process Control | |B al. /1/2011 |60 |(8) Finished Goods Control (Goods completed) | | |(2) Materials Control (Direct | | |4,120 | |materials) |710 | | | |(4) Wages Payable Control (Direct | | | | |manuf. labor) | | | | |(7) Manuf. Overhead Allocated |1,300 | | | | | | | | | |2,080 | | | |Bal. 2/31/2011 |30 | | | |Finished Goods Control | |Bal. 1/1/2011 |500 |(10) Cost of Goods Sold |4,020 | |(8) WIP Control | | | | |(Goods completed) |4,120 | | | |Bal. 12/31/2011 |600 | | | Cost of Goods Sold | |(10) Finished Goods Control (Goods | |(11) Manufacturing Overhead Allocated (Adjust | | |sold) |4,020 |for overallocation) | | | | | |130 | |Bal. 12/31/2011 |3,890 | | | |Manufacturing Overhead Control | | (3) Materials Control (Indirect materials)| |(11) To close |1,950 | |(4) Wages Payable Control (Indirect manuf. |100 | | | |labor) | | | | |(5) Accum. Deprn.Control (Depreciation) |900 | | | |(6) Accounts Payable Control | | | | |(Miscellaneous) |400 | | | | | | | | | |550 | | | |Bal. |0 | | | Manufacturing Overhead Allocated | |(11) To close |2,080 |(7) Work-in-Process Control (Manuf. overhead | | | | |allocated) |2,080 | | | |Bal. | 0 | 4-25(35 minutes) Journal entries, T-accounts, and source documents. 1. i. Direct Materials Control 124,000 Accounts Payable Control124,000 Source Document: Purchase Invoice, Receiving Report Subsidiary Ledger: Direct Materials Record, Accounts Payable ii. Work in Process Control a 122,000 Direct Materials Control122,000Source Document: Material Requisition Records, Job Cost Record Subsidiary Ledger: Direct Materials Record, Work-in-Process Inventory Records by Jobs iii. Work in Process Control80,000 Manufacturing Overhead Control54,500 Wages Payable Control134,500 Source Document: Labor Time Sheets, Job Cost Records Subsidiary Ledger:, Manufacturing Overhead Records, Employee Labor Records, Work-in-Process Inventory Records by Jobs iv. Manufacturing Overhead Control129,500 Salaries Payable Control 20,000 Accounts Payable Control 9,500 Accumulated Depreciation Control 30,000 Rent Payable Control 70,000 Source Document: Depreciation Schedule, Rent Schedule, Maintenance wages due, Invoices for miscellaneous factory overhead items Subsidiary Ledger: Manufacturing Overhead Records v.Work in Process Control200,000 Manufacturing Overhead Allocated200,000 ($80,000 [pic] $2. 50) Source Document: Labor Time Sheets, Job Cost Record Subsidiary Ledger: Work-in-Process Inventory Records by Jobs vi. Finished Goods Control b387,000 Work in Process Control387,000 Source Document: Job Cost Record, Completed Job Cost Record Subsidiary Ledger: Work-in-Process Inventory Records by Jobs, Finished Goods Inventory Records by Jobs vii. Cost of Goods Sold c432,000 Finished Goods Control432,000 Source Document: Sales Invoice, Completed Job Cost Record Subsidiary Ledger: Finished Goods Inventory Records by Jobs viii. Manufacturing Overhead Allocated200,000Manufacturing Overhead Control ($129,500 + $54,500)184,000 Cost of Goods Sold 16,000 Source Document: Prior Journal Entries ix. Administrative Expenses 7,000 Marketing Expenses120,000 Salaries Payable Control30,000 Accounts Payable Control90,000 Accumulated Depreciation, Office Equipment 7,000 Source Document: Depreciation Schedule, Marketing Payroll Request, Invoice for Advertising, Sales Commission Schedule. Subsidiary Ledger: Employee Salary Records, Administration Cost Records, Marketing Cost Records. aMaterials used = [pic] + Purchases – [pic] [pic] b[pic] = [pic] + [pic] – [pic] [pic] cCost of goods sold = [pic] + [pic] – [pic] [pic] 2. T-accounts Direct Materials Control | |Bal. 1/1/2011 |9,000 |(2) Work-in-Process Control (Materials used) | | |(1) Accounts Payable Control (Purchases) | | |122,000 | | |124,000 | | | |Bal. 12/31/2011 |11,000 | | | Work-in-Process Control | |Bal. 1/1/2011 |6,000 |(6) Finished Goods Control (Cost of goods | | |(2) Materials Control | |manufactured) | | |(Direct materials used) |122,000 | |387,000 | |(3) Wages Payable Control (Direct manuf. labor)| | | | |(5) Manuf.Overhead Allocated |80,000 | | | | | | | | | |200,000 | | | |Bal. 12/31/2011 |21,000 | | | |Finished Goods Control | |Bal. 1/1/2011 |69,000 |(7) Cost of Goods Sold |432,000 | |(6) WIP Control | | | | |(Cost of goods manuf. ) |387,000 | | | |Bal. 2/31/2011 |24,000 | | | |Cost of Goods Sold | |(7) Finished Goods Control (Goods sold) | |(8) Manufacturing Overhead Allocated (Adjust | | | |432,000 |for overallocation) | | | | | |16,000 | | | | | | Manufacturing Overhead Control | |(3) Wages Payable Control | |(8) To close |184,000 | |(Indirect manuf. labor) |54,500 | | | |(4) Salaries Payable Control (Maintenance) | | | | |(4) Accounts Payable Control (Miscellaneous) |20,000 | | | |(4) Accum. Deprn.Control (Depreciation) | | | | |(4) Rent Payable Control (Rent) |9,500 | | | | | | | | | |30,000 | | | | | | | | | |70,000 | | | |Bal. |0 | | | |Manufacturing Overhead Allocated | |(8) To close |200,000 |(5) Work-in-Process Contr ol (Manuf. verhead | | | | |allocated) | | | | | |200,000 | | | |Bal. | 0 | 4-26(45 min. )Job costing, journal entries. Some instructors may wish to assign Problem 4-24. It demonstrates the relationships of journal entries, general ledger, subsidiary ledgers, and source documents. 1. An overview of the product-costing system is 2. Amounts in millions. (1) Materials Control |150 | | |Accounts Payable Control | |150 | |(2) Work-in-Process Control |145 | | |Materials Control | |145 | |(3) Manufacturing Department Overhead Control | 10 | | |Materials Control | |10 | |(4) Work-in-Process Control | 90 | | |Wages Payable Control | |90 | |(5) Manufacturing Department Overhead Control | 30 | | |Wages Payable Control | |30 | |(6) Manufacturing Department Overhead Control | 19 | | |Accumulated Depreciation | |19 | |(7) Manufacturing Department Overhead Control | 9 | | |Various liabilities | |9 | |(8) Work-in-Process Control | 63 | | |Manufacturing Overhead Allocated | |63 | |(9) Finished Goods Control |294 | | |Work-in-Process Control | |294 | |(10a)Cost of Goods Sold |292 | | |Finished Goods Control | |292 | |(10b) Accounts Receivable Control (or Cash ) |400 | | |Revenues | |400 | The posting of entries to T-accounts is as follows: |Materials Control | |Work-in-Process Control | |Bal 12 |(2) 145 | |Bal. |(9) 294 | | | | |(2) 145 | | | | | |(4) 90 | | | | | |(8) 63 | | |(1) 150 |(3) 10 | | | | |Bal. 7 | | | | | | | | | | | | | | |Bal. | | |Finished Goods Control | |Cost of Goods Sold | |Bal. 6 |(10a) 292 | |(10a) 292 | | |(9) 294 | | |(11) 5 | | |Bal. 8 | | | | | |Manufacturing Department | | |Overhead Control | |Manufacturing Overhead Allocated | |(3) 10 |(11) 68 | |(11) 63 |(8) 63 | |(5) 30 | | | | | |(6) 19 | | | | | |(7) 9 | | | | | Accounts Payable Control | |Wages Payable Control | | |(1) 150 | | |(4) 90 | | | | | |(5) 30 | |Accumulated Depreciation | |Various Liabilities | | |(6) 19 | | |(7) 9 | Accounts Receivable Control | |Revenues | |(10b) 400 | | | | (10b) 400 | | | | | | | The ending balance of Work-in-Process Control is $6. 3. (11) Manufacturing Overhead Allocated63 Cost of Goods Sold5 Manufacturing Department Overhead Control68 Entry posted to T-accounts in Requirement 2. 4-27(15 min. )Job costing, unit cost, ending work in progress. 1. Direct manufacturing labor rate per hour |$26 |   | |Manufacturing overhead cost allocated |$20 |   | |per manufacturing labor-hour | | | |   |Job M1 |Job M2 | |Direct manufacturing labor costs |$273,000 |$208,000 | |Direct manufacturing labor hours ($273,000[pic]$26; | 10,500 | 8,000 | |$208,000[pic]$26) | | | |Manufacturing overhead cost allocated (10,500 [pic] $20; |$210,000 |$160,000 | |8,000 [pic] $20) | | | | | | | |Job Costs May 2011 |Job M1 |Job M2 | |Direct materials |$ 78,000 |$ 51,000 | |Direct manufacturing labor | 273,000 | 208,000 | |Manufacturing overhead allocated | 210,000 | 160,000 | |Total costs |$561,000 |$419,000 | 2. |Number of pipes produced for Job M1 |1,100 |   | |Cost per pipe ($561,000 [pic]1,100) |$510 |   | 3. Finished Goods Control561,000 Work-in-Process Control 561,000 4.Rafael Company began May 2011 with no work-in-process inventory. During May, it started and finished M1. It also started M2, which is still in work-in-process inventory at the end of May. M2’s manufacturing costs up to this point, $419,000, remain as a debit balance in the Work-in-Process Inventory account at the end of May 2011. 4-28(20(30 min. ) Job costing; actual, normal, and variation from normal costing. 1. Actual direct cost rate for professional labor=$59 per professional labor-hour Actual indirect cost rate = [pic]=$42 per professional labor-hour [pic] = [pic]=$55 per professional labor-hour Budgeted indirect cost rate = [pic]=$43 per professional labor-hour |(a) |(b) |(c) | | |Actual |Normal |Variation of | | |Costing |Costing |Normal Costing | |Direct-Cost Rate |$59 |$59 |$55 | | |(Actual rate) |(Actual rate) |(Budgeted rate) | |Indirect-Cost Ra te |$42 |$43 |$43 | | |(Actual rate) |(Budgeted rate) |(Budgeted rate) | |2. |(a) |(b) |(c) | | Actual |Normal |Variation of | | |Costing |Costing |Normal Costing | |Direct Costs |$59 ( 160 = $ 9,440 |$59 ( 160 = $ 9,440 |$55 ( 160 = $ 8,800 | |Indirect Costs |$42 ( 160 = 6,720 |$43 ( 160 = 6,880 |$43 ( 160 = 6,880 | |Total Job Costs |$16,160 |$16,320 |$15,680 | All three costing systems use the actual professional labor time of 160 hours. The budgeted 150 hours for the Pierre Enterprises audit job is not used in job costing. However, Chico may have used the 150 hour number in bidding for the audit. The actual costing figure of $16,160 is less than the normal costing figure of $16,320 because the actual indirect-cost rate ($42) is less than the budgeted indirect-cost rate ($43).The normal costing figure of $16,320 is more than the variation of normal costing (based on budgeted rates for direct costs) figure of $15,680, because the actual direct-cost rate ($59) is more than the budge ted direct-cost rate ($55). Although not required, the following overview diagram summarizes Chico’s job-costing system. [pic] 4-29(20(30 min. ) Job costing; actual, normal, and variation from normal costing. 1. Actual direct cost rate for architectural labor=$92 per architectural labor-hour Actual indirect cost rate = [pic]=$50 per architectural labor-hour [pic] = [pic]=$90 per architectural labor-hour Budgeted indirect cost rate = [pic]=$54 per architectural labor-hour |(a) |(b) |(c) | | |Actual |Normal |Variation of | | |Costing |Costing |Normal Costing | |Direct-Cost Rate |$92 |$92 |$90 | | |(Actual rate) |(Actual rate) |(Budgeted rate) | |Indirect-Cost Rate |$50 |$54 |$54 | | |(Actual rate) |(Budgeted rate) |(Budgeted rate) | |2. (a) |(b) |(c) | | |Actual |Normal |Variation of | | |Costing |Costing |Normal Costing | |Direct Costs |$92 ( 250 = $23,000 |$92 ( 250 = $23,000 |$90 ( 250 = $22,500 | |Indirect Costs |$50 ( 250 = 12,500 |$54 ( 250 = 13,500 |$54 ( 250 = 13,500 | |Total Job Costs |$35,500 |$36,500 |$36,000 | All three costing systems use the actual architectural labor time of 250 hours. The budgeted 275 hours for the Champ Tower job is not used in job costing. However, Braden Brothers may have used the budgeted number of hours in bidding for the job. 30. (30 min. ) Proration of overhead. [pic] = [pic] [pic] 2. Overhead allocated = 50% [pic] Actual direct manufacturing labor cost = 50% [pic] $228,000 = $114,000 |Underallocated |= |Actual |– |Allocated plant | | | |manufacturing | |manufacturing | |overhead costs | | | |overhead | |overhead costs | | | | = $117,000 – $114,000 = $3,000 Underallocated manufacturing overhead = $3,000 3a. All underallocated manufacturing overhead is written off to cost of goods sold. Both work in process (WIP) and finished goods inventory remain unchanged. |Account |Dec. 31, 2011 |Proration of $3,000 |Dec. 31, 2011 | | |Balance |Underallocated |Balance | | |(Before Proration) |Manuf.Overhead |(After Proration) | | |(1) |(2) |(3) = (1) + (2) | |WIP |$ 50,700 |$ 0 |$ 50,700 | |Finished Goods |245,050 |0 |245,050 | |Cost of Goods Sold | 549,250 | 3,000 | 552,250 | |Total |$845,000 |$3,000 |$848,000 | 3b. Underallocated manufacturing overhead prorated based on ending balances: |Account |Dec. 31, 2011 Account |Account |Proration of $3,000 |Dec. 1, 2011 Account | | |Balance |Balance as a |Underallocated |Balance | | |(Before Proration) |Percent of Total |Manuf. Overhead |(After Proration) | | |(1) |(2) = (1) ? $845,000 |(3) = (2)[pic]$3,000 |(4) = (1) + (3) | |WIP |$ 50,700 |0. 06 |0. 06 [pic] $3,000 = $ 180 |$ 50,880 | |Finished Goods |245,050 |0. 29 |0. 29 [pic] $3,000 = 870 |245,920 | |Cost of Goods Sold | 549,250 |0. 65 |0. 5 [pic] $3,000 = 1,950 | 551,200 | |Total |$845,000 |1. 00 |$3,000 |$848,000 | 3c. Underallocated manufacturing overhead prorated based on 2011 overhead in ending balances: |Account |Dec. 31, 2011 |Allocated Manuf. |Allocated Manuf. Overhead |Proration of $3,0 00 |Dec. 31, 2011 | | |Account |Overhead in |in |Underallocated |Account | | |Balance |Dec. 31, 2011 Balance |Dec. 31, 2011 |Manuf.Overhead |Balance | | |(Before Proration) |(Before Proration) |Balance as a |(4) = (3)[pic]$3,000 |(After Proration) | | |(1) |(2) |Percent of Total | |(5) = (1) + (4) | | | | |(3) = (2) ? $114,000 | | | |WIP |$ 50,700 |$ 10,260a |0. 09 |0. 09 [pic] $3,000 = $ 270 |$ 50,970 | |Finished Goods |245,050 |29,640b |0. 26 |0. 6 [pic] $3,000 = 780 |245,830 | |Cost of Goods Sold | 549,250 | 74,100c |0. 65 |0. 65 [pic] $3,000 = 1,950 | 551,200 | |Total | $845,000 |$114,000 |1. 00 | $3,000 | $848,000 | a,b,c Overhead allocated = Direct manuf. labor cost[pic]50% = $20,520; $59,280; $148,200[pic]50% 4. Writing off all of the underallocated manufacturing overhead to Cost of Goods Sold (CGS) is usually warranted when CGS is large relative to Work-in-Process and Finished Goods Inventory and the underallocated manufacturing overhead is immaterial. Both these conditions apply in this case.ROW should write off the $3,000 underallocated manufacturing overhead to Cost of Goods Sold Account. 4-31 (20(30 min)Job costing, accounting for manufacturing overhead, budgeted rates. 1. An overview of the job-costing system is: [pic] 2. Budgeted manufacturing overhead divided by allocation base: a. Machining Department: [pic]= $52 per machine-hour b. Finishing Department: [pic]= 194% of direct manufacturing labor costs 3. Machining Department overhead, $52 ( 130 machine-hours$6,760 Finishing Department overhead, 194% of $1,100 2,134 Total manufacturing overhead allocated$8,894 4. Total costs of Job 431: Direct costs: Direct materials––Machining Department$15,500 ––Finishing Department5,000Direct manufacturing labor—Machining Department400 —Finishing Department 1,100$22,000 Indirect costs: Machining Department overhead, $52 ( 130$ 6,760 Finishing Department overhead, 194% of $1,100 2,134 8,894 Total costs$30,894 The per-u nit product cost of Job 431 is $30,894 ? 400 units = $77. 235 per unit The point of this part is (a) to get the definitions straight and (b) to underscore that overhead is allocated by multiplying the actual amount of the allocation base by the budgeted rate. 5. MachiningFinishing Manufacturing overhead incurred (actual)$11,070,000$8,236,000 Manufacturing overhead allocated 210,000 hours ( $5210,920,000 94% of $4,400,000 8,536,000 Underallocated manufacturing overhead$ 150,000 Overallocated manufacturing overhead$ 300,000 Total overallocated overhead = $300,000 – $150,000 = $150,000 6. A homogeneous cost pool is one where all costs have the same or a similar cause-and-effect or benefits-received relationship with the cost-allocation base. Fasano likely assumes that all its manufacturing overhead cost items are not homogeneous. Specifically, those in the Machining Department have a cause-and-effect relationship with machine-hours, while those in the Finishing Department have a cause-and-effect relationship with direct manufacturing labor costs.Fasano believes that the benefits of using two cost pools (more accurate product costs and better ability to manage costs) exceeds the costs of implementing a more complex system. 4-32(15(20 min. ) Service industry, job costing, law firm. 1. [pic] 2. [pic]= [pic] =[pic] =$65 per professional labor-hour Note that the budgeted professional labor-hour direct-cost rate can also be calculated by dividing total budgeted professional labor costs of $2,600,000 ($104,000 per professional ( 25 professionals) by total budgeted professional labor-hours of 40,000 (1,600 hours per professional ( 25 professionals), $2,600,000 ( 40,000 = $65 per professional labor-hour. [pic][pic]= [pic] [pic] =[pic] =$55 per professional labor-hour |4. |Richardson |Punch | |Direct costs: | | | |Professional labor, $65 ( 100; $65 ( 150 |$ 6,500 |$ 9,750 | |Indirect costs: | | | |Legal support, $55 ( 100; $55 ( 150 |5,500 |8,250 | | |$12,000 |$18, 000 | 4-33(25–30 min. Service industry, job costing, two direct- and indirect-cost categories, law firm (continuation of 4-32). Although not required, the following overview diagram is helpful to understand Keating’s job-costing system. [pic] |1. |Professional |Professional | | |Partner Labor |Associate Labor | |Budgeted compensation per professional |$ 200,000 |$80,000 | |Divided by budgeted hours of billable | | | |time per professional |? 1,600 |? ,600 | |Budgeted direct-cost rate |$125 per hour* |$50 per hour†  | *Can also be calculated as [pic]= [pic]= [pic]=$125 † Can also be calculated as [pic]= [pic]= [pic]=$ 50 |2. |General |Secretarial | | |Support |Support | |Budgeted total costs |$1,800,000 |$400,000 | |Divided by budgeted quantity of allocation base |? 40,000 hours |? ,000 hours | |Budgeted indirect cost rate |$45 per hour |$50 per hour | |3. |Richardson |Punch | |Direct costs: | | | |Professional partners, | | | |$125 ( 60 hr. ; $125 ( 30 hr. |$7,500 |$3,750 | |Professional associates, | | | |$50 ( 40 hr. ; $50 ( 120 hr. 2,000 |6,000 | |Direct costs |$ 9,500 |$ 9,750 | |Indirect costs: | | | |General support, | | | |$45 ( 100 hr. ; $45 ( 150 hr. |4,500 |6,750 | |Secretarial support, | | | |$50 ( 60 hr. ; $50 ( 30 hr. 3,000 |1,500 | |Indirect costs |7,500 |8,250 | |Total costs |$17,000 |$18,000 | |4. |Richardson |Punch | |Single direct – Single indirect | | | |(from Problem 4-32) |$12,000 |$18,000 |Multiple direct – Multiple indirect | | | |(from requirement 3 of Problem 4-33) |17,000 |18,000 | |Difference |$ 5,000 |$ 0 | | |undercosted |no change | The Richardson and Punch jobs differ in their use of resources. The Richardson job has a mix of 60% partners and 40% associates, while Punch has a mix of 20% partners and 80% associates. Thus, the Richardson job is a relatively high user of the more costly partner-related resources (both direct partner costs and indirect partner secretarial support). The Pun ch job, on the other hand, has a mix of partner and associate-related hours (1  :  4) that exactly equals the mix of partner and associate hours for the firm as a whole. The refined-costing system in Problem 4-33 increases the reported cost in Problem 4-32 for the Richardson job by 41. % (from $12,000 to $17,000) while it happens to correctly cost the Punch job. 4-34(20(25 min. ) Proration of overhead. [pic] 2. [pic]=[pic] – [pic] =$4,900,000 – $4,500,000* =$400,000 *$60 ( 75,000 actual machine-hours = $4,500,000 a. Write-off to Cost of Goods Sold | |Dec. 31, 2011 |Write-off |Dec. 31, 2011 | | |Account |of $400,000 |Account | | |Balance |Underallocated |Balance | |Account |(Before Proration) |Manufacturing (After Proration) | |(1) |(2) |Overhead |(4) = (2) + (3) | | | |(3) | | | | | | | |Work in Process |$ 750,000 |$ 0 |$ 750,000 | |Finished Goods |1,250,000 |0 |1,250,000 | |Cost of Goods Sold |8,000,000 |400,000 |8,400,000