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061112 Project: Cost Accounting Cost Accounting : Project: Cost Accounting Lesson 4 Overview The purpose of this project is to give you practical experience with financial computations and decision making in the cost accounting field. In this project you’ll calculate and analyze costs in the role of a cost accountant. Your assignment is to analyze the financial situations described and make the appropriate reports and computations. Show all calculations or calculator inputs for credit (Round to two digits after the decimal point when necessary). 4.1 Apply your accounting skills on cost accounting computation and analysis Graded Project: Cost Accounting READING ASSIGNMENT Your project must be submitted as a Word document (.docx, .doc). Be sure that each of your files contains the following information: Your name Your student ID number The exam number Your email address To submit your graded project, follow these steps: Cost Accounting (v2) : Lesson 4 : Page 1© 2019 Penn Foster Inc. Log in to your student portal. Click on Take Exam next to the lesson you’re working on. Find the exam number for your project at the top of the Project Upload page. Follow the instructions provided to complete your exam. Be sure to keep a backup copy of any files you submit to the school! Part 1: Job Costing At the beginning of the month, Mark’s Masonry had two jobs in process that had the following costs assigned from previous months: Job Number Direct Labor Applied Overhead JB111 $24,000 ? JB115 $15,000 ? During the month, Jobs JB111 and JB115 were completed but not billed to customers. The completion costs for JB111 required $26,000 in direct labor. For JB115, $75,000 in direct labor was used. During the month, one new job, JB120, was started but not finished. Total direct labor costs for all jobs amounted to $155,000 for the month. Overhead in this company refers to the cost of work that is not directly traced to particular jobs, including copying, printing, and travel costs to meet with clients. Overhead is applied at a rate of 70 percent of direct labor costs for this and previous periods. Actual overhead for the month was $95,000. Answer the following questions: Cost Accounting (v2) : Lesson 4 : Page 2© 2019 Penn Foster Inc. a. What are the costs of Jobs JB111 and JB115 at (1) the beginning of the month and (2) when completed? b. What is the cost of Job JB120 at the end of the month? c. How much was under- or over-applied service overhead for the month? Part 2: Process Costing Future Robotics provides the following information for one of its department’s operations for June (no new material is added in Department A): WIP inventory -- Department A Beginning inventory (20,000 units, 55% complete with respect to Department A costs) Transferred-in costs (from Department Z) $110,000 Department A conversion costs 54,000 Current work (30,000 units started) Prior department costs 275,000 Department A costs 210,000 The ending inventory has 4,000 units, which are 30 percent complete with respect to Department A costs and 100 percent complete for prior department costs. Complete the following: a. Prepare a production cost report using FIFO. Cost Accounting (v2) : Lesson 4 : Page 3© 2019 Penn Foster Inc. Part 3: Activity-Based Costing Banquet Services uses activity-based costing to compute the costs of their catered parties. Each party is limited to 40 guests and requires five people to serve and clean up. Two types of parties, an afternoon picnic and an evening formal dinner, are offered. The breakdown of the costs follows: Activities (and cost drivers) Afternoon Picnic Formal Dinner Advertising (parties) $175 per party $100 per party Planning (parties) $50 per party $75 per party Renting equipment $75 per party plus $75 per party plus (parties, guests) $20 per guest $20 per guest Obtaining insurance (parties) $200 per party $400 per party Serving (parties, servers) $60 per server per party $90 per server per party Preparing food (guests) $20 per guest $30 per guest Per party costs do not vary with the number of guests. Complete the following: a. Compute the cost of a 40-guest afternoon picnic. b. Compute the cost of a 40-guest evening formal dinner. c. How much should Banquet Services charge per guest at a minimum for both Afternoon Picnics and Formal Dinners to cover their costs? Cost Accounting (v2) : Lesson 4 : Page 4© 2019 Penn Foster Inc. Grading Criteria The grading of this project is weighted as shown. The sum of the scores for all three parts is the total score for the project. Part 1: Job Costing (worth 30 points) Part a 10 points Part b 10 points Part c 10 points Part 2: Process Costing (worth 40 points) Production Cost Report—FIFO Formatting 10 points Content 30 points Part 3: Activity-Based Costing (worth 30 points Part a 10 points Part b 10 points Part c 10 points TOTAL 100 points Cost Accounting (v2) : Lesson 4 : Page 5© 2019 Penn Foster Inc. 06111200