Cost Accounting (Coursework Sample)

Cost Accounting by [Student’s Name] Class/Course/Code Professor’s Name University/School City, State Date 1 State the traced labor cost directly under traditional costing, explain from the established financial reporting, and Traci, ng attract Cost. And Jazz Music Shop, Inc. Manufacturing statement December 31,2015 Direct materials: $ Beginning raw material inventory: 100 3886200307340Purchases 100 Inventory available for use: 200 4029075161925Less: raw material ending inventory 150 Total direct materials used: 50 Direct labor: 250 Factory overheads Depreciation 25 Amortization 15 Repairs 40 4191000145415Utilities 74 5200650173990Total factory overheads: 154 Total manufacturing cost: $454 5238750298450Plus: begging working in progress inventory 100 Total Cost of working inventory 554 5229225280035Less. Ending working inventory: 150 53244752806705257800223520Total Cost of Goods Manufactured: 404 There are ten working hours in the company. Traced labor costs are directly under traditional costs; these traced labor costs cannot be avoided since they are major in the production of the item; they are direct costs or expenses that can be traced directly to the final item or product being produced by the company. Actual labor cost is calculated by calculating first the employee cost of labor per hour, that is, then adding the gross wages to the total costs, which are related to expenses (payroll taxes, annual overhead, and other deductions that are related), then dividing by the number of hours that the employee has been working, then multiplying by twelve to know how much employee works per year (Matsoso, Nyathi, and Nakpodia, 2021). This will help to know how useful the employee is and how much the employee costs per hour and month in the company. The labor cost can be categorized into two main categories: direct labor, which is involved mainly in production purposes or can also be termed production costs, and indirect costs, which are not directly involved but contribute silently to the production process. Examples of direct labor costs include the wages and salaries that are paid to the workers, which can be directly associated with the products and services which can be directly associated with the products and services that are being produced. Salaries include costs per hour (the regularly worked hours), overtime working hours, payroll taxes, medical care, and employee insurance, among others. It is essential to trace the costs since it benefits the firm in making decisions and making the right choices in costing; their past performance or the historical costs help the firm make decisions about its future performance (Hall, 2019). Therefore, tracing labor costs is very significant for company forecasting purposes regarding cost allocation, future expansion, and rewarding the hardworking employees who work for more hours or extra time. Historical costing also assists in comparison to avoid making past mistakes in costing. But we cannot trace 100 percent of this cost; we will embrace more of an art in tracing than doing it scientifically; this is done by determining cost tracing and deploying better skills to check on the same in order to be able to know which costs are involved. The labor cost per cover is calculated by dividing the total by labor hours. 809625351790Labor cover = cover totals Cover per hour Labor cover = 250/10hrs =$25/hour. They are for various labor costs, including fixed and variable, direct and indirect, and product and period labor costs. In accounting, direct labor costs are calculated since these are the costs incurred in the production of services and goods. The total direct labor costs must be greater than the wages paid. 2 The cost objective(s) are the direct, indirect, fixed, and overhead costs. Objectives of Direct Cost Is the cost identified for a particular project specifically? These costs can be tied directly to the production facility. Examples of direct costs include direct materials, direct labor, manufacturing supplies, wages and salaries, and fuel or power consumption. Due to their traceability to the final product, they are not allocated to the product, department, or other costs. Items that are not direct costs are allocated based on cost drivers. Direct costs are significant in producing goods and services and can be traced to the final product, while indirect costs cannot (Hall, 2019). Objectives of fixed costs They are not directly related to production, but they are crucial in the production line. They change from time to time. They include rental leases, wages and salaries, depreciation, and interest expenses, among others. planIt is important to enable management to plan and make the company budget. There is no need to budget such costs because they increase suddenly. Total Cost = direct Cost + indirect Cost Objectives of the indirect costs: these costs assist Objectives of overhead costs These costs are also not directly related to production. It is important to budget for such costs since they assist in the day-to-day running of the business and determine how much the company may adjust in making the products to make profits on both goods and services. 3 Based on the appropriate model and the costing concept learned in class, demonstrate with relevant calculations how you allocated costs. The assumption made must be clearly explained. Total Cost = direct Cost + indirect Cost = $250 + 50 =$ 300 Total Cost = fixed cost + variable Cost = 100 +100+ 50+50 =$ 300 Total Cost = Cost per unit produced X Total quantity produced = $ 300/1 = $ 300 Fixed Cost are throughout the project, which shows it cannot be avoided; it are essential in the production process. Based on the appropriate model, demonstrate the relevant calculations. Total Cost = Cost per unit produced X Total quantity produced = $ 300/1 = $ 300 4 Establish over- or under-applied overheads. Why did the calculations establish over- or under-applied overheads? What can you advise management on how to rectify this situation in the future cost management process? Overhead costs are those in the Jazz Music income statements except direct labor, direct material, and direct expenses. For the jazz company, they include depreciation, amortization, repairs, and utilities. Therefore; Overheads= manufacturing overhead per unit x number of units =`depreciation + amortization + repair + utilities = 25 + 15 +40 + 74 = $ 154 There are three overhead costs, which include fixed overheads, which are the costs that are similar or the same every month; these fixed overhead costs do not fluctuate with the activities of the business; in the example above, we have depreciation amounting to $25. Second, we have variable overhead costs, which follow the business activities; if the AC business activities expand, the overhead cost increases. They vary. If the business activities decrease, the overhead costs decrease. Our jazz music company includes repair costs of $40, which are the most affected by business activities. Third, we have the semi-variable overheads, whether the business increases or decreases in operations. However, the cost will change slowly; these costs in Jazz Music Inc. include the utilities, which are $74, and an overhead cost of one company may be a direct cost for the other company (Obaid, 2017). Knowing the business overhead cost may be of great value to the development and future estimation of plans for the company; it will help set prices, eventually making the company realize profits. These overheads can be used to determine the company's net proceeds (Suzan, 2020). The Jazz music company can also look at its overhead and reduce the overhead expenses; therefore, 5 Will the question in question 5 differ if you determine cost allocation based on normal costing? What if you adopted normal pricing? Justify your answer based on the literature and illustrations in your work. If thi...