Question: Using job order costing in a service company
Assume that Roth’s accountants are expected to work a total of 8,000 direct labor hours in 2018. Roth’s estimated total indirect costs are $96,000 and the allocation base used is direct labor hours.
2. What indirect costs will be allocated to Client 507 if Jack Smith, an accountant at Roth Accounting, works 15 hours to prepare the financial statements?
The allocated indirect cost to client 507 is $180.
Costing system is used by the companies to calculate the the costing of the goods manufactured by the company. It can be done either by process costing or by job order costing system.
Question: Analyze the following T-accounts, and describe each lettered transaction. Note that some transactions may be compound entries.
Raw material inventory
Work in process inventory
Finished goods inventory
Cost of goods sold
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