Question

Reider Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Reider identified three overhead activities and related drivers. Budgeted information for the year is as follows: Reider worked on four jobs in July. Data are as follows: By July 31, Jobs 13-

43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process. 2. Prepare job-order cost sheets for each job showing all costs through July 31 . When required, round your answers to the nearest dollar. If an amount is zero, enter " 0 ". Reider Comnanv 3. Calculate the balance in Work in Process on July 31. 4. Calculate the cost of goods sold for July. $ 5. What if Job 13-46 required no engineering change orders? What is the difference in the new cost of Job 3 46 ? $ How would the cost of the other jobs be affected?.

Answer 1

To calculate job costs for Raider Company, total costs, average variable costs, average total costs, and marginal costs must be computed by considering both fixed and variable costs. Creating a cost table is crucial in determining these costs. Reducing engineering change orders for a job lowers its cost but doesn't necessarily impact other jobs' costs.

Step-by-step explanation:

Raider Company, a costing firm, uses activity-based costing to apply overhead to jobs. To calculate costs for each job, one must begin by determining the cost structure for the firm. The costs include total fixed costs and variable costs.

Total costs are calculated by adding fixed costs to variable costs. Average variable cost is computed by dividing the total variable costs by the number of units produced. Average total cost is the sum of the average variable cost and average fixed cost (total fixed cost divided by the number of units produced). Marginal cost represents the additional cost of producing one more unit and can typically be found by looking at the increase in total cost when one additional unit is produced.

For a costing firm like Raider, creating a table that shows output, total cost, marginal cost, average cost, variable cost, and average variable cost helps to illustrate the cost breakdown for each job. This is fundamental in job-order costing systems, especially when using activity-based costing methods.

If Job 13-46 required no engineering change orders, the cost of that job would be reduced by the amount that was budgeted for engineering change orders. This change would not directly affect the cost of other jobs unless the overhead allocation method spread savings from reduced engineering costs across all jobs.