The difference between job costing and process costing
Dr. Thanasak Ruankaew
Part 1 Contribution Margin/Breakeven
PV of Annuity Table
| Purchase of new equipment |
|
n | 1% | 2% | 3% | 4% | 5% | 6% | 8% | 10% | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Expected annual increase in sales | $ | 1 | 0.9804 | 0.9709 | 0.9615 | 0.9524 | 0.9434 | 0.9259 | 0.9091 | |||
| Time frame | 7 years | 2 |
|
1.9416 | 1.9135 | 1.8861 | 1.8594 | 1.8334 | 1.7833 | 1.7355 |
|
|
| Acceptable rate needed | 9% | 3 | 2.941 | 2.8839 | 2.8286 | 2.7751 | 2.7233 | 2.673 | 2.5771 | 2.4869 | ||
| Calculate the Internal Rate of Return: | 5.206 | |||||||||||
| 4 | 3.902 | 3.8077 | 3.7171 | 3.6299 | 3.546 | 3.4651 | 3.3121 | 3.1699 | ||||
| 5 | 4.7135 | 4.5797 | 4.4518 | 4.3295 | 4.2124 | 3.9927 | 3.7908 | |||||
| PV of annuity factor | 6 |
|
5.6014 | 5.4172 | 5.2421 | 5.0757 | 4.9173 | 4.6229 | 4.3553 |
|
||
| Internal rate of return | 8% | 7 | 6.472 | 6.2303 | 6.0021 | 5.7864 | 5.5824 | 5.2064 | 4.8684 | |||
| Accept or reject | 8 | 7.3255 | 7.0197 | 6.7327 | 6.4632 | 6.2098 | 5.7466 | 5.3349 |
|
|||
| 9 | 8.566 | 8.1622 | 7.7861 | 7.4353 | 7.1078 | 6.8017 | 6.2469 | 5.759 |
|
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| 10 | 8.9826 | 8.5302 | 8.1109 | 7.7217 | 7.3601 | 6.7101 | 6.1446 | |||||
| 11 10.3676 | 9.7869 | 9.2526 | 8.7605 | 8.3064 | 7.8869 | 7.139 | 6.4951 | |||||
| 9.954 | 9.3851 | 8.8633 | 8.3838 | 7.5361 | 6.8137 |
|
||||||
|
10.635 | 9.9857 | 9.3936 | 8.8527 | 7.9038 | 7.1034 | ||||||
| 9.8986 | 9.295 | 8.2442 | 7.3667 | |||||||||
|
9.7123 | 8.5595 | 7.6061 |
|
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Month following the sale 20%
Estimated cash receipts
Part 6 Material and Labor Variance Cookie Business
| Actual Cost of Direct Materials | $ | |
|---|---|---|
| Standard Cost of Direct Materials | $ | |
| Actual Materials Used | $ | |
| Standard Materials Used | ||
| Actual Direct Labor Rate |
|
|
| Standard Labor Rate | $ |
|
| Actual Hours Worked | ||
| Standard Hours Worked |
Calculate Materials Variances:
| Labor Rate Variance | $ | (23) | |
|---|---|---|---|
| Labor Effi ciency Variance | $ | (75) |
Conclusions and Recommendations
Jiambalvo, J. (2019). Managerial accounting (6th ed.). Hoboken, NJ: Wiley.
Delaney, P, Whittington, O. (2011). Wiley CPA Exam Review: Business Environment and Concepts (8th ed.). Hoboken, NJ: Wiley
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