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The difference between job costing and process costing

Dr. Thanasak Ruankaew

Part 1 Contribution Margin/Breakeven

PV of Annuity Table

Purchase of new equipment

$ 250,000.00

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

1.9704

1.9416 1.9135 1.8861 1.8594 1.8334 1.7833 1.7355

1.6906

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

5.7955

5.6014 5.4172 5.2421 5.0757 4.9173 4.6229 4.3553

4.1114

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

4.9676

9 8.566 8.1622 7.7861 7.4353 7.1078 6.8017 6.2469 5.759

5.3283

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

6.1944

13 12.1337 11.3484

10.635 9.9857 9.3936 8.8527 7.9038 7.1034
9.8986 9.295 8.2442 7.3667

11.938 11.1184 10.3797

9.7123 8.5595 7.6061

6.8109

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

15.50

Standard Labor Rate $

15.00

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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