The cost cost system by command Management accounting - Contextualization: Solid inc. You are the vice president of a house construction company called Solid Inc. This is located in Sudbury. It is one of the local companies recognized for the quality of their services. You want to develop your business by buying a Timmins construction company. Solid inc. uses a cost cost-benefit system by order and uses the wage costs of workers directly linked to production as a basis. The company estimates that, in two years, the overhead costs will amount to $ 15,000,000 and that the workers' payroll directly related to production will amount to $ 12,000,000. The accountant also provides you with the following information: Solid inc. December 31, 2018 Actual costs incurred in 2018 Direct equipment used $ 8,000,000 Workers' wages directly linked to production $ 12,000,000 General expenses incurred in 2018 Indirect production wages $ 2,000,000 Commercial insurance $ 500,000 Rent 7 $ 000,000 Maintenance costs $ 1,500,000 Depreciation $ 1,000,000 You present the information from the accountant to the president of the company who is thinking about expanding the business of the company. He is then a little overwhelmed and asks you for clarifications. Your task Answer the president's questions. Make sure you present your calculations and be as detailed as possible. 

1. Why did we adopt a cost-by-order system? 

2. How can we recover the general manufacturing costs? Do the calculations to find the predetermined overhead rate. 

3. The accountant told me that there are accounting entries to be made for indirect production costs. I am not sure if this is an over-attribution or an under-attribution. Can you clarify this for me? Demonstrate your reasoning and do the accounting writing. 

Note: For the last question, you can submit a photo of your completed work or a digitized version.

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1 A costbyorder system is used to track the costs of each production order This system assigns produ... View the full answer