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Exam 15: Job Order Costing and Analysis

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Question 101

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How do manufacturing firms adjust the overapplied or underapplied factory overhead account at the end of an accounting period?

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The amount of under-...

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Question 102

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Andrew Industries purchased $165,000 of raw materials on account during the month of March.The beginning Raw Materials Inventory balance was $22,000,and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. -What journal entry should Andrew use to account for direct materials used in March:

A) Debit Raw Materials Inventory $141,000; credit Accounts Payable $141,000.
B) Debit Work in Process Inventory $141,000; credit Raw Materials Inventory $141,000.
C) Debit Work in Process Inventory $141,000; credit Accounts Payable $141,000.
D) Debit Finished Goods Inventory $22,000; credit Raw Materials Inventory $22,000.
E) Debit Raw Materials Inventory $153,000; credit Work in Process Inventory $153,000.

F) A) and B)
G) A) and E)

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Question 103

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A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used. 106,400.

The job cost sheet for Job number 83-421 includes the following information: DIRECT MATERIALS: 7/12 Requisition R88-566: 20 units @ $ 3.50 per unit 7/13 Requisition R88-576: 18 units @ $ 5.00 per unit 7/13 Requisition R88-578: 4 units @ $25.00 per unit 7/14 Requisition R88-591: 40 units @ $ 1.25 per unit DIRECT LABOR: 7/12 Employee 19: 8 hours @ $ 9.00 per hour 7/13 Employee 19: 6 hours @ $ 9.00 per hour 7/13 Employee 37: 6 hours @ $ 8.00 per hour 7/14 Employee 19: 5 hours @ $ 9.00 per hour 7/14 Employee 92: 5 hours @ $11.00 per hour FACTORY OVERHEAD: Assigned at 150% of direct labor cost. What is the total cost of Job number 83-421?

Compared to a general accounting system,a cost accounting system for a manufacturing company emphasizes:

Overapplied or underapplied overhead should be removed from the Factory Overhead account at the end of each accounting period.

Morris Company applies overhead based on direct labor costs.For the current year,Morris Company estimated total overhead costs to be $400,000,and direct labor costs to be $2,000,000.Actual overhead costs for the year totaled $380,000,and actual direct labor costs totaled $1,800,000. -At year-end,Factory Overhead is:

A manufacturing company applies overhead using direct labor cost.The company's Work in Process Inventory account has a $15,000 debit balance after all posting is completed,and the cost sheet of the one job still in process shows direct material costs of $6,600 and direct labor costs of $3,000.What is the company's predetermined overhead rate?

A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead is called a:

Oxford Company uses a job order costing system.In the last month,the system accumulated labor time tickets total $24,600 for direct labor and $4,300 for indirect labor.How are these costs recorded?

Both direct and indirect labor costs are recorded on individual job cost sheets.

Mesa Corp.allocates overhead to production on the basis of direct labor costs.Mesa's total estimated overhead is $450,000 and estimated direct labor is $180,000.Determine the amount of overhead applied to a job which used $20,000 of direct labor.

Materials requisitions and time tickets are cost accounting source documents.

The job order cost sheets used by Greene Company revealed the following: Job No.135 was completed during May and Jobs No.134 and 135 were shipped to customers in May.What was the company's cost of goods sold for May and the balance of Work in Process inventory on May 31?

A time ticket is a source document used to record the total number of hours worked and serves as a source document for entries to record direct labor costs.

A company's job order costing system applies overhead based on direct labor cost.The company's estimated production costs were: direct labor,$57,600; direct materials,$76,800; and factory overhead,$9,600.Calculate the company's predetermined overhead rate.

Drop Anchor takes special orders to manufacture sail boats for high-end customers.Prepare journal entries to record the transactions below and prepare job cost sheets for September. a.Purchased raw materials on credit,$145,000. b.Materials requisitions: Job 240,$48,000; Job 241,$36,000; Job 242,$42,000; indirect materials were $12,000. c.Time tickets used to charge labor to jobs: Job 240,$40,000; Job 241,$30,000; Job 242,$35,000,indirect labor is $25,000. d.The company incurred the following additional overhead costs: depreciation of factory building,$70,000; depreciation of factory equipment,$60,000; expired factory insurance,$10,000; utilities and maintenance cost of $20,000 were paid in cash. e.Applied overhead to all three jobs.The predetermined overhead rate is 190% of direct labor cost. f.Transferred jobs 240 and 242 to Finished Goods Inventory. g.Sold job 240 for $300,000 for cash. h.Closed the under- or over-applied overhead account balance.

Job cost sheets include both product and period costs.

Period costs for a manufacturing company,such as selling and administrative expenses,are recorded directly to Work in Process Inventory when they are incurred.

The total costs on job cost sheets for jobs that are completed but not yet sold equals the balance in the Finished Goods Inventory account.