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Exam 2: Job Order Costing and Analysis

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Question 101

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A system of accounting for production operations that produces timely information about inventories and manufacturing costs per unit of product is a:

A) Finished goods accounting system.
B) General accounting system.
C) Manufacturing accounting system.
D) Cost accounting system.
E) Production accounting system.

F) C) and D)
G) B) and E)

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Question 102

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A job cost sheet includes:

A) Direct materials, direct labor, and operating costs.
B) Direct materials, estimated overhead, and administrative costs.
C) Direct labor, actual overhead, and selling costs.
D) Direct material, direct labor, and applied overhead.
E) Direct materials, direct labor, and selling costs.

F) A) and D)
G) C) and E)

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Question 103

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Using the following accounts and a predetermined overhead rate of 130% of direct labor cost, compute the amount of applied overhead.

Under a job order costing system, individual jobs are charged with actual overhead costs when they are transferred to finished goods.

Using the following accounts and a predetermined overhead rate of 90% of direct labor cost, determine the amount of applied overhead.

Underapplied overhead is the amount by which actual overhead cost exceeds the overhead applied to products during the period.

Job cost sheets are used to track all of the costs assigned to a job, including direct materials, direct labor, overhead, and all selling and administrative costs.

Cost accounting systems are used to:

A job cost sheet does not contain information that is useful for managing the production process.

Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The total manufacturing costs added during the period is:

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.

Manufacturing costs incurred for jobs completed during an accounting period can bypass the inventory accounts on the balance sheet and be recorded directly in expense accounts.

A company that uses a job order costing system incurred $10,000 of factory payroll during May. Prepare the May 31 entry assuming $8,000 is direct labor and $2,000 is indirect labor.

Lowden Company has a predetermined overhead rate of 160% and allocates overhead based on direct material cost. During the current period, direct labor cost is $50,000 and direct materials cost is $80,000. How much overhead cost should Lowden Company should apply in the current period?

The two basic types of cost accounting systems are:

Prepare journal entries to record the following transactions and events for April using a job order costing system. (a) Purchased raw materials on credit, $69,000. (b) Raw materials requisitioned: $26,000 direct and $5,400 indirect. (c) Factory payroll totaled $46,000, including $9,500 indirect labor. (d) Paid other actual overhead costs totaling $14,500 cash. (e) Applied overhead totaling $28,200. (f) Finished and transferred jobs totaling $77,500. (g) Jobs costing $58,800 were sold on credit for $103,000.

If a company applies overhead to production with a predetermined overhead rate, a credit balance in the Factory Overhead account at the end of the period means that:

Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Direct materials are assigned to each job according to actual cost. Jobs are marked up 20% above total manufacturing cost to determine the selling price. If Job M-47 used $350 of direct materials and took 20 direct hours of labor to complete, what is the selling price of the job?

Describe the flow of labor costs in a job order costing system, and identify the documents used in the system.

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of September, but needed an additional $3,000 of direct materials in October and additional direct labor of $6,500 to finish the job. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost. What is the amount of job costs added to Work in Process Inventory during October?