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Exam 20: Job Order Costing

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Question 91

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Overhead application is recorded with a

A) credit to Work in Process Inventory.
B) credit to Manufacturing Overhead.
C) debit to Manufacturing Overhead.
D) credit to job cost sheets.

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Question 92

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The accounting records of Roland Manufacturing Company include the following information: $\begin{array} { l r r } & { \text { Dec. } 31 } &\text { Jan. } 1 \\\text { Work in process inventory } & \$ 20,000 & \$ 50,000 \\\text { Finished goods inventory } & 120,000 & 150,000 \\\text { Direct materials used } & 350,000 & \\\text { Direct labor } & 160,000 & \\\text { Selling expenses } & 125,000 &\end{array}$ Manufacturing overhead is applied at a rate of 150% of direct labor cost. Instructions Answer the following questions: 1. What is the total of the debits to Work in Process Inventory during the year? 2. What is the amount transferred to Finished Goods Inventory during the year? 3. What is the cost of goods sold?

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Question 93

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The following information is available for Marks Company at December 31 2017: $\begin{array} { c c r } \text { 1. Inventory balance } & \text { Beginning of Year } & \text { End of Year } \\ \text { Finished Goods } & \$ 14,000 & \$ 10,000 \\ \text { Work in Process } & 6,000 & 12,000 \\ \text { Raw Materials } & 10,300 & 6,500 \end{array}$ 2. Debit postings to Work in Process Inventory during the year were: $\begin{array}{lr}\text { Direct materials } & \$ 90,000 \\\text { Direct labor } & 60,000 \\\text { Manufacturing overhead applied } & 75,000\end{array}$ 3. Sales totaled $\$ 310,000$ for the year. Instructions (a) Prepare a condensed cost of goods manufactured schedule. (b) Prepare an income statement for the year through gross profit.

When goods are sold the Cost of Goods Sold account is debited and Work in Process Inventory account is credited.

The labor costs that have been identified as indirect labor should be charged to

The two basic types of cost accounting systems are

Match the items in the two columns below by entering the appropriate code letter in the space provided.

Which of the following is not a control account?

The following amounts were reported by Burke Company before adjusting its immaterial overapplied manufacturing overhead of $8000. $\begin{array}{lr}\text { Raw Materials Inventory } & \$ 40,000 \\\text { Finished Goods Inventory } & 60,000 \\\text { Work in Process Inventory } & 100,000 \\\text { Cost of Goods Sold } & 730,000\end{array}$ Instructions Compute what amount Burke will report as cost of goods sold after it disposes of its overapplied overhead.

Simpson Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $180000 of direct materials costs and $200000 of manufacturing overhead. The total manufacturing costs for Job No. 305 is:

A job cost sheet of Fugate Company is given below. Instructions (a) Answer the following questions. (1) What is the predetermined manufacturing overhead rate? (2) What are the total cost and the unit cost of the completed job? (b) Prepare the entry to record the completion of the job.

Distinguish between the two types of cost accounting systems. (b) May a company use both types of cost accounting systems?

An important feature of a job order cost system is that each job

A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company.

If actual manufacturing overhead was greater than the amount of manufacturing overhead applied to jobs the Manufacturing Overhead account will have a ___________ balance and overhead is said to be ______________.

Factory labor costs

Which of the following would be accounted for using a job order cost system?

The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity expressed in terms of a common activity base.

Klinger Company estimates that annual manufacturing overhead costs will be $4800000 for 2017. The actual overhead costs at the end of 2017 are $4980000. Activity base information for 2017 follows: $\begin{array} { l r r } \text { Activity Base } & \text { Estimated } & { \text { Actual } } \\\hline \text { Direct Labor Cost } & \$ 3,000,000 & \$ 3,150,000 \\\text { Direct Labor Hours } & 200,000 & 212,000 \\\text { Machine Hours } & 150,000 & 152,000\end{array}$ Instructions (a) Compute the predetermined overhead rate for each activity base. (b) Compute the amount of overhead applied in 2017 for each activity base. (c) Compute the amount of under- or overapplied overhead for 2017 for each activity base.

Henson Company applies overhead on the basis of 120% of direct labor cost. Job No. 190 is charged with $140000 of direct materials costs and $180000 of manufacturing overhead. The total manufacturing costs for Job No. 190 is