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Exam 20: Job Order Costing

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Question 31

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Process costing is not used when

A) similar goods are being produced.
B) large volumes are produced.
C) jobs have distinguishing characteristics.
D) a series of connected manufacturing processes is necessary.

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Question 32

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Graham Manufacturing is a small manufacturer that uses machine-hours as its activity base for assigned overhead costs to jobs. The company estimated the following amounts for 2010 for the company and for Job 62: During 2010, the actual machine-hours totaled 94,000, and actual overhead costs were $71,000. Instructions (a) Compute the predetermined overhead rate. (b) Compute the total manufacturing costs for Job 62. (c) How much overhead is over or underapplied for the year for the company? State amount and whether it is over- or underapplied. (d) If Graham Manufacturing sells Job 62 for $14,000, compute the gross profit.

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(a) $72,000 / 90,000 = $0.80 per machine...

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Question 33

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Factory labor should be assigned to selling and administrative expenses on a proportionate basis.

Fringe benefits and payroll taxes associated with factory workers should be accumulated as a part of Factory Labor.

Chmelar Manufacturing Company developed the following data: How much are total manufacturing costs for the period?

A job order cost system is most appropriate when a large volume of uniform products are produced.

The accounting records of Roland Manufacturing Company include the following information: 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?

A ______________ cost system is appropriate when similar products are continuously produced, whereas a ______________ cost system would be more appropriate if the product is custom-made.

Cost accounting is primarily concerned with accumulating information about product costs.

During 2010, Cotte Manufacturing expected Job No. 59 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Cotte applied overhead based on direct labor cost. Actual production required an overhead cost of $280,000, $550,000 in materials used, and $220,000 in labor. All of the goods were completed. How much is the amount of over- or underapplied overhead?

In a job order cost system, a credit to Manufacturing Overhead will be accompanied by a debit to

In a job order cost system, it would be correct in recording the purchase of raw materials to debit

The following information is available for Marks Company at December 31, 2010: Instructions (a) Prepare a condensed cost of goods manufactured schedule. (b) Prepare an income statement for the year through gross profit.

There are two basic types of cost accounting systems: (1)__________________ system, and (2)__________________ system.

A company assigned overhead to work in process. At year end, what does the amount of overapplied overhead mean?

Fort Corporation had the following transactions during its first month of operations: 1. Purchased raw materials on account, $85,000. 2. Raw Materials of $30,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials. 3. Factory labor costs incurred were $100,000 of which $80,000 pertained to factory wages payable and $20,000 pertained to employer payroll taxes payable. 4. Time tickets indicated that $84,000 was direct labor and $16,000 was indirect labor. 5. Overhead costs incurred on account were $112,000. 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods. 8. Finished goods costing $100,000 to manufacture were sold on account for $130,000. Instructions Journalize the above transactions for Fort Corporation.

If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period, overhead is said to be

Gannon Company had the following information at December 31: If the cost of goods manufactured during the year amounted to $1,260,000 and annual sales were $1,650,000, the amount of gross profit for the year is

Greer Company developed the following data for the current year: How much is Greer Company's ending work in process inventory for the year?

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows: Instructions Compute the predetermined overhead rate.