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Exam 15: Job Order Costing

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Question 81

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At the end of the year, any balance in the Manufacturing Overhead account is generally eliminated by adjusting

A) Work In Process Inventory.
B) Finished Goods Inventory.
C) Cost of Goods Sold.
D) Raw Materials Inventory.

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Question 82

Multiple Choice

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Spencer Inc. applies overhead to production at a predetermined rate of 80% based on direct labor cost. Job No. 130, the only job still in process at the end of August, has been charged with manufacturing overhead of $6,400. What was the amount of direct materials charged to Job 130 assuming the balance in Work in Process inventory is $20,000?

A) $7,000.
B) $6,400.
C) $5,600.
D) $20,000.

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Question 83

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A job order cost accounting system is fully integrated into the general ledger of a company. Identify the major general ledger accounts used in a job order cost system. Explain how manufacturing costs flow through these accounts so that inventories may be costed and income determined when goods are sold.

Edwards Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $1,800,000 for the year, and machine usage is estimated at 200,000 hours. In January, $186,000 of overhead costs are incurred and 22,000 machine hours are used. For the remainder of the year, $1,940,000 of additional overhead costs are incurred and 214,000 additional machine hours are worked. Instructions (a) Compute the manufacturing overhead rate for the year. (b) What is the amount of over- or underapplied overhead at January 31? (c) What is the amount of over- or underapplied overhead at December 31?

Actual manufacturing overhead costs should be charged to the Work in Process Inventory account as they are incurred.

Time tickets should be approved by

A process cost accounting system is appropriate for similar products that are continuously mass produced.

Which one of the following is a source document that impacts the job cost sheet?

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

In determining total manufacturing costs on the cost of goods manufactured schedule,

Gallagher Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $425,000 for the year, and machine usage is estimated at 125,000 hours. For the year, $450,000 of overhead costs are incurred and 130,000 hours are used. Instructions (a) Compute the manufacturing overhead rate for the year. (b) What is the amount of under - or overapplied overhead at December 31? (c) Assuming the under - or overapplied overhead for the year is not allocated to inventory accounts, prepare the adjusting entry to assign the amount to cost of goods sold

Emley Company incurred direct materials costs of $750,000 during the year. Manufacturing overhead applied was $700,000 and is applied based on direct labor costs. The predetermined overhead rate is 70%. How much are Emley Company's total manufacturing costs for the year?

Factory labor costs

The following information is available for Marks Company at December 31, 2017: Instructions (a) Prepare a condensed cost of goods manufactured schedule. (b) Prepare an income statement for the year through gross profit.

When raw materials are purchased, the Work in Process Inventory account is debited.

The perpetual inventory method cannot be used in a job order cost system.

Finished Goods Inventory is charged for the cost of jobs completed during a period.

Hayward Manufacturing Company developed the following data: Hayward Manufacturing Company's total manufacturing costs for the period is

Match the items below.

Simmons Inc. applies overhead to production at a predetermined rate of 90% based on direct labor cost. Job No. 250, the only job still in process at the end of August, has been charged with manufacturing overhead of $8,100. What was the amount of direct materials charged to Job 250 assuming the balance in Work in Process inventory is $30,000?