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Exam 2: Job Order Costing

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Question 61

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Factory overhead is applied to production using a predetermined overhead rate.

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Question 62

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Match each of the following phrases with the term (a-e) that it most closely describes it. Each term will be used only once.

Premises

Responses

these make up the work in process subsidiary ledger

job cost sheets

serves as the basis for recording direct labor on a job cost sheet

receiving report

serves as the basis for recording materials used

cost allocation

prepared when materials that have been ordered are received and inspected

time tickets

the process by which factory overhead is assigned to a cost object

materials requisitions

Premises

these make up the work in process subsidiary ledger

serves as the basis for recording direct labor on a job cost sheet

serves as the basis for recording materials used

prepared when materials that have been ordered are received and inspected

the process by which factory overhead is assigned to a cost object

Responses

job cost sheets

receiving report

cost allocation

time tickets

materials requisitions

Show Answer

Correct Answer

Premises

Responses

these make up the work in process subsidiary ledger

serves as the basis for recording direct labor on a job cost sheet

serves as the basis for recording materials used

prepared when materials that have been ordered are received and inspected

the process by which factory overhead is assigned to a cost object

Premises

these make up the work in process subsidiary ledger

serves as the basis for recording direct labor on a job cost sheet

serves as the basis for recording materials used

prepared when materials that have been ordered are received and inspected

the process by which factory overhead is assigned to a cost object

Responses

Question 63

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Match each of the following phrases with the term (a-g) that it most closely describes.

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The entry to record the transfer of costs from finished goods to cost of goods sold is

Prepare the journal entry for materials and labor, based on the following: Raw materials issued: Job No. 609, $850; for general use in factory, $600 Labor time tickets: Job No. 609, $1,600; $400 for supervision

The recording of the application of factory overhead costs to jobs would include a credit to

National Survey Company uses a job order cost system. (a) Indicate the source of the data for debiting Work in Process for each of the following: (1) Direct materials requisitioned (2) Direct labor used (b) Indicate the source of the data for crediting Work in Process for jobs completed. (c) Present a list of the three controlling accounts used in the general ledger to record the  inventories and, in each case, indicate the related subsidiary ledger.

A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable from each other during a continuous production process.

The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 with 300,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date) , the overhead is

At the end of the period, Carson Company had the following balances in selected accounts: Materials                                        $    80,000 Finished goods                                   190,000 Work in process                                   70,000 Cost of goods sold                          1,000,000 Factory overhead                                 30,000 (a) The factory overhead balance is relatively small; prepare the journal entry to close the Factory     Overhead account assuming a debit balance. What does a debit balance mean? (b) The factory overhead balance is relatively small; prepare the journal entry to close the Factory     Overhead account assuming a credit balance. What does a credit balance mean?

Information about costs developed through a job order cost system cannot be used to evaluate an organization's cost performance.

The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300 hours. The actual factory overhead for the year was $1,375,000. (a) Determine the total factory overhead amount applied. (b) Calculate the over- or underapplied amount for the year. (c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold.

Direct labor cost is an example of a period cost.

For which of the following businesses would the process cost system be appropriate?

The journal entry to record the transfer of 1,600 units of part number 1177 with a value of $2.50 each,  to work in process is

Which of the following is not a reason a service firm would use a job order costing system?

At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to

The following account appears in the ledger after only part of the postings have been completed for July, the first month of the current fiscal year: Factory overhead is applied to jobs at the rate of 60% of direct labor cost. The actual factory overhead incurred for July was $75,000. Jobs completed during the month totaled $301,200. (a) Prepare the journal entries to record (1) the application of factory overhead to production during July (2) the jobs completed during July. (b) What is the balance of the factory overhead account on July 31? (c) Was factory overhead overapplied or underapplied on July 31? (d) Determine the balance of Work in Process on July 31.

The Jase Company allocates overhead based on a predetermined overhead rate of $9.00 per direct labor hour.  Job J904 required 8 tons of direct material at a cost of $600 per ton and took employees who earn $21 per hour a total of 80 hours to complete.  What is the total cost of Job J904?

On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead, which have entered into the manufacturing process but are associated with products that have not been finished, are reported as direct materials inventory.