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Exam 19: Job Order Costing

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Question 1

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KL Company uses a job order costing system. During the month of July, the following events occurred: (a) Purchased raw materials on credit, $32,000. (b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials. (c) Assigned the factory payroll totaling $37,700, which includes $8,200 indirect labor, to jobs and overhead. Make the necessary journal entries to record the above transactions and events.

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Question 2

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The collection of job cost sheets for all jobs in process makes up the subsidiary ledger controlled by the _______________Inventory.

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Question 3

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A ________ is a separate record maintained for each job.

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 journal entry to record the payment of the factory payroll is:

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead rate exceeds the actual overhead incurred during a period.

The amount by which the overhead applied to jobs during a period exceeds the overhead incurred during the period is known as:

If actual overhead incurred during a period exceeds applied overhead, the difference will be a credit balance in the Factory Overhead account at the end of the period.

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:

Job order production is also known as:

In comparison to a general accounting system, a cost accounting system for a manufacturing company places an emphasis on:

The production of one unit of Product BJM used $27.50 of direct materials and $21.00 of direct labor. The unit sold for $76.00 and was assigned overhead at a rate of 30% of labor costs. What is the gross profit per unit on its sale?

Job order costing systems normally use:

The Marina Corp. has applied overhead to jobs during the period as follows: $\begin{array} { l c } \text { Jobs finished and sold } & \$ 46,000 \\\text { Jobs started and in process } & 54,000 \\\text { Jobs finished and unsold } & 100,000\end{array}$ The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is:

When factory payroll for indirect labor is assigned, ________ is debited.

Calwell Corp. uses a job order costing system. Four jobs were started during the current year. The following is a record of the costs incurred: $\begin{array} { l | l | l | l } \text { Job \# } & \begin{array} { l } \text { Material } \\\text { Used }\end{array} & \begin{array} { l } \text { Direct } \\\text { Labor } \\\text { Used }\end{array} & \begin{array} { l } \text { Direct Labor } \\\text { Hours Used }\end{array} \\\hline 1010 & \$ 45,000 & \$ 72,000 & 8,000 \\\hline 1011 & 59,000 & 77,000 & 7,000 \\\hline 1012 & 35,000 & 30,000 & 3,000 \\\hline 1013 & 26,000 & 40,000 & 5,000\end{array}$ Actual overhead costs were $55,800. The predetermined overhead rate is $2.40 per direct labor hour. During the year, Jobs 1010, 1012, and 1013 were completed. Also, Jobs 1010 and 1013 were sold for $387,000. Assuming that this is Calwell's first year of operations: (a) Make the necessary journal entries to charge the costs to the jobs started and to record the completion and sale of finished jobs. (b) Calculate the balance in the Work in Process Inventory, Finished Goods Inventory, and Factory Overhead accounts. Does the Factory Overhead account balance indicate an over- or underapplied overhead?

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

If overapplied or underapplied overhead is material, it should be disposed of by allocating it to:

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 the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. - What is the balance in the Work in Process account at the end of September relative to Job A3B?

When a job involves producing more than one unit of a custom product, it is often called a job lot.

EXP, Inc. had the following activities during its most recent period of operations: (a) Purchased raw materials on account for $140,000 (both direct and indirect materials are recorded in the Raw Materials Inventory account). (b) Issued raw materials to production of $130,000 (80% direct and 20% indirect). (c) Incurred factory labor costs of $250,000; allocated the factory labor costs to production (70% direct and 30% indirect). (d) Incurred factory utilities costs of $20,000; this amount is still payable. (e) Applied overhead at 80% of direct labor costs. (f) Recorded factory depreciation, $22,000. Prepare journal entries to record the above transactions.