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Exam 4: Job Costing

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Question 101

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All of the following are general ledger accounts EXCEPT:

A) the Salaries Payable Control account
B) the Prepaid Insurance Control account
C) the Accounts Receivable subsidiary account for Ruben Electric
D) the Advertising Costs account

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Question 102

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Answer the following questions using the information below: Because the Abernathy Company used a budgeted indirect-cost rate for its manufacturing operations, the amount allocated ($200,000) was different from the actual amount incurred ($225,000) . -What is the journal entry used to write off the difference between allocated and actual overhead directly to cost of goods sold?

A)
B)
C)
D)

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Question 103

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Explain how a budgeted indirect-cost rate is determined.

Answer the following questions using the information below: Roiann and Dennett Law Office employs 12 full-time attorneys and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 20X3: -How much should the client be billed in an actual costing system if 200 professional labor-hours are used?

The difference between actual costing and normal costing is:

The basic source document for direct manufacturing labor is the:

Answer the following questions using the information below: Apple Valley Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: The actual material and labor costs charged to Job #432 were as follows: Apple Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year. -Manufacturing costs estimated for Job #432 total:

The advantage of using normal costing instead of actual costing is:

The product cost reported as inventoriable costs to shareholders may differ from product costs reported for government contracting.

The law firm of Smith & Jones has a staff of 30 lawyers and administrative staff. Budgeted total costs of the firm total $4,000,000 of which $2,500,000 is direct-labor costs. Assuming that the remaining costs are indirect and direct-labor cost is the allocation base, calculate the budgeted indirect cost rate.

The Materials Control account is increased when:

Normal costing is a costing system that traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs.

Which of the following statements regarding manufacturing overhead allocation is FALSE?

For a given job the direct costs associated with the job are:

Cowley County Hospital uses a job-costing system for all patients who have surgery. In March, the pre-operating room (PRE-OP)and operating room (OR)had budgeted allocation bases of 4,000 nursing hours and 2,000 nursing hours, respectively. The budgeted nursing overhead charges for each department for the month were $168,000 and $132,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $1,200,000 and 15,000 nursing hours for the month. For patient Fred Adams, actual hours incurred were eight and four hours, respectively, in the PRE-OP and OR rooms. He was in the hospital for 4 days (96 hours). Other costs related to Adams were: The hospital uses a budgeted overhead rate for applying overhead to patient stays. Required: What is the total cost of the stay of patient Fred Adams?

The actual indirect-cost rate is calculated by dividing actual total indirect costs by the actual total quantity of the cost-allocation base.

Constanza Company has the following balances as of the year ended December 31, 2010 Additional information is as follows: Required: a. Compute beginning direct materials inventory. b. Compute beginning WIP inventory. c. Compute beginning finished goods inventory. d. Compute actual factory overhead incurred.

An example of a denominator reason for calculating annual indirect-cost rates includes:

The ________ approach adjusts individual job-cost records to account for underallocated or overallocated overhead.