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Exam 19: Job Order Costing

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Question 81

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Wilkes Manufacturing uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost.At year-end,the Goods in Process Inventory account shows the following. a.Determine the overhead rate used (based on direct material cost). b.Only one job remained in the goods in process inventory at December 31.Its direct materials cost is $60,000.How much direct labor cost and overhead cost are assigned to it?

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a.Rate = $...

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Question 82

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Cost accounting information is helpful to management in controlling costs but has no effect on pricing decisions.

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Question 83

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A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used.

If overhead applied is less than actual overhead incurred,it is:

Deltan Corp.allocates overhead to production on the basis of direct labor costs.Deltan's total estimated overhead is $450,000 and estimated direct labor is $180,000.Determine the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory.

A job order cost accounting system would best fit the needs of a company that makes:

Bard Manufacturing uses a job order cost accounting system.During one month Bard purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Bard incurred a factory payroll of $150,000,paid in cash,of which $40,000 is classified as indirect labor.Bard uses a predetermined overhead application rate of 150% of direct labor cost.The journal entry to record the application of factory overhead to production is:

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

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.

A time ticket is a source document used by an employee to record the number of hours worked on a particular job during the work day.

Alton Company has an overhead application rate of 160% and allocates overhead based on direct materials.During the current period,direct labor is $50,000 and direct materials used are $80,000.Determine the amount of overhead Alton Company should record in the current period.

Any material amount of under- or overapplied factory overhead must always be closed to Cost of Goods Sold at the end of an accounting period.

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

Minchoy Corporation uses a job order cost accounting system.Five jobs were worked on during the current year.The predetermined overhead rate is 20% of direct labor costs.The following cost information is available (all materials and time ticket information applies to direct costs): Part 1-Complete the job cost sheets for each job. Part 2-Identify the amounts of each of the following accounts at the end of the period a.Work in Process____________________ b.Finished Goods____________________ c.Cost of Goods Sold____________________

Hancock Manufacturing allocates overhead to production on the basis of direct labor costs.At the beginning of the year,Hancock estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000.During the year Hancock incurred $418,000 in materials costs,$413,200 in overhead costs and $224,000 in direct labor costs.Compute the amount of overhead applied to jobs during the year.

A source document that production managers use to request materials for production and that is used to assign materials costs to specific jobs or to overhead is a:

The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:

Since a predetermined overhead allocation rate is established before a period begins,this rate is revised many times during the period to compensate for inaccurate estimates previously made.

Selected information from the budget of the Khalid Corp.at the beginning of the year follows: Calculate the predetermined overhead allocation rate if the company uses the following as a basis: (a)Direct labor hours. (b)Direct labor cost. (c)Machine hours.

Explain what a predetermined overhead allocation rate is,how it is calculated,and why it is used.