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Exam 19: Job Order Cost Accounting

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Question 21

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The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed.The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800.Therefore,the company's overhead application rate is:

A) 40%.
B) 50%.
C) 80%.
D) 200%.
E) 220%.

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Question 22

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A ________ accounting system records production activities using a perpetual inventory system. Answers must appear in this order.

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Question 23

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When time ticket information is entered into the accounting system,the journal entry is a debit to Factory Payroll and a credit to Work in Process Inventory.

Actual factory overhead incurred in a job costing system is debited to a Factory Overhead general ledger account and credited to various other accounts.

Andrew Industries purchased $165,000 of raw materials on account during the month of March.The beginning Raw Materials Inventory balance was $22,000,and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials.What amount will Andrew transfer to Work In Process Inventory for the month of March?

The predetermined overhead rate for Shilling Manufacturing is based on estimated direct labor costs of $350,000 and estimated factory overhead of $770,000.Actual costs incurred were: a.Calculate the predetermined overhead rate and calculate the overhead applied during the year. b.Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount. a.Predetermined overhead rate = $770,000/$350,000 = 220% of direct labor cost Overhead applied = $347,000 * 220% = $763,400 b.

Omega Contractors manufactures each house to customer specifications.It most likely would use:

A company has an overhead application rate of 125% of direct labor costs.How much overhead would be allocated to a job if it required total labor costing $20,000?

Andrew Industries purchased $165,000 of raw materials on account during the month of March.The beginning Raw Materials Inventory balance was $22,000,and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials.What is the ending Raw Materials Inventory balance for March?

Factory overhead is often collected and summarized in a subsidiary factory overhead ledger.

Mesa Corp.allocates overhead to production on the basis of direct labor costs.Mesa'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.

Southwick Company uses a job order costing system.On November 1,$15,000 of direct materials and $3,500 of indirect materials were requisitioned for production.Prepare the general journal entries to record this requisition.

The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $3,200 debit balance after all posting is completed.The cost sheet of the one job still in process shows direct material cost of $1,400 and direct labor cost of $800.Therefore,the amount of the applied overhead is:

Materials requisitions and time tickets are cost accounting source documents.

There are two basic types of cost accounting systems: job order costing and periodic costing.

The Marina Corp.has applied overhead to jobs during the period as follows: 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:

A __________ is calculated by relating total estimated factory overhead to an allocation factor such as total estimated direct labor cost,and is used to allocate factory overhead to specific jobs.

CWN Company uses a job order costing system and last period incurred $80,000 of actual overhead and $100,000 of direct labor.CWN estimates that its overhead next period will be $75,000.It also expects to incur $100,000 of direct labor.If CWN bases applied overhead on direct labor cost,its predetermined overhead rate for the next period should be:

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

A document in a job order costing system that is used to record the costs of producing a job is a(n) :