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Exam 15: Job Order Costing

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Question 41

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At the end of the year, any balance in the Manufacturing Overhead account should be eliminated as an adjustment to ___________________.

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Question 42

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Requisitions for direct materials are posted daily to the individual job cost sheets.

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Question 43

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Fort Corporation had the following transactions during its first month of operations: 1. Purchased raw materials on account, $85,000. 2. Raw Materials of $30,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials. 3. Factory labor costs incurred were $175,000 of which $145,000 pertained to factory wages payable and $30,000 pertained to employer payroll taxes payable. 4. Time tickets indicated that $145,000 was direct labor and $30,000 was indirect labor. 5. Overhead costs incurred on account were $198,000. 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods. 8. Finished goods costing $100,000 to manufacture were sold on account for $130,000. Instructions Journalize the above transactions for Fort Corporation.

Foster Manufacturing uses a job order cost accounting system. On April 1, the company has Work in Process Inventory of $7,600 and two jobs in process: Job No. 221, $3,600, and Job No. 222, $4,000. During April, a summary of source documents reveals the following: Foster applies manufacturing overhead to jobs at an overhead rate of 70% of direct labor cost. Job No. 221 is completed during the month. Instructions (a) Prepare summary journal entries to record the raw materials requisitioned, factory labor used, the assignment of manufacturing overhead to jobs, and the completion of Job No. 221. (b) Calculate the balance of the Work in Process Inventory account at April 30.

An important feature of a job order cost system is that each job

A process cost system would most likely be used by a company that makes

The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31, 2017: In addition, the following transactions occurred in 2017: 1. Raw materials purchased on account, $75,000. 2. Incurred factory labor, $80,000, all is direct labor. (Credit Factory Wages Payable). 3. Incurred the following overhead costs during the year: Utilities $6,800, Depreciation on manufacturing machinery $8,000, Manufacturing machinery repairs $9,200, Factory insurance $9,000 (Credit Accounts Payable and Accumulated Depreciation). 4. Assigned $80,000 of factory labor to jobs. 5. Applied $36,000 of overhead to jobs. Instructions (a) Journalize the above transactions. (b) Reproduce the manufacturing cost and inventory accounts. Use T-accounts. (c) From an analysis of the accounts, compute the following: 1. Raw materials used. 2. Completed jobs transferred to finished goods. 3. Cost of goods sold. 4. Under- or overapplied overhead.

If, at the end of the year, Manufacturing Overhead has been overapplied, it means that

Manufacturing overhead applied is added to direct labor incurred and to what other item to equal total manufacturing costs for the period?

Greer Company developed the following data for the current year: How much is Greer Company's direct labor cost for the year?

Raw Materials Inventory, Factory Labor, and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used.

Which one of the following should be equal to the balance of the Work In Process Inventory account at the end of the period?

The predetermined overhead rate is based on the relationship between

Garner Company begins operations on July 1, 2017. Information from job cost sheets shows the following: Job 102 was completed in July. Job 100 was completed in August, and Jobs 101 and 103 were completed in September. Each job was sold for 60% above its cost in the month following completion. Instructions (a) Compute the balance in Work in Process Inventory at the end of July. (b) Compute the balance in Finished Goods Inventory at the end of September. (c) Compute the gross profit for August.

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows: Instructions Compute the predetermined overhead rate.

When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs.

Cost of goods sold is obtained from

Lando Company reported the following amounts for 2017: Instructions Calculate (a) the cost of materials used in production and (b) total manufacturing costs.

Conceptually, any under- or overapplied overhead at the end of the year should be allocated among all of the following except

If the entry to assign factory labor showed only a debit to Work In Process Inventory, then all labor costs were