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Exam 19: Job Order Costing

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Question 111

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The rate established prior to the beginning of a period that uses estimated overhead and an allocation factor such as estimated direct labor, and that is used to assign overhead cost to jobs, is the:

A) Predetermined overhead rate.
B) Overhead variance rate.
C) Miscellaneous overhead rate.
D) Chargeable overhead rate.
E) Estimated labor cost rate.

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Question 112

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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.

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Question 113

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When the actual overhead incurred during an accounting period is more than the overhead applied to jobs, the overhead is said to be ________.

Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Adams 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 time ticket is a source document that an employee uses to report how much indirect labor was performed for a job and is used to determine the amount of direct labor to charge to the job.

The balance in the Work in Process Inventory at any point in time is equal to:

A company's file of job cost sheets for jobs that are completed but not yet sold equals the balance in the Work in Process Inventory account.

Chumley Advertising Agency contracted with a company to prepare an ad campaign. Chumley uses a job order costing system. Chumley estimates that the job will take 140 designer hours at $90 per hour and 85 staff hours at $45 per hour. Chumley uses two overhead rates in applying overhead to jobs: Designer-related at $100 per designer hour and staff-related at $50 per staff hour. Determine the total estimated cost for this job.

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

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.

In a job order costing system, raw materials requisitioned as direct materials are debited to ________; indirect materials are debited to ________.

Franklin Manufacturing uses a job order costing system that charges overhead to jobs on the basis of direct labor cost. Franklin used the following cost predictions: overhead costs $1,285,750, and direct labor costs of $695,000. At year-end, the company's records show that actual overhead costs for the year are $1,278,800, and actual direct labor costs are $692,000. a. Determine the predetermined overhead rate for the year. b. Compute the amount of overapplied or underapplied overhead. c. Prepare the adjusting entry to allocate the over- or underapplied overhead assuming the amount is immaterial.

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