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Exam 4: Job Costing

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Question 61

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When using the proration approach the final balance in the Manufacturing Overhead Control account can be closed to which account(s) at year-end?

A) Work-in-Process Control
B) Income Summary
C) Finished Goods Inventory
D) Cost of Goods Sold
E) Work-in-Process Control,Finished Goods Inventory or Cost of Goods Sold would normally be used.

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Question 62

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Use the information below to answer the following question(s) . A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour) and a single indirect cost pool (staff support) .The direct categories in the new,refined costing system include: 1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time. 2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time. 3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time. The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours. -What is the budgeted direct cost rate per hour for office staff?

A) $11.250 per hour
B) $9.625 per hour
C) $7.500 per hour
D) $6.875 per hour
E) $6.125 per hour

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Question 63

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Transferring costs from indirect cost pools to cost objects is called

A law office employs full-time attorneys and five paraprofessionals.For the current year indirect costs were budgeted at $225,000,but actually amounted to $350,000. Direct and indirect costs are applied on a professional labour-hour basis which includes both attorney and paraprofessional hours.Total budgeted labour-hours were 25,000;however,actual labour-hours were 30,000. What is the actual indirect-cost rate,if a client used 5,000 professional labour-hours?

The balance in the manufacturing overhead allocated account,is carried over to the balance sheet for the subsequent year,to properly track all costs for job costing.

The difference between actual costing and normal costing is

A company currently has 30 full-time employees.Actual time for each employee was as follows: Consumer demand for the company's services is at 100 percent of time available.Each employee receives a salary of $75,000 per year. What is the total actual indirect cost allocation rate if management believes that clients should be charged for the employees' benefits?

Describe job-costing and process-costing systems.Explain when it would be appropriate to use each.

Use the information below to answer the following question(s) . Jim's Computer Products manufactures keyboards for computers.In June,the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2.The budgeted manufacturing overheads for the month were $34,500 and $37,500,respectively.For Job 501,the actual costs incurred in the two departments were as follows: Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2.The company uses a budgeted departmental overhead rate for applying overhead to production. -What is the budgeted indirect cost allocation rate for Department 2?

Use the information below to answer the following question(s) . Because the Beckworth Company used a budgeted indirect cost allocation rate for its manufacturing operations,the amount allocated ($190,000) was different from the actual amount incurred ($175,000) .These were the respective ending balances in the Manufacturing Overhead Allocated and Manufacturing Overhead control accounts. Before disposition of under/overallocated overhead,the following information was available: -What is the journal entry Beckworth Company should use to write-off the difference between allocated and actual overhead using the proration approach based on overhead allocated?

Cost assignment includes cost allocation for indirect costs and direct costs.

Sanders Company has two departments,X and Y.Overhead is applied based on budgeted direct labour cost in Department X,and budgeted machine hours in Department Y.The following additional information is available. Required: a.Compute the budgeted factory indirect cost allocation rate for Department X. b.Compute the budgeted factory indirect cost allocation rate for Department Y. c.What is the total overhead cost of Job 11? d.If Job 11 consists of 40 units of product,what is the unit cost of this job?

A local financial consulting firm employs 30 full-time staff.The budgeted compensation per employee is $50,000,for 2,000 hours.All direct labour costs are charged to clients. Any other costs are included in a single indirect-cost pool,allocated according to labour-hours.Actual indirect costs were $750,000.Budgeted indirect costs for the year are $525,000 and the firm expects to have 60 clients during the coming year. What is the total cost of a job which took 27 hours,using normal costing?

The general ledger account that combines the separate job cost records is called the ________ account.

Which of the following statements about normal costing is TRUE?

Place the following steps in the order suggested by the seven steps used to assign costs to individual jobs: A.Select the cost-allocation bases to use for allocating indirect costs to the job B.Compute the rate per unit of each cost-allocation base used to allocate indirect costs to the job C.Compute the total cost of the job by adding all direct and indirect costs assigned to the job D.Identify the direct costs of the job E.Compute the indirect costs allocated to the job F.Identify the indirect costs associated with each cost-allocation base G.Identify the job that is the chosen cost object

For normal costing,even though the budgeted indirect-cost rate is based on estimates,indirect costs are allocated to products based on actual levels of the cost-allocation base.

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 costs 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?

Hill Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products.Manufacturing overhead costs are applied on the basis of machine hours in the Machining Department and on the basis of direct labour hours in the Assembly Department.The following estimates were provided at the beginning of the current year: The accounting records of the company show the following data for Job #846: Required: a.Compute the manufacturing indirect cost allocation rate for each department. b.Compute the total cost of Job #846. c.Provide possible reasons why Hill Manufacturing uses two different cost allocation rates.

What is the appropriate journal entry if direct materials of $50,000 and indirect materials of $3,000 are sent to the manufacturing plant floor?