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Exam 20: Costing Systems: Job Order Costing

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Question 21

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In cost-plus contracts, the "plus" is the sales price.

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Question 22

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Which of the following is not an objective of product costing systems?

A) To provide information for cost planning
B) To assist in the preparation of the income statement
C) To determine the optimal amount of products to manufacture
D) To provide information for product pricing

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Question 23

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Job costs in a service organization end up in the Finished Goods Inventory account when a job is completed.

Which of the following products probably would be produced by a company using a process costing system?

The basic document for keeping track of costs in a job order costing system is a

Costs for individual jobs are maintained on job order cost cards when job order costing is in use.

Which of the following products probably would be manufactured using a job order costing system?

In a job order costing system, the subsidiary ledger for the Work in Process Inventory account consists of

Quicker Company uses a job order costing system. On May 1, Quicker Company's Work in Process Inventory account shows a beginning balance of $161,000. Production activity for May was as follows: Materials costing $91,000, along with operating supplies of $18,000, were requisitioned into production. Quicker Company's total payroll was $316,000, of which $77,000 was indirect labor. Overhead is applied at a rate of 120 percent of direct labor cost. Quicker's Cost of Goods Sold for the month of May was $692,000. Finished Goods Inventory was $71,500 on May 1 and $84,000 on May 31. (Quicker does not close out overhead accounts until year-end.) a. Calculate Quicker's cost of goods completed for May. b. Calculate Quicker's work in process ending inventory (May 31). c. One of the jobs that was started in May, Job 266, was completed in June. Job 266 was 200 special-order lamps. The following costs had been applied to Job 266 as of June 1: direct materials, $1,400; direct labor, $1,800; overhead, $2,160. In June, $580 in direct materials cost and $900 of direct labor cost were added to complete Job 266. What was the cost per unit for Job 266? (Show your computations.)

As related to a job order costing system, answer the following short questions: a. What is a job order costing system? Identify three kinds of companies that would use such as system. b. What is a job order? c. What is the purpose of a job order cost card? Identify the kinds of information recorded on it.

A basic part of a job order costing system is the set of procedures and entries used to record the costs incurred for materials, labor, and overhead.

In a service organization using a job order costing system, actual overhead will be the same as applied overhead.

In a job order costing system, indirect labor costs are transferred to the Overhead account by increasing the Factory Payroll account and decreasing the Overhead account.

When the amount of overhead applied differs from actual, if it is an insignificant dollar amount it is usually written off to

The _________ provide(s) the most direct means of calculating unit costs for a job.

Logan Company uses a job order costing system. A predetermined overhead rate of $7 per machine hour in Department A and 220 percent per direct labor dollar in Department B has been established based upon the following information at the beginning of the year: Job 19 for 100 units is started in Department A and completed in Department B. Determine the total cost of Job 19 and complete the job cost card based on the following information: $\begin{array}{lrr} & \text { Department } A & \text { Department B } \\\text { Direct materials } & \$ 800 &\$ 950\\\text { Direct labor dollars } & \$ 490 & \$ 180 \\\text { Direct labor hours } & 30 &12 \\\text { Machine hours } & 15 & 30 \\\hline\end{array}$

Which of the following items most likely would be manufactured using a process costing system?

Costs assigned to the building of a house should appear on the income statement when

Regardless of the cost accounting system used, when the products are completed, they are transferred from work in process inventory to finished goods inventory.

The types of computations for costs to be transferred out of Work in Process Inventory differ if the production process involves multiple departments rather than a single department.