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Exam 19: Job Order Costing

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Question 31

True/False

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In a factory with several processing departments, a single factory overhead rate may not provide accurate product costs and effective cost control.

A) True
B) False

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Question 32

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Job cost sheets can provide information to managers for all of the following except

A) the cost impact of materials changes
B) the cost impact of continuous improvement in the manufacturing process
C) the cost impact of materials price or direct labor rate changes over time
D) utilities, managerial salaries, and depreciation of computers in the corporate office

E) A) and B)
F) A) and C)

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Question 33

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During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. Factory overhead applied to production was $23,000. The entry to record the factory overhead applied to production is

Match the costs that follow to the type of product cost (a-c) or designate as not a product cost (d) . -Machine operator

Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in job order costing systems.

The current year's advertising costs are normally considered period costs.

Materials are transferred from the storeroom to the factory in response to materials requisitions.

Flagler Company allocates overhead based on machine hours. It estimated overhead costs for the year to be $420,000. Estimated machine hours were 50,000. Actual hours and costs for the year were 46,000 machine hours and $380,000 of overhead.​ (a)Calculate the predetermined factory overhead rate for the year. (b)What is the amount of applied overhead for the year? (c)What is the amount of under- or overapplied overhead for the year? Indicate whether it is over- or underapplied.

The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

During April, Cavy Company incurred factory overhead as follows:​ $\begin{array} { l r } \text { Indirect materials } & \$ 11,000 \\\text { Factory supervision labor } & 4,000 \\\text { Utilities } & 500 \\\text { Depreciation (factory) } & 700 \\\text { Small tools } & 300 \\\text { Equipment rental } & 750\end{array}$ Record the entry for factory overhead incurred during April.

Depreciation expense on factory equipment is part of factory overhead cost.

Use the information below for Adams Company to answer the questions that follow. ​ Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: ​ ​ Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. -What is the ending balance of Work in Process for Adams Company at the end of the first quarter?

Sanders Inc. has applied $567,988 of overhead to jobs in the cost ledger. Actual overhead at the end of the year is $575,000. The adjustment for over- or underapplied overhead is

Selected accounts with a credit amount omitted are as follows:​ ​ What was the balance of Work in Process as of April 30?

Job cost sheets can provide information to managers on unit cost trends, the cost impact of continuous improvement in the manufacturing process, the cost impact of materials changes, and the cost impact of direct materials price or direct labor rate changes over time.

The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications.

Using the job order cost system, service organizations are able to bill customers on a weekly or monthly basis, even when the job has not been completed.

Direct labor cost is an example of a period cost.

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had total production costs of $375,000. The entry to record the transfer of costs from work in process to finished goods is

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The entry to record the transfer of costs from finished goods to cost of goods sold is