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Exam 19: Job Order Cost Accounting

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Question 51

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The Work in Process Inventory account for DG Manufacturing follows.Compute the cost of jobs completed and transferred to Finished Goods Inventory. The cost of units transferred to finished goods is:

A) $97,000.
B) $105,900.
C) $88,100.
D) $95,200.
E) $92,500.

F) All of the above
G) None of the above

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Question 52

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A materials requisition is a source document used by materials managers of a manufacturing company to order raw materials from suppliers;it serves the same purpose as a purchase order in a merchandising company.

A) True
B) False

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Question 53

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The amount by which overhead incurred during a period exceeds the overhead applied to jobs is:

Predetermined overhead rates are calculated at the end of the accounting period once the actual amount of factory overhead is known.

A company that makes which of the following types of products would best be suited for a job costing system?

A materials requisition is a source document used by production managers to request materials for production and also used to assign materials costs to specific jobs or to overhead.

Job order production systems would be appropriate for companies that produce compact disks or disposable cameras.

The job order cost sheets used by Greene Company revealed the following: Job No.135 was completed during May and Jobs No.134 and 135 were shipped to customers in May.What was the company's cost of goods sold for May and the Work in Process inventory on May 31?

Immaterial amounts of overapplied overhead should be _____________ to the _____________________ account when closed.

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

Material amounts of under- or overapplied factory overhead are always closed entirely to Cost of Goods Sold at the end of an accounting period.

Both direct and indirect labor costs are recorded on the individual job cost sheets.

Lowden Company has an overhead application rate of 160% and allocates overhead based on direct material cost.During the current period,direct labor cost is $50,000 and direct materials used cost $80,000.Determine the amount of overhead Lowden Company should record in the current period.

MOB Corp.maintains an internet-based general ledger.Overhead is applied on the basis of direct labor costs.Its bookkeeper accidentally deleted most of the entries that had been recorded for January.A printout of the general ledger (in T-account form)showed the following: A review of the prior year's financial statements,the current year's budget,and January's source documents produced the following information: (1)Accounts Payable is used for raw material purchases only.January purchases were $49,000. (2)Factory overhead costs for January were $17,000 none of which is indirect materials. (3)The January 1 balance for finished goods inventory was $10,000. (4)There was a single job in process at January 31 with a cost of $2,000 for direct materials and $1,500 for direct labor. (5)Total cost of goods manufactured for January was $90,000. (6)All direct laborers earn the same rate ($13/hour).During January,2,500 direct labor hours were worked. (7)The predetermined overhead rate is based on direct labor costs.Budgeted (expected)overhead for the year is $195,000 and budgeted (expected)direct labor is $390,000. Fill in the missing amounts a through o above in the T-accounts above.

If a company applies overhead to production with a predetermined overhead rate,a credit balance in the Factory Overhead account at the end of the period means that:

The production activities for a customized product represent a(n) :

Minstrel Manufacturing uses a job order costing system.During one month Minstrel purchased $198,000 of raw materials on credit;issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,paid in cash,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.The journal entry to record the purchase of materials is:

A company charged the following amounts of overhead to jobs during the current year: $12,000 to jobs still in process,$42,000 to jobs completed but not sold,and $66,000 to jobs finished and sold.At year-end,the company's Factory Overhead account has a credit balance of $9,000,which is not a material amount.What entry (if any)should the company make at year-end related to this overhead balance?

Labor costs in production can be:

Job order costing systems normally use: