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Exam 19: Job Order Costing

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Question 81

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A company that uses a job order costing system incurred $10,000 of factory payroll during May. Present the May 31 entry assuming $8,000 is direct labor and $2,000 is indirect labor.

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Question 82

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Overapplied overhead is the amount by which actual overhead cost exceeds the overhead applied to products during the period.

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Question 83

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Predetermined overhead rates are calculated before the start of the accounting period, and are therefore based on estimates.

The Factory Overhead account will have a debit balance at the end of a period if overhead applied during the period is greater than the overhead incurred.

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, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. -Minstrel's beginning and ending Work in Process Inventory are $15,500 and $27,000 respectively. Compute the cost of product transferred to Finished Goods Inventory:

Using the following accounts and an overhead rate of 90% of direct labor cost, determine the amount of applied overhead.

Job order production systems would be appropriate for companies that produce training films for a specific customer or custom-made furniture to be used in a new five-star resort hotel.

A ________ accounting system records production activities using a perpetual inventory system.

A company uses a job order costing system and applies overhead on the basis of direct labor cost. A summary of the company's Work in Process Inventory account for December appears below. Work in Process $\begin{array} { | l | l | l | l | l | l | } \hline \text { Date } & \text { Explanation } & \text { FR } & \text { Debit } & \text { Credit } & \text { Balance } \\\hline \text { Dec. 1 } & & & & & 73,800 \\\hline \text { Dec. } & \text { Direct Materials } & \text { G-20 } & 235,800 & & 309,600 \\\hline \text { Dec. } & \text { Direct Labor } & \text { G-20 } & 117,000 & & 426,600 \\\hline \text { Dec. } & \text { Factory Overhead } & \text { G-20 } & 187,200 & & 613,800 \\\hline \text { Dec. } & \text { Job No. 5 completed } & \text { G-8 } & & 90,900 & 522,900 \\\hline \text { Dec. } & \text { Job No. 6 completed } & \text { G-10 } & & 131,40 & 391,500 \\& & & & 0 & \\\hline \text { Dec. } & \text { Job No. 7 completed } & \text { G-12 } & & 73,800 & 317,700 \\\hline \text { Dec. 31 } & \text { Job No. 8 completed } & \text { G-15 } & & 168,300 & 149,400 \\& & & & & \\ \hline & & & & &\end{array}$ Fill in the blanks for the following: (1) The total cost of the direct materials, direct labor, and factory overhead applied in the December 31 Work in Process inventory is $________. (2) The company's overhead application rate is ________% (3) Job No. 6 had $26,550 of direct labor cost. Therefore, the job must have had $________ of direct materials cost. (4) Job No. 8 had $73,998 of direct materials cost. Therefore, the job must have had $________ of factory overhead cost.

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

The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company's overhead application rate is:

Lock Production Co. applies factory overhead to production on the basis of direct labor costs. Assume that at the beginning of the current year the company estimated that direct material costs would be $178,800, direct labor costs would be $154,000, and factory overhead costs would be $231,000. (1) If the $28,000 cost of Lock's Work in Process inventory included $5,200 of direct labor cost, what amount of direct materials cost was included? (2) If $8,100 of the company's $34,300 finished goods inventory was direct materials cost, determine the direct labor cost and factory overhead cost of the finished goods inventory.

Cost accounting information is helpful to management for pricing decisions but has no effect on controlling costs.

Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Materials are assigned to each job according to actual cost. - If Job M-47 used $350 of materials and took 20 hours of labor to complete, what is the total cost that should be assigned to the job?

A company's predetermined overhead rate is applied at 130% of direct labor cost. How much overhead would be allocated to Job No. 105 if it required total direct labor costs of $60,000?

A_______________ is calculated by relating total estimated factory overhead to an allocation factor such as total estimated direct labor cost, and is used to allocate factory overhead to specific jobs.

A type of production that yields customized products or services for each customer is called:

A company's file of job cost sheets for jobs that are not yet completed equals the balance in the Finished Goods Inventory account.

If overhead applied is less than actual overhead incurred, it is:

Mesa Corp. allocates overhead to production on the basis of direct labor costs. Mesa's total estimated overhead is $450,000 and estimated direct labor is $180,000. Determine the amount of overhead applied to a job which used $20,000 of direct labor.