Exam 19: Job Order Cost Accounting

Adams Manufacturing allocates overhead to production on the basis of direct labor costs.At the beginning of the year,Adams estimated total overhead of $396,000;materials of $410,000 and direct labor of $220,000.During the year Adams incurred $418,000 in materials costs,$413,200 in overhead costs and $224,000 in direct labor costs.Compute the overhead application rate.

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.

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 allocation of the factory payroll to production is:

A job order production system would be appropriate for a company that produces which one of the following items?

The rate established prior to the beginning of a period that uses estimated overhead and an allocation factor such as estimated direct labor,and that is used to assign overhead cost to jobs,is the:

A time ticket is a source document that an employee uses to report how much direct and indirect labor was performed for a job and is used to determine the amount of direct labor to charge to the job and the amount of indirect labor to charge to factory overhead.

The collection of cost sheets for unfinished jobs makes up a subsidiary ledger controlled by the Work in Process Inventory account in the general ledger.

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead rate exceeds the overhead incurred during a period.

A time ticket is a source document an employee uses to record the number of hours at work and that is used each pay period to determine the total labor cost.

Since a predetermined overhead rate is established before a period begins,this rate is revised many times during the period to compensate for inaccurate estimates previously made.

Andrew Industries purchased $165,000 of raw materials on account during the month of March.The beginning Raw Materials Inventory balance was $22,000,and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials.How should Andrews journalize the purchase of raw materials for March?

When factory payroll costs for labor are allocated in a job cost accounting system:

The job cost sheet for Job number 83-421 includes the following information: DIRECT MATERIALS: 7/12 Requisition R88-566: 20 units @ $3.50 per unit 7/13 Requisition R88-576: 18 units @ $5.00 per unit 7/13 Requisition R88-578: 4 units @ $25.00 per unit 7/14 Requisition R88-591: 40 units @ $1.25 per unit DIRECT LABOR: 7/12 Employee 19: 8 hours @ $9.00 per hour 7/13 Employee 19: 6 hours @ $9.00 per hour 7/13 Employee 37: 6 hours @ $7.00 per hour 7/14 Employee 19: 5 hours @ $9.00 per hour 7/14 Employee 92: 5 hours @ $11.00 per hour FACTORY OVERHEAD: Assigned at 150% of direct labor cost. What is the total cost of Job number 83-421?

Job order production systems would be appropriate for companies that produce custom homes,specialized equipment,and special computer systems.

Portside Watercraft uses a job order costing system.During one month Portside purchased $153,000 of raw materials on credit;issued materials to production of $164,000 of which $24,000 were indirect.Portside incurred a factory payroll of $95,000,paid in cash,of which $25,000 was indirect labor.Portside uses a predetermined overhead rate of 170% of direct labor cost.The journal entry to record the allocation of factory payroll to production is:

Overapplied or underapplied overhead should be removed from the Factory Overhead account at the end of each accounting period.

A job cost sheet is useful for developing financial accounting numbers but does not contain information that is useful for managing the production process.

Underapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead rate exceeds the overhead incurred during a period.

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 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:

Job A3B was ordered by a customer on September 25.During the month of September,Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor.The job was not finished by the end of the month,but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October.The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred.What is the total cost of the job when it is completed in October?