Exam 19: Job Order Cost Accounting

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.

The predetermined overhead rate based on direct labor cost is the ratio of estimated overhead cost to estimated direct labor cost for the period.

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 issuance of materials to production is:

When materials are used as indirect materials,their cost is debited to the Factory Overhead account.

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

Job order costing is applicable to manufacturing firms only and not service firms.

A ______________________ is a separate record maintained for each job.

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

Calwell Corp.uses a job order costing system.Four jobs were started during the current year.The following is a record of the costs incurred: Actual overhead costs were $55,800.The predetermined overhead rate is $2.40 per direct labor hour.During the year,Jobs 1010,1012,and 1013 were completed.Also,Jobs 1010 and 1013 were sold for $387,000.Assuming that this is Calwell's first year of operations: (a)Make the necessary journal entries to charge the costs to the jobs started and to record the completion and sale of finished jobs. (b)Calculate the balance in the Work in Process Inventory,Finished Goods Inventory,and Factory Overhead accounts.Does the Factory Overhead account balance indicate an over- or underapplied overhead?

Large aircraft producers such as the Boeing Company normally use:

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

A time ticket is a source document used by an employee to record the total number of hours worked and serves as a source document for entries to record labor costs.

Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August,of which $212,000 was direct and $73,000 was indirect supervisory costs.The correct journal entry to record the direct labor for the month 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.

The predetermined overhead rate is used to allocate overhead cost to jobs.

A job order costing system would best fit the needs of a company that makes:

In comparison to a general accounting system,a cost accounting system for a manufacturing company places an emphasis on:

The balance in the Work In Process Inventory at any point in time is equal to:

A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used.

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