Exam 5: Job-Order Costing

A company has two departments that all goods pass through,machining and assembly.Machining overhead is applied based on machine hours and assembly overhead is applied based on direct labor hours.Data on each department is as follows:

Which of the following can serve as a subsidiary ledger for the finished goods inventory?

Figure 5-3. Mitchell's Softball Gloves Company estimated the following at the beginning of the year: Mitchell uses departmental overhead rates.In the assembly department,direct labor hours are used to apply overhead.Machine hours are used to apply overhead in the testing department. Actual data for August is as follows: Refer to Figure 5-3.Using departmental overhead rates,which of the following is correct?

Figure 5-5. Brillant Design Company makes custom chairs for individual customers.On October 1,there was one job in process,Job 243,with a cost of $1,300.Jobs 244,245,and 246 were started during the month of October.Data on costs added during the month are as follows: Overhead is applied to production at the rate of 70% of direct labor cost.Job 245 was completed on October 14 and the client was billed at cost plus 55%.All other jobs remained in process. Refer to Figure 5-5.Calculate the balance in Work-in-Process on October 31.

Figure 5-1. Morrow Company applies overhead based on direct labor hours.At the beginning of the year,Morrow estimates overhead to be $620,000,machine hours to be 180,000,and direct labor hours to be 40,000.During February,Morrow has 4,200 direct labor hours and 8,000 machine hours. Refer to Figure 5-1.What is the amount of overhead applied for February?

________________________ are directly responsible for creating the products or services sold to customers.

When units are sold,their total cost is debited to _______________ and credited to ____________.

The use of normal costing means that actual overhead costs are assigned directly to jobs.

Figure 5-3. Mitchell's Softball Gloves Company estimated the following at the beginning of the year: Mitchell uses departmental overhead rates.In the assembly department,direct labor hours are used to apply overhead.Machine hours are used to apply overhead in the testing department. Actual data for August is as follows: Refer to Figure 5-3.If Mitchell uses a plantwide overhead rate based on direct labor hours,instead of departmental rates,what is the predetermined overhead rate rounded to the nearest cent?

Which method of measuring costs associated with production is more widely used in practice?

Figure 5-5. Brillant Design Company makes custom chairs for individual customers.On October 1,there was one job in process,Job 243,with a cost of $1,300.Jobs 244,245,and 246 were started during the month of October.Data on costs added during the month are as follows: Overhead is applied to production at the rate of 70% of direct labor cost.Job 245 was completed on October 14 and the client was billed at cost plus 55%.All other jobs remained in process. Refer to Figure 5-5.If selling and administrative expense for the month of October equaled $ 2,000,what is operating income for the month of October?

Which of the following are easy to trace to individual jobs?

Figure 5-4. Hill Company uses job-order costing.At the end of the month,the following data was gathered: Hill's selling price is cost plus 50% for each of its products. Refer to Figure 5-4.What is Cost of Goods Sold for the month?

Strict ______________________ are rarely used because they cannot provide accurate unit cost information on a timely basis.

When materials are put into production,they are taken from the Raw Materials account and put into the Work in Process account.

Figure 5-12. Walter Company uses a job-order costing system to account for product costs.The following information pertains to the current year: Plantwide overhead rate is $18 per direct labor hour. Refer to Figure 5-12.What is the total amount debited to Finished Goods Inventory in the current year?

In job-order costing,the journal entry for a completed job costing $7,000 but not sold is:

Figure 5-1. Morrow Company applies overhead based on direct labor hours.At the beginning of the year,Morrow estimates overhead to be $620,000,machine hours to be 180,000,and direct labor hours to be 40,000.During February,Morrow has 4,200 direct labor hours and 8,000 machine hours. Refer to Figure 5-1.What is the predetermined overhead rate?

A _____________________ is a single overhead rate calculated by using all estimated overhead for a factory divided by the estimated activity level across the entire factory.

Which of the following statements is true?