Exam 5: Job-Order Costing

Williams Incorporated estimated overhead to be $440,000 and direct labor hours to be 100,000 for the year.Actual direct labor ended up being 120,000 hours.Actual overhead for the year amounted to $500,000.

At the beginning of the year Grey Corporation estimated the following: Grey uses departmental overhead rates.In the assembly department ,overhead is applied on direct labor hours.In the packaging department,overhead is applied on the basis of machine hours.Actual data for the month of April are as follows: Required: A.)Calculate the predetermined overhead rate for the assembly and packaging departments. B.)Calculate the overhead applied to production in each department for the month of April. C.)Calculate how much each department's overhead is overapplied/underapplied.

Figure 5-10. The King Corporation manufactures custom-made furniture.The following data pertains to Job X4A: Plantwide overhead rate is $22.50 per machine hour. Refer to Figure 5-10.One-half of Job X4A was sold for $10,000.What is the total amount of costs assigned to Job X4A?

Bryant Company designs and builds fancy dining room tables for individual customers.On July 1,there were two jobs in process: Job 391 with a beginning balance of $21,700 and Job 392 with a beginning balance of $8,790.Overhead costs are applied by using a rate of 70% of direct labor costs.Both jobs are unfinished on July 31.Data on July costs for both jobs are as follows: What is the total of the work-in-process account at July 31?

Which of the following is true about the job-order cost sheet?

__________________________ is a costing system that accumulates production costs by process or by department for a given period of time.

Pribil Farm Equipment is a job-order costing manufacturer that uses a plantwide overhead rate based on direct labor hours.Estimations for the year include $420,000 in overhead and 30,000 direct labor hours.Pribil worked on five jobs in March.Data are as follows: By March 31,Jobs 89 and 91 were completed and sold.The rest of the jobs remained in process.

Figure 5-11. Olson Corporation constructs new homes.Assume that Olson uses a job costing system.During May of the current year,the following transactions occurred: Olson purchased $4,500 of lumber on account. Olson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour. Depreciation of $1,500 on equipment used to build new houses was recorded. A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash. Refer to Figure 5-11.The journal entry to record labor for Olson would include a

Production costs do not include:

Using normal costing,which of the following is false about actual overhead?

Which of the following is the assignment process used with normal costing?

Budgeted overhead is $60,000,budgeted direct labor hours are 3,000,actual overhead is $64,000,and direct labor hours are 3,230.Unadjusted cost of goods sold is $135,670. Predetermined overhead rate = $60,000/3,000 = $20 per direct labor hour. Applied overhead = $20 ´ 3,230 = $64,600

You Decide You are the senior cost accountant at Adventure Industries and you have been asked to explain to the new staff accountant how the company keeps track of job costs through source documents.Also you need to inform the staff accountant how these source documents are important in determining inventory,expense and revenue amounts at the end of the period.

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.Mitchell decides to continue using departmental overhead rates.If a job spends 4 hours in assembly and 3 hours in testing,what is the amount of overhead charged to the job?

The document that lists the total cost for a single job is a

When a job costing $5,000 is completed,the following journal entry is made:

At the beginning of the year,Wilson Company estimated the following: Wilson used normal costing and applies overhead on the basis of direct labor hours.For the month of September,direct labor hours equaled 9,350 and actual overhead equaled $46,750. Calculate the overhead applied to production in September.

Figure 5-6. Stutz,Inc.designs and builds basketball gymnasiums.Each gymnasium is custom-built to individual customers' specifications.Stutz uses job-order costing to keep track of its costs.In February it worked on three jobs.Data for these jobs are as follows: Overhead is applied to jobs at the rate of $25 per machine hour.By February 28,Job 178 is the only one unfinished.The balance of Finished Goods on February 1 is $94,000 (consisting of Job 177).Jobs 177 and 179 are sold during February.Stutz sells its product at cost plus 40%. Refer to Figure 5-6.Calculate the balance of Finished Goods at February 28.

McElligott Doll Company had the following overhead costs and production for two months.The dolls are identical to each other.

Which of the following is not true about job-order costing?