Exam 5: Job-Order Costing

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 in Work-in-Process on February 28.

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.Job X4A consists of 500 units.One-half of Job X4A was sold for $10,000.What is the cost per unit for Job X4A?

Figure 5-9. Warwick Company has the following transactions for the month of September: Balances at the beginning of the month were: Refer to Figure 5-9.What is the ending balance of Finished Goods?

On April 9 of the current year,Job XX4 was completed.The job cost sheet showed a total of $4,000 in direct materials and $6,000 in direct labor at a rate of $20 per direct labor hour.Plantwide overhead is applied at $30 per direct labor hour.The debit to Finished Goods Inventory to record the completion of Job XX4 is

Figure 5-8. John's Water Slides makes custom water slides for hotels.On September 1,there were three jobs in process,Jobs 812,813,and 814.Two more jobs were started during September,Jobs 815 and 816.By September 30,Jobs 812,814,and 816 were finished.The following data has been collected: Overhead is applied at the rate of 120% of direct labor cost.Jobs are sold at cost plus 60%.Selling and administrative expenses for September totaled $2,950.By September 30,Jobs 812 were 816 are sold,but the customer who ordered Job 814 decided he did not want the slide so it is still in the warehouse. Refer to Figure 5-8.What is the selling price of Job 816?

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.What is sales revenue for February?

Applied overhead costs are charged to ________________.

Overhead costs are assigned to Finished Goods using a predetermined rate.

In an actual cost system,actual direct materials,actual direct labor and estimated overhead are used to determine unit cost.

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.If the actual overhead for February is $64,700,what is the overhead variance and is it overapplied or underapplied?

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Costs reported on the financial statements must be estimated costs.

Which of the following is not a characteristic of job-order costing?

Firms in the ____ business are most likely to use a process-costing system.

A(n)___________________________ determines unit cost by adding actual direct materials,actual direct labor,and estimated overhead.

If actual overhead for the year is $33,451 and applied overhead is $32,000,is the overhead variance overapplied or underapplied? Prepare the journal entry necessary to reconcile overhead.Assume the variance is immaterial. Actual overhead is more than applied overhead so the overhead variance of $1,451 is underapplied.The journal entry would be:

Bower Company manufactures a product in a factory that has two producing departments,Cutting and Stitching,and two support departments,D1 and D2.The activity driver for D1 is number of employees,and the activity driver for D2 is number of machine hours.The following data pertain to Bower: Required: A.Calculate the cost assignment ratios to be used under the direct method for departments D1 and D2. B.Allocate the support department costs to the producing departments by using the direct method.

The predetermined overhead rate is calculated by:

Reed Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year,the company estimated manufacturing overhead for the year would be $240,000 and machine hours would be 8,000. The following information pertains to December of the current year:

Feline Company uses a normal job-order costing system.Currently,a plantwide overhead rate based on direct labor is used.Lola Katz,the plant manager,has heard that departmental overhead rates can offer significantly better cost assignments than a plantwide rate can offer.Some jobs spend most of their time in Department A,while others spend most of their time in Department B.Feline has the following data for its two departments for the coming year: