Exam 26: Manufacturing Accounting: The Job Order Cost System

It is estimated that during the coming year, factory overhead costs will be $675,000 and direct labor costs will be $750,000. The predetermined overhead rate as a percentage of direct labor costs for that year would be

The earnings of workers whose services are considered to be direct labor must be charged to the proper factory overhead accounts.

Wages paid to those employees who devote their time to converting the materials into finished goods are called

The wages and salaries paid to the factory supervisor and janitors are charged to direct labor.

The vacation pay of factory workers may be charged to

The following information is supplied for Chang Manufacturing Company. Work in process, January 1,20-- \ 23,725 Material s inventory, January 1,20-- 11,800 Materials purchases 12,700 Materials inventory, December 31, 20-- 10,900 Direct labor 15,400 Factory overhead 6,700 Work in process, December 31, 20-- 19,500 ​ Required: Prepare a schedule of cost of goods manufactured for the year ended December 31, 20--.

The cost of goods sold section of the manufacturer's income statement is commonly supplemented by a schedule of cost of goods manufactured.

The following information pertains to Ortega Corporation for the year ended December 31, 20--. Sales \ 978,000 Purchases of materials 176,000 Indirect lab or 42,000 Indirect materials 12,000 Depreciation of factory equipment 5,300 Depreciation of factory building 18,000 Selling expenses 44,000 Other factory overhead expenses 48,000 Direct labor 392,000 Materials inventory, December 31,20-- 36,000 Work in process, January 1,20-- 72,000 Materials inventory, January 1,20-- 24,000 Work in process, December 31,20-- 98,000 Finished goods inventory, January 1,20-- 112,000 Finished goods inventory, December 31,20-- 116,000 Required: Prepare a statement of cost of goods manufactured.

Match the terms with the definitions. -The rate used to apply overhead based on production activity (direct labor hours, direct labor costs, or machine hours) used because of the difficulties of relating specific costs to specific jobs.

Products that have been completed and are ready for sale at the end of the accounting period are known as

One inventory account is needed in a manufacturing business.

The entry to recognize the completion and transfer of a job so that it can be placed in stock would include

Rozlyn Corporation makes children's toys. It applies overhead at the rate of 110% of direct labor costs. During the year, the labor costs were $130,000. The actual overhead was $142,000. Make the appropriate general journal entry dated December 31, 20--, to adjust the factory overhead account balance (under- or overapplied) for the year.

The following information pertains to Skylark Manufacturing Corporation for the year ended December 31, 20--. Sales \ 244,500 Purchases of materials 44,000 Indirect lab or 8,300 Indirect materials 3,000 Depreciation of factory equipment 3,700 Depreciation of factory building 4,500 Selling expenses 11,000 Other factory overhead expenses 12,000 Direct labor 89,000 Materials inventory, December 31,20-- 9,000 Work in process, January 1, 20-- 18,000 Materials inventory, January 1, 20-- 6,000 Work in process, December 31, 20-- 22,500 Finished goods, January 1, 20-- 29,000 Finished goods, December 31, 20-- 22,000 Required: Complete the statement of cost of goods manufactured.

Direct labor includes the wages of employees who are directly involved in converting materials into finished goods.

Process cost accounting is useful for costing homogeneous products such as base models of automobiles.

The entry to record other factory overhead costs incurred during the month would include

Match the terms with the definitions. -The system that provides a separate record of the cost of each individual product or group of products that is produced.

If a product is made to customers' orders or specifications or if products are made in separately identifiable "lots" or "batches," the appropriate cost accounting system is a

Materials used in the manufacturing process that do not become a significant part of the finished products are called