Exam 5: Job Costing

The total cost of Job No. 175 was $1,200. Direct materials amounted to $30. Overhead is allocated at the rate of 30% of direct labour cost. The direct labour cost on this job was:

Rayfield Company's management accountant collected the following inventory and transaction data for the month: Inventories Ending Beginning Direct materials \ 220 \ 190 Work in process 160 140 Finished goods 190 220 The cost of goods available for sale was $1,370. Total manufacturing costs assigned to work in process during the month was $1,170. Manufacturing overhead was $334; and direct materials used were $386. Direct materials purchased during the month were:

Assume there is $2,000 of overapplied fixed overhead, which is to be prorated. Current balances of selected accounts are: Work in process \ 15,000 Finished goods 25,000 Cost of goods sold 60,000 The adjusting journal entry is: a) Overapplied fixed overhead $\quad$$\quad$ 2,000 Work in process 300 Finished goods 500 Cost of goods sold 1,200 b) Work in process 300 Finished goods 500 Cost of goods sold 1,200 Overapplied fixed overhead 2,000 c) Fixed overhead control 2,000 Work in process 300 Finished goods 500 Cost of goods sold 1,200 d) Work in process 300 Finished goods 500 Cost of goods sold 1,200 Fixed overhead allocated 2,000

Spoilage is typically identified as part of the overhead allocation process.

Accounting practices are likely to influence manager behaviour:

Job costing information can be used to: I. Report inventory and cost of goods sold on financial statements II. Estimate average costs for future jobs III. Report the costs of marketing for a product

Raw Material 9/1 12,000 Work in Process Inventory 9/1 4,500 Work in Process Inventory 9/1 4,500 Overhead Cost Control 14,800 Accounts Payable 8,000 9/30 • The overhead is allocated to jobs using an estimated rate applied to direct labour hours. The budget for the year called for $180,000 of overhead cost and 60,000 direct labour hours. • Accounts payable is used for materials only. The balance on 9/1 was $6,000. September's payments were $40,000. • September 1 finished goods inventory was $11,000. • Cost of jobs completed in September was $89,000. • On September 30 there was a single job unfinished, consisting of $1,800 (300 hours) of direct labour and $2,600 of direct material. • 5,200 direct hours were worked during September. All workers earn the same rate of pay. • All actual overhead costs incurred have been recorded. Cost of goods sold during September was:

Opportunity costs of spoilage should be:

Which of the following statements regarding the uses and limitations of job costing is true?

In a job costing system, costs are very accurate because jobs are customized.

In a normal costing system, the overhead allocation rate is calculated as

Abnormal spoilage is accounted for by:

Scrap can be sold, discarded, or used in other creative ways.