Exam 20: Job Order Costing

Gallagher Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $425000 for the year and machine usage is estimated at 125000 hours. For the year $450000 of overhead costs are incurred and 130000 hours are used. Instructions (a) Compute the manufacturing overhead rate for the year. (b) What is the amount of under - or overapplied overhead at December 31? (c) Assuming the under - or overapplied overhead for the year is not allocated to inventory accounts prepare the adjusting entry to assign the amount to cost of goods sold

Accumulating and assigning manufacturing costs are two important activities in a job order cost system.

The principal accounting record used in assigning costs to jobs is

Raw Materials Inventory Factory Labor and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used.

All of the following would be entries in assigning accumulated costs to the Work In Process Inventory except:

When the company assigns factory labor costs to jobs the direct labor cost is debited to

As of December 31 2017 Stand Still Industries had $2500 of raw materials inventory. At the beginning of 2017 there was $2000 of materials on hand. During the year the company purchased $375000 of materials; however it paid for only $312500. How much inventory was requisitioned for use on jobs during 2017?

Lando Company reported the following amounts for 2017: Instructions Calculate (a) the cost of materials used in production and (b) total manufacturing costs.

Which of the following is not viewed as part of assigning manufacturing costs in a job order cost system?

The cost of producing a particular job under a job cost system is accumulated on a record called a ___________________.

In a job order cost system it would be correct in recording the purchase of raw materials to debit

Jensen Manufacturing Company makes specialty tools. In January Jensen incurs manufacturing costs of $13000000 for direct materials direct labor and overhead. 20% of the total costs represents overhead applied. The overhead rate is $1 for every $2 of direct labor costs incurred. Inventory balances were: Raw materials \ 300,000 \ 500,000 Work in process 600,000 400,000 Finished goods 400,000 200,000 At the end of January there was $1000 of overapplied overhead. Instructions (a) Determine the cost of raw materials purchased in January. (b) Prepare a cost of goods manufactured schedule for January 2017. (c) Compute the cost of goods sold for January.

A company may use either a job order cost system or a process cost system but not both.

The perpetual inventory method cannot be used in a job order cost system.

Recording the acquisition of raw materials is a part of accumulating manufacturing costs.

Cost of goods sold is obtained from

The gross earnings of factory workers for Dinkel Company during the month of January are $400000. The employer's payroll taxes for the factory payroll are $80000. Of the total accumulated cost of factory labor 75% is related to direct labor and 25% is attributable to indirect labor. Instructions (a) Prepare the entry to record the factory labor costs for the month of January. (b) Prepare the entry to assign factory labor to production. (c) Prepare the entry to assign manufacturing overhead to production assuming the predetermined overhead rate is 125% of direct labor cost.

Records of individual items of raw materials would not be maintained

Haight Company incurred direct materials costs of $2500000 during the year. Manu-facturing overhead applied was $450000 and is applied at the rate of 60% of direct labor costs. Haight Company's total manufacturing costs for the year was

Minton Company provided the following information from its accounting records for 2017: Expected production 60,000 labor hours Actual production 56,000 labor hours Budgeted overhead \ 1,800,000 Actual overhead \ 1,740,000 How much is the overhead application rate if Minton Company bases it on direct labor hours?