Exam 20: Job Order Costing

Cost of raw materials is debited to Raw Materials Inventory when the

Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June. June 1 Purchased raw materials for $20,000 on account. 8 Raw materials requisitioned by production: 15 Paid factory utilities, $2,100 and repairs for factory equipment, $3,000. 25 Incurred $84,000 of factory labor. 25 Time tickets indicated the following: 25 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked. 28 Goods costing $18,000 were completed in the factory and were transferred to finished goods. 30 Goods costing $15,000 were sold for $20,000 on account.

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

Which one of the following should be equal to the balance of the Work In Process Inventory account at the end of the period?

Haight Company incurred direct materials costs of $1,000,000 during the year. Manu-facturing overhead applied was $180,000 and is applied at the rate of 60% of direct labor costs. Haight Company's total manufacturing costs for the year was

A process cost accounting system is appropriate for similar products that are continuously mass produced.

The manufacturing operations of Beatly, Inc. had the following balances for the month of January: Beatly transferred $220,000 of completed goods out of work in process during January. Instructions Compute the cost of goods sold for January.

Cost of goods sold is obtained from

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

During the first year of operations, Shapiro Tool accumulated the following manufacturing costs: Instructions Prepare separate journal entries for each manufacturing cost.

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

The job cost sheet does not show

At the end of the year, underapplied overhead is usually credited to Cost of Goods Sold.

The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31, 2010: In addition, the following transactions occurred in 2010: 1. Raw materials purchased on account, $75,000. 2. Incurred factory labor, $90,000, all is direct labor. (Credit Factory Wages Payable). 3. Incurred the following overhead costs during the year: Utilities $6,800, Depreciation on manufacturing machinery $8,000, Manufacturing machinery repairs $9,200, Factory insurance $9,000 (Credit Accounts Payable and Accumulated Depreciation). 4. Assigned $90,000 of factory labor to jobs. 5. Applied $36,000 of overhead to jobs. Instructions (a) Journalize the above transactions. (b) Reproduce the manufacturing cost and inventory accounts. Use T-accounts. (c) From an analysis of the accounts, compute the following: 1. Raw materials used. 2. Completed jobs transferred to finished goods. 3. Cost of goods sold. 4. Under- or overapplied overhead.

The predetermined overhead rate is based on the relationship between

Grant Marwick and Associates, a C. P. A. firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November. Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $60 per auditor hour. The Rondelli job is the only incomplete job at the end of November. Actual overhead for the month was $12,800 Instructions (a) Determine the cost of each job. (b) Indicate the balance of the Work in Process account at the end of November. (c) Calculate the ending balance of the Manufacturing Overhead account for November.

As of December 31, 2010, Nilsen Industries had $2,000 of raw materials inventory. At the beginning of 2010, there was $1,600 of materials on hand. During the year, the company purchased $274,000 of materials; however it paid for only $264,000. How much inventory was requisitioned for use on jobs during 2010?

Cost accounting involves the measuring, recording, and reporting of ______________ costs.

A job order cost system and a process cost system are two alternative methods for valuing inventories.

In a job order cost system, each entry to the Work In Process Inventory account should be accompanied by a posting to one or more job cost sheets.