Exam 20: Job Order Costing

Klinger Company estimates that annual manufacturing overhead costs will be $3,600,000 for 2010. The actual overhead costs at the end of 2010 are $3,740,000. Activity base information for 2010 follows: Instructions (a) Compute the predetermined overhead rate for each activity base. (b) Compute the amount of overhead applied in 2010 for each activity base. (c) Compute the amount of under- or overapplied overhead for 2010 for each activity base.

During 2010, Arb Company incurred the following direct labor costs: January $15,000 and February $30,000. Arb uses a predetermined overhead rate of 120% of direct labor cost. Estimated overhead for the 2 months, respectively, totaled $19,500 and $35,700. Actual overhead for the 2 months, respectively, totaled $18,400 and $32,500. Instructions Determine if overhead is over- or underapplied for each of the two months and the respective amounts.

At the end of the year, the accountant credits the amount of the overapplied overhead to Cost of Goods Sold.

Which of the following is not a control account?

A process cost system would most likely be used by a company that makes

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

When raw materials are purchased, the Work in Process Inventory account is debited.

A selected list of accounts used by Cline Manufacturing Company follows: Cline Manufacturing Company uses a job order system and maintains perpetual inventory records. Instructions Place the appropriate code letter in the columns indicating the appropriate account(s) to be debited and credited for the transactions listed below. -------------------------------------------

Job order cost sheets constitute the subsidiary ledger of the control account Work In Process Inventory.

Debits to Work in Process Inventory are accompanied by a credit to all but which one of the following accounts?

The Purchases account is credited for all raw materials purchase returns and allowances.

Simpson Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $90,000 of direct materials costs and $120,000 of manufacturing overhead. The total manufacturing costs for Job No. 305 is:

If Manufacturing Overhead has a debit balance at the end of the period, then

When determining costs of jobs, how does a company account for indirect materials?

If actual manufacturing overhead was greater than the amount of manufacturing overhead applied to jobs, the Manufacturing Overhead account will have a ___________ balance and overhead is said to be ______________.

The gross earnings of factory workers for Dinkel Company during the month of January are $300,000. The employer's payroll taxes for the factory payroll are $36,000. 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.

A company expected its annual overhead costs to be $900,000 and direct labor costs to be $1,000,000. Actual overhead was $870,000, and actual labor costs totaled $1,100,000. How much is the company's predetermined overhead rate to the nearest cent?

Requisitions for direct materials are posted daily to the individual job cost sheets.

Barr Mfg. provided the following information from its accounting records for 2010: How much is the overhead application rate if Barr bases the rate on direct labor hours?

Posting to control accounts in a costing system are made