Exam 13: Job-Costing

Sooners Company had the following information: Budgeted factory overhead \ 78,000 Actual factory overhead \ 75,000 Budgeted: Production setups 12,000 Actual: Production setups 11,500 The budgeted factory- overhead rate using production setups as the cost driver is:

Jayhawks Company had the following information: Budgeted factory overhead \ 80,000 Actual factory overhead \ 82,000 Budgeted: Machine hours 40,000 Actual: Machinehours 39,500 The overhead applied for a company that uses 10,000 machine hours is:

The following information was gathered for Boilermakers Company: Budgeted direct-labor hours 7,750 Actual direct-lab or hours 8,100 Budgeted factory overhead \ 220,575 Actual factory overhead \ 224,970 Assume the cost driver is direct- labor hours. The amount of factory overhead applied is:

The costing method which is required for external reporting

The cost driver chosen for applying factory overhead costs should be the cost driver that:

The amount of fixed manufacturing overhead applied to each unit of production. It is determined by dividing the budgeted fixed overhead by the expected volume of production for the budget period.

The following information was gathered for Badgers Company: Budgeted dir ect-labor hours 31,000 Actual dir ect- lab or hours 32,400 Budgeted factory overhead \ 147,250 Actual factory overhead \ 149,980 Assume the cost driver is direct- labor hours. The amount of over/underapplied overhead is:

Normally, 80% of the cost drivers drive 50% of the overhead costs.

A company has the following information for the current month of operations: Raw materials used \ 37,500 Sales ( \ 97.50 per unit) \ 117,000 Direct labor \ 63,000 Variable factory overhead \ 25,500 Fixed factory overhead unknown Variable selling and administrative \ 4,500 Fixed selling and adminis trative \ 7,500 Gross profit \ 45,000 Contribution margin unknown Inventories: Beginning Ending Raw materials 0 \ 10,500 WIP 0 none Finished goods 0 1,200 units were produced during the period.

When the amount of overhead applied to the product exceeds the amount incurred by the department, the difference is called overapplied overhead.

The budgeted total overhead divided by the budgeted cost- driver activity

Accountants use actual overhead rates to apply overhead to jobs as they are completed.

Sinister Snake Oil Company produces and sells a single product. Reported operating income for the first three years of operations under absorption and variable costing are reported below. Variable Costing Absorption Costing Year 1 \ 50,000 \ 40,000 Year 2 \ 60,000 \ 60,000 Year 3 \ 70,000 \ 80,000 Standard production costs per unit, sales prices, absorption rates, and expected volume levels were the same each year. There were no underapplied or overapplied overhead costs and no variances in any year. Required: a. In what year did units produced equal units sold? b. In what year did units produced exceed units sold? c. What is the dollar amount of the ending inventory in Year 3 if absorption costing is used? d. What is the difference between "units produced" and "units sold" in Year 3 if the absorption costing fixed- manufacturing overhead application rate is $2 per unit?

The variable- costing income statement separates costs into manufacturing and nonmanufacturing categories.

is the most important contributor to the variances between actual and applied overhead.

The excess of overhead applied to products over actual overhead incurred

A company has the following information for its first month of operations: Raw materials used \ 25,000 Sales ( \6 5 per unit) \ 78,000 Directlabor \ 42,000 Variable factory overhead \1 7,000 Fixed factory overheadunknown Variable sellingand administrative \3 ,000 Fixed sellingand administrative \5 ,000 Gross profit \3 0,000 Contributionmargin unknown Ending inventories: Raw materials $\$ 7,000$ WIP none Finishedgoods $\quad$$\quad$ 1,200 units The cost of goods sold under variable costing is:

A company has the following information for its first month of operations: Raw materials used \ 25,000 Sales ( \6 5 per unit) \ 78,000 Directlabor \ 42,000 Variable factory overhead \1 7,000 Fixed factory overhead unknown Variable sellingand administrative \3 ,000 Fixed sellingand administrative \5 ,000 Gross profit \3 0,000 Contributionmargin unknown Ending inventories: Raw materials $\quad$$\$ 7,000$ WIP none Finishedgoods $\quad$$\quad$$\quad$ 1,200units Raw materials purchased during the current period are:

The most common contributor to a variance between actual overhead and applied overhead is by operating at a different level of volume than the level used as a denominator in calculating the budgeted overhead rate.

is (are) computed for variable overhead.