Exam 13: Job-Costing

The difference between applied and budgeted fixed overhead is the:

Rodman Company has the following ending account balances: Direct material s inventory \ 25,000 WIP inventory \ 24,500 Finished good inventory \ 54,500 Cost of goods sold \ 74,500 A dditional information is as follows: Cost of direct materials purch ased \ 41,000 Cost of direct materials requisitioned \ 47,000 Cost of goods completed \ 119,000 Factory overhead applied \ 48,000 (120\% of direct labor) Ignore any year- end adjustments for overhead and compute the beginning inventory balances of: a. direct materials inventory b. WIP inventory c. finished goods inventory

An absorption- costing income statement separates cost into the major categories of:

What is the best theoretical method of allocating underapplied or overapplied overhead, assuming that the objective is to obtain as accurate a cost application as possible?

Fixed factory overhead appears on the absorption- costing income statement:

Friends Company had the following data available: Beginning direct- materials inventory \ 26,000 Beginning WIP Inventory 64,000 Beginning finished goods inventory 58,000 Direct material s purchased on account 148,000 Direct material s requisitioned 82,000 Direct-lab or cost incurred 130,000 Factory overhe ad incurred 146,000 Cost of goods completed 292,000 Cost of goods sold 256,000 Overhead application rate 125\% (as a percent of direct- labor cost) The ending inventory of finished goods is:

To assign underapplied overhead or overapplied overhead in proportion to the sizes of the ending accounting balances

is not an alternative term for absorption costing.

The method that adjusts only the Cost of Goods Sold account for overapplied and underapplied overhead

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 The total contribution margin under variable costing is:

The excess of actual overhead over the overhead applied to products

The primary difference between variable and absorption costing is the accounting for:

Grant Company reported the following information about the production and sales of its only product during its first month of operations: Sales ( \ 225 per unit) \ 360,000 Direct materials used \ 176,000 Direct labor \ 100,000 Variable factory overhead \ 44,000 Fixed factory overhead \ 80,000 Variable selling and administrative \ 20,000 expenses Fixed s elling and administrative expenses \ 10,000 Endinginventories: Direct materials -0- WIP -0- Finished goods 400 units The contribution margin under variable costing is:

The following information was gathered for Wellington Company: Budgeted direct-labor hours Actual direct-labor hours Budgeted factory overhead \ 525,000 Actual factory overhead \ 538,000 Budgeted direct-labor hours 75,000 Actual direct- labor hours 77,500 Budgeted factory overhead \ 525,000 Actual factory overhead \ 538,000 Assume that direct- labor hours is the cost driver. Compute: a. Budgeted factory- overhead rate b. Factory overhead applied c. Amount of over/underapplied overhead

The difference between sales revenue and all variable costs

The excess of actual overhead over the overhead applied to products is called:

A company has the following information for the current month of operations: Raw materials used \ 37,500 Sales (\ 97.50 p er unit) \ 117,000 Direct labor \ 63,000 Variable factory overhead \ 25,500 Fixed factory overhead unknown Variable s elling and administrative \ 4,500 Fixed selling and adminis trative \ 7,500 Gross profit \ 45,000 Contribution margin unknown Inventories: Beginning Ending Raw materials 0 \ 10500 WIP 0 none Finished goods 0 1,200 units The ending inventory under variable costing is:

Any difference in variable- costing and absorption- costing operating income can be explained by multiplying the fixed- overhead product- costing rate by the change in the total units in the beginning and ending inventories.

In absorption costing, the fixed factory overhead is included:

The two key items in determining the budgeted factory- overhead rate are budgeted total overhead and: