Exam 16: Job Order Costing

Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is

As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.

The document authorizing the issuance of materials from the storeroom is a

Cavy Company estimates that total factory overhead costs will be $660,000 for the year. Direct labor hours are estimated to be 100,000.​ a. Compute the predetermined factory overhead rate. b. Determine the amount of factory overhead applied to Job 345 if the amount of direct labor hours is 560 and to Job 777 if the amount of direct labor hours is 800. c. Journalize the entry to record the factory overhead applied if Jobs 345 and 777 are the only jobs for the period.

A process cost accounting system provides product costs for each of the departments or processes within the factory.

The basis for the journal entry recording direct labor for the period is a summary of the

Match each of the following costs with the appropriate classification (a-e).​ -Carrying cases for a manufacturer of video camcorders A)Product cost - direct materials B)Product cost - direct labor C)Product cost - factory overhead D)Period cost - selling expense E)Period cost - administrative expense

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

A difference in quantity of materials used on two comparable jobs may be caused by

Job cost sheets can provide information to managers on unit cost trends, the cost impact of continuous improvement in the manufacturing process, the cost impact of materials changes, and the cost impact of direct materials price or direct labor rate changes over time.

Which of the following is the formula to compute the predetermined factory overhead rate?

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The journal entry to record the transfer of costs from finished goods to cost of goods sold is

A service organization will not use the job order costing method because it has no direct materials.

Journalizing the entry to record a job completed would include a credit to

Job order cost accounting systems can be used only for companies that manufacture a product.

Job order cost systems can be used to compare unit costs of similar jobs to determine if costs are staying within expected ranges.

Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. -What is the ending balance of Cost of Goods Sold for Adams Company at the end of the first quarter?

A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

Using the job order cost system, service organizations are able to bill customers on a weekly or monthly basis, even when the job has not been completed.