Exam 4: Job Costing

Under the proration approach, the sum of the amounts shown in the subsidiary ledgers will not match the amounts shown in the general ledger because no adjustments from budgeted to actual manufacturing overhead rates are made in the individual job-cost records.

In a normal costing system, the Manufacturing Overhead Control account ________.

Explain how the following statement be true: Often the manufacturing overhead control account (debit) does not equal the manufacturing overhead allocated account (credit).

For 2018, Franklin Manufacturing uses machine-hours as the only overhead cost-allocation base. The estimated manufacturing overhead costs are $300,000 and estimated machine hours are 50,000. The actual manufacturing overhead costs are $420,000 and actual machine hours are 60,000. Using job costing, the 2018 budgeted manufacturing overhead rate is ________. (Round the final answer to the nearest cent.)

What is the difference between an actual cost system and a normal cost system?

Actual (rather than allocated) manufacturing overhead costs are first recorded in the ________.

The method that restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates is called ________.

ABC Manufacturing Inc. ends the month with two jobs still in progress. Job 5 has $10,000 of materials, $2,000 of direct labor and $8,000 of manufacturing overhead allocated. Job 6 was $30,000 of materials, $2,000 of direct labor and $10,000 of manufacturing overhead allocated. The cost of goods sold for the month was $40,000 and of that 30% was overhead. There were no finished goods in stock as the month ends. If the manufacturing overhead is underallocated by $10,000, which of the following choices would be the correct way to prorate it, assuming the proration is based on the allocated overhead in the ending balances of work-in-process, finished goods, and cost of goods sold?

Which of the following statements about actual costing is true?

The difference between actual costing and normal costing is ________.

Franklin Inc. manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2018: For June 2018, manufacturing overhead is ________.

For externally reported inventory costs, the Work-in-Process Control account is increased (debited) by ________.

The adjusted-allocation rate approach offers the benefit of a costing system that provides overhead cost data during the year so that pricing, budgeting, and interim reporting can occur and a year-end adjustment to manufacturing overhead allocations to individual jobs that are better aligned with actual manufacturing overhead costs that are known at year-end.

Managers and accountants collect most of the cost information that goes into their systems through ________.

Schulz Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $266,400 and budgeted machine-hours were 18,500. Actual factory overhead was $287,920 and actual machine-hours were 19,050. Before disposition of under/overapplied overhead, the cost of goods sold was $560,000 and ending inventories were as follows: Required: a.Determine the budgeted factory overhead rate per machine-hour. b.Compute the over/underapplied overhead. c.Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach. d.Prepare the journal entry to dispose of the variance using the proration approach.

The Materials Control account is increased when ________.

Process costing ________.

Which of the following are reasons for using longer periods, such as a year, to calculate indirect cost rates?

Place the following steps in the order suggested by the seven steps used to assign costs to individual jobs: A.Identify indirect costs B.Compute the total cost of the job C.Select cost-allocation bases D.Compute the indirect cost rate

In a job-costing system, a manufacturing firm typically uses an indirect-cost rate to estimate the ________ allocated to a job.