Exam 4: Job Costing

Financial Planning Partners Inc., employs 12 full-time CPAs and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 2018: When using a normal costing system, year-end accounting records will show that indirect costs are ________.

The accounting firm firm of Smith & Jones LLC has a staff of 34 staff accountants and auditors and administrative staff. Budgeted total costs of the firm total $5,000,000 of which $2,900,000 is direct-labor costs. Assuming that the remaining costs are indirect and direct-labor cost is the allocation base, calculate the budgeted indirect cost rate.

Which account is credited if direct materials of $28,000 and indirect materials of $7,000 are sent to the manufacturing plant floor?

Process costing is ________.

Lancelot Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Case High School band jacket job. For Lancelot Manufacturing, what is the annual manufacturing overhead cost-allocation rate?

Smith and Jones CPA firm employs 12 accountants and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 2018: What are the actual direct-cost rate and the actual indirect-cost rate, respectively, per professional labor-hour?

Lancelot Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Case High School band jacket job. What amount of manufacturing overhead costs will be allocated to this job?

A materials-requisition record is an example of a source document.

Cowley County Hospital uses a job-costing system for all patients who have surgery. In March, the pre-operating room (PRE-OP) and operating room (OR) had budgeted allocation bases of 4,000 nursing hours and 2,000 nursing hours, respectively. The budgeted nursing overhead charges for each department for the month were $168,000 and $132,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $1,200,000 and 15,000 nursing hours for the month. For patient Fred Adams, actual hours incurred were eight and four hours, respectively, in the PRE-OP and OR rooms. He was in the hospital for 4 days (96 hours). Other costs related to Adams were: The hospital uses a budgeted overhead rate for applying overhead to patient stays. Required: What is the total cost of the stay of patient Fred Adams?

A manufacturer estimates that it will incur variable indirect costs for the month of October of $70,000 and $30,000 of fixed costs. The company uses direct labor hours to calculate the predetermined overhead rate and predicted that 3,000 direct labor hours would be used in October. Actual direct labor hours amounted to 3,200. Required: A) What is the variable predetermined indirect rate for October? B) What is the fixed predetermined indirect cost rate for October? C) What is the total allocation rate per direct labor hour for October?

Crandle Corp. applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of a necklace. Estimates for this order include: Direct materials of $40,000; 400 direct manufacturing labor-hours at $15 per hour; and a 50% markup rate on total manufacturing costs. Estimated total product costs for this special order equal ________.

An accounting firm completes an audit for a local union and has the following cost information for the year. Indirect labor $60,000 Office lease $22,000 Depreciation on office equipment $8,000 Marketing expense $20,000 Utilities $15,000 The firm's direct labor costs are budgeted at $500,000 for the year and overhead is allocated based on direct labor costs. The firm used 1 partner and 2 audit associates on the audit. Partners are paid $150 per hour while audit associates earn $50 per hour. The partner spent 6 hours on the engagement while the audit associates spent a total of 40 hours. Required: What is the cost of the audit?

All costs other than direct materials and direct manufacturing labor are classified as indirect costs.

A ________ is a grouping of individual indirect cost items.

The budgeted direct-labor cost rate includes ________.

________ is used to record and accumulate all the costs assigned to a specific job.

Which of the following is true of plant utility costs?

An example of a denominator reason for calculating annual indirect-cost rates includes ________.

Actual costing is a costing system that traces direct costs to a cost object by ________.

A manufacturer utilizes three separate indirect cost pools. Which of the following is true?