Exam 4: Job Costing

Depending on the nature of rework being done on a particular unit, the cost can be charged to one of three specific accounts.Which of the following is correct?

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 114,000 and estimated factory overhead was $695,400. The following information was for September. Job X was completed during September, while Job Y was started but not finished. September 1, inventories: Materials \9 ,000 Work-in-process (All Job X) 37,400 Finished goods 80,400 Materials purchases \1 25,000 Direct materials requisitioned: Job X \5 4,500 Job Y 40,000 Direct labor hours: Job X 5,000 Job Y 4,500 Labor costs incurred: Direct labor ( \ 6.00 per hour) \5 7,000 Indirect labor 16,200 Factory supervisory salaries 7,200 Rental costs: Factory \8 ,400 Administrative offices 2,200 Total equipment depreciation costs: Factory \ 9,000 Administrative offices 1,900 Indirect materials used \ 14,400 The total factory overhead applied during September is:

Under job costing, factory overhead costs are assigned to products or services using labor or machine hours which are:

Which of the following methods accurately represents the process below? A customer orders twenty cases of nails, and the firm then produces the nails.

Factory overhead can be over-or under-applied because:

Which one of the following is used by the production department supervisor to request the materials for production?

With the increase in competition over the past several years and the need for additional accuracy in product costing, traditional cost accounting systems have become less common in product costing because

The journal entry to dispose of overapplied or underapplied overhead, if overhead is applied based on direct labor hours, would include a credit to:

Amy and Jay Golden have worked for five years in a firm specializing in restoration of historical buildings. Amy has focused on interior reconditioning and Jay on architectural and structural design. They have specialized in residential structures for the past two years, and are thinking of forming their own residential restoration firm. They plan to do all the structural and decorative design, and subcontract the actual construction and decorative work. One of their concerns is to have an accounting system in place when they begin their business. You have been asked to assist them by answering the following questions. Required: (1) Since we have a very basic service-type firm, can a simple accounting system be developed? (2) What kinds of information does the accounting system need to collect?

Maple Mount Fishery is a canning company in Astoria. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs. Budgeted factory overhead for the year was $680,400, and management budgeted $324,000 of direct labor costs. During the year, the company incurred the following actual costs. Direct materials used \ 384,000 Direct labor 306,000 Factory overhead 658,000 $\text { The January } 1 \text { balances of inventory accounts are shown below. }$ Materials-all direct \ 70,000 Work-in-process 41,000 Finished goods 26,000 The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year. The predetermined factory overhead rate is:

The journal entry required to record factory depreciation includes:

ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: Total materials (direct and indirect) purchased \ 90,000 Indirect materials issued to production 30,000 Total materials issued to production 110,000 Beginning materials inventory 50,000 The debit to the Factory Overhead account is:

A job in which a quantity of products is ordered by a single customer is more likely to be an example of:

Volume-based rates are appropriate in situations where the incurrence of factory overhead:

Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year:If Orange, Inc.uses direct labor hours to assign overhead, the unit product cost for Product X will be:

For job costing in service industries, overhead costs are usually applied to jobs based on:

Which of the following is not a cost element on the job cost sheet?

The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost information and to:

If estimated annual factory overhead is $480,000; overhead is applied using direct labor hours; estimated annual direct labor hours are 200,000; actual March factory overhead is $42,000; and actual March direct labor hours are 17,000; then overhead is:

ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: Total materials (direct and indirect) purchased \ 90,000 Indirect materials issued to production 30,000 Total materials issued to production 110,000 Beginning materials inventory 50,000 The ending materials inventory cost is: