Exam 19: Job Order Costing

Job order production systems would be appropriate for companies that produce custom homes,specialized equipment,and special computer systems.

Sail Away takes special orders to manufacture sail boats for high end customers.Complete the job cost sheets for Sail Away for September based on the following information.Prepare journal entries to record the transactions as well as post to the job cost sheets. a.Purchased raw materials on credit,$145,000. b.Materials requisitions: Job 240,$48,000; Job 241,$36,000; Job 242,$42,000; indirect materials were $12,000. c.Paid $130,000 for factory wages. d.Time tickets used to charge labor to jobs: Job 240,$40,000; Job 241,$30,000; Job 242,$35,000,indirect labor is $25,000. e.The company incurred the following additional overhead costs: depreciation of factory building,$70,000; depreciation of factory equipment,$60,000; expired factory insurance,$10,000; utilities and maintenance cost of $20,000 were paid in cash. f.Applied overhead to all three jobs.The predetermined overhead rate is 190% of direct labor cost. g.Transferred jobs 240 and 242 to Finished Goods Inventory. h.Sold job 240 for $300,000 for cash. i.Closed the under- or over-applied overhead account balance.

The Dina Corp.has applied overhead to jobs during the period as follows: The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account,and this amount is not material.The entry to dispose of this remaining factory overhead balance is:

Time tickets for factory employees during the month of August are summarized as follows: Make the necessary journal entries to record factory payroll.

A clock card is a source document that an employee uses to report how much time was spent working on a job or on overhead and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead.

A company charged the following amounts of overhead to jobs during the current year: $12,000 to jobs still in process,$42,000 to jobs completed but not sold,and $66,000 to jobs finished and sold.At year-end,the company's Factory Overhead account has a credit balance of $9,000,which is not a material amount.What entry (if any)should the company make at year-end related to this overhead balance?

Explain how a service firm,such as an advertising agency,might use job order costing.

A ________ accounting system records production activities using a periodic inventory system.A ________ accounting system records production activities using a perpetual inventory system.

In a job order cost accounting system,raw materials requisitioned as direct materials are debited to __________________; indirect materials are debited to ________________.

The production of one unit of Product BBB used $17.50 of direct materials and $21.00 of direct labor.The unit sold for $56.00 and was assigned overhead at a rate of 30% of labor costs.What is the gross profit per unit on its sale?

Bard Manufacturing uses a job order cost accounting system.During one month Bard purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Bard incurred a factory payroll of $150,000,paid in cash,of which $40,000 is classified as indirect labor.Bard uses a predetermined overhead application rate of 150% of direct labor cost.The journal entry to record the purchase of materials is:

A job cost sheet shows information about each of the following items except:

Selwyn's Service applied overhead on the basis of direct labor costs during the current year.Overhead applied was $16,500.Actual overhead incurred was $17,200. (a)Prepare a journal entry to remove this difference assuming that it is not material. (b)Instead,assume actual overhead incurred was only $24,000.Describe (without computations)the alternative procedure that Selwyn might use to record this material difference.

A company that produces a large number of standardized units would normally use a job order cost accounting system.

The Johnson Manufacturing Company has the following job cost sheets on file.They represent jobs that have been worked on during March of the current year.This table summarizes information provided on each sheet: (a)What is the cost of goods sold for the month of March? (b)What is the cost of the goods in process inventory on March 31? (c)What is the cost of the finished goods inventory on March 31?

Hancock Manufacturing allocates overhead to production on the basis of direct labor costs.At the beginning of the year,Hancock estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000.During the year Hancock incurred $418,000 in materials costs,$413,200 in overhead costs and $224,000 in direct labor costs.Compute the amount of under- or overapplied overhead for the year.

When a job is finished,its job cost sheet is completed and moved from the jobs in process file to the ____________________ file.

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

When factory payroll is assigned to specific jobs,______________________ is debited.

A company has an overhead application rate of 125% of direct labor costs.How much overhead would be allocated to a job if it required total labor costing $20,000?