Exam 19: Job Order Costing

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 payment of the factory payroll is:

A manufacturing company uses an overhead allocation rate based on direct labor cost.The company's Goods in Process Inventory account has a $15,000 debit balance after all posting is completed,and the cost sheet of the one job still in process shows direct material costs of $6,600 and direct labor costs of $3,000.What is the company's overhead application rate?

There are two basic types of cost accounting systems: job order costing and periodic costing.

In a job order cost accounting system,any immaterial underapplied overhead at the end of the period can be charged entirely to Cost of Goods Sold.

A ______________________ is a separate record maintained for each job.

Bean Company uses a job order cost system and last period incurred $70,000 of overhead and $100,000 of direct labor.Bean estimates that its overhead next period will be $65,000.The company also expects to incur $100,000 of direct labor.If Bean bases its overhead applied on direct labor cost,what should be the overhead allocation rate for the next period?

When a job is finished,its job cost sheet is completed and moved from the file of jobs in process to the file of finished jobs that are yet to be delivered to customers.

A time ticket is a source document an employee uses to record the number of hours at work and that is used each pay period to determine the total labor cost.

The two basic types of cost accounting systems are:

Describe the use of the Factory Payroll account in a job order cost accounting system.

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 issuance of materials to production is:

PRO,Inc.had the following activities during its most recent period of operations: (a)Purchased raw materials on account for $140,000 (both direct and indirect materials are recorded in the Raw Materials Inventory account). (b)Issued raw materials to production of $130,000 (80% direct and 20% indirect). (c)Incurred and paid factory labor costs of $250,000 cash; allocated the factory labor costs to production (70% direct and 30% indirect). (d)Incurred factory utilities costs of $20,000; this amount is still payable. (e)Applied overhead at 80% of direct labor costs. (f)Recorded factory depreciation,$22,000. Prepare journal entries to record the above transactions.

O.K.Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs.O.K.expects to incur $800,000 of overhead during the next period,and expects to use 50,000 labor hours at a cost of $10.00 per hour.What is O.K.Company's overhead application rate?

A company's ending inventory of finished goods has a cost of $35,000 and consists of 750 units.If the overhead applicable to these goods is $8,400,and overhead is applied at the rate of 60% of direct labor,what is the cost of the direct materials used to produce these units?

A source document that an employee uses to record the number of hours at work and that is used to determine the total labor cost for each pay period is a:

A materials requisition is a source document used by production managers to request materials for production and also used to assign materials costs to specific jobs or to overhead.

Prepare journal entries to record the following transactions and events for April using a job order cost accounting system. (a)Purchased raw materials on credit,$69,000. (b)Raw materials requisitioned: $26,000 direct and $5,400 indirect. (c)Factory payroll totaled $46,000 (paid in cash),including $9,500 indirect labor. (d)Paid other actual overhead costs totaling $14,500 cash. (e)Applied overhead totaling $28,200. (f)Finished and transferred jobs totaling $77,500. (g)Jobs costing $58,800 were sold on credit for $103,000.

When time ticket information is entered into the accounting system,the journal entry is a debit to Factory Payroll and a credit to Goods in Process Inventory.

When factory payroll costs for labor are allocated in a job cost accounting system:

Job order costing systems normally use: