Exam 4: Job Costing and Overhead Costing Systems

Martin Manufacturing assigns overhead to jobs based on machine hours.At the beginning of the current year,estimated overhead costs were $200 000 and estimated machine hours were 40 000.During the year,140 machine hours were used on Job #88.By the end of the year,actual overhead costs were calculated to be $202 500 and actual machine hours were 45 000. How much overhead was applied to Job #88 during the year?

Which of the following types of costs are easily tracked or traced and assigned to a specific job in a job order costing system?

Which of the following statements is true with respect to cost drivers?

Horatio Ltd.uses job order costing to measure and track product costs.Horatio has determined that machine hours drive its manufacturing overhead costs.During the month of June,the following data were available for Product #80: Direct labour 350 hours at \ 10 per hour Direct materials 40 square yards at \ 25 per yard Machine hours usedd 1000 hour If total manufacturing overhead costs during the month totalled $10 000 when a total of 25 000 machine hours were used,what will be the total manufacturing cost of Product #80?

Refer to the James Ingram information below. James Ingram assigns overhead to jobs based on direct labour hours. At the beginning of the current year, estimated overhead costs were $300 000 and estimated direct labour hours were 50 000, while estimated machine hours were 60 000. During the year, 500 direct labour hours and 400 machine hours were used on Job #99. By the end of the year, actual overhead costs were calculated to be $218 000. Actual direct labour hours was 39 000 while actual machine hours was 48 000. -What is the over/under application for the year,if machine hours is the overhead cost driver?

Jason Cabinets produces cabinetry for offices around Adelaide CBD.The company adds overhead costs to cabinetry jobs at the rate of $5.00 per direct labour hour.The company accumulates overhead costs in a separate manufacturing overhead account and applies overhead costs to products from this account into the WIP for jobs.The following data provide details of the company's activity and balances during the last half of the year: \begin{array}{|l|c|c|}\hline & \text { 1 July} & 31 \text { December } \\\hline \text { Direct materials inventory } &\$75000& \$78000\\\hline \text { Work in process inventory } &48000 &42000 \\ \hline\text { Finished goods inventory} &35000&33000\\\hline \text { Monthly production data: } && \\\hline \text { Direct materials purchased } &\$223& \\ \hline \text {Direct labour costs ( \$ 20 / \mathrm{hr} .) } &\$300000\\ \hline\end{array} Required: A. Calculate the cost of direct materials used during the period. B. Calculate the cost of goods manufactured during the period. C. At the end of December, Jason found that it had actually incurred overhead costs of $\$ 80 000$ . What is Jason's cost of goods sold after adjustment?

The key to allocating overhead costs is the determination of the:

The following data are available for Johnson machine builders: Estimated direct labour hours 200000 Applied overhead \ 750000 The applied overhead rate is $5 per direct labour hour. Required: A. What was the actual direct labour hours for the year? B. How would your answer to Part A change, if the applied overhead rate was 40 per cent less than given in the question?

Which of the following companies would be the most likely to adopt a job order costing system?

Why do many managers desire to use a predetermined overhead rate instead of an actual overhead rate?

Which of the following is not true regarding predetermined overhead rates?

Costs associated with factory insurance,maintenance,rent,property taxes,and other similar items are typically included in manufacturing overhead and assigned to products:

Pioria Products assigns overhead to specific jobs based on machine hours.At the beginning of the current year,estimated overhead costs were $2 150 000 and estimated machine hours were 500 000.By the end of the year,actual overhead costs were calculated to be $1 900 000 and actual machine hours were 475 000. Required: A. Calculate the predetermined overhead rate. B. How much overhead would be applied to a particular job that required 315 machine hours? C. How much total overhead was applied during the year? D. By how much was overhead over- or underapplied for the year? Be sure to indicate whether it was over- or underapplied.

A good allocation base:

When using job-order costing,which of the following costs is the least likely to be known in a timely enough manner for decision-making purposes?

Jason Harmon,an employee with Nelson Products,earned a gross wage of $825 for the 50 hours he worked last week.Jason earns $15 per hour and is paid time-and-a-half for overtime. In addition,Nelson paid $100 for Jason's health insurance.The following chart shows a breakdown of Jason's time worked: Hours worked on a specitic job 47 Hours spent as 'idle' Total hours worked 50 Discuss how the company should allocate Jason's wage and health insurance costs to products.

Which of the following statements is correct regarding fringe benefits earned by employees whose regular wages are normally classified as direct labour?

Brian James Productions purchased $13 000 in direct materials in June.There was $7000 in direct materials at the end of May,and $3000 in direct materials at the end of June.Additionally,indirect labour costs of $13 000 were incurred in June.Manufacturing costs are $125 000 and manufacturing overhead was 30 per cent of conversion costs. Required: What is the direct labour cost for May?

Refer to the James Ingram information below. James Ingram assigns overhead to jobs based on direct labour hours. At the beginning of the current year, estimated overhead costs were $300 000 and estimated direct labour hours were 50 000, while estimated machine hours were 60 000. During the year, 500 direct labour hours and 400 machine hours were used on Job #99. By the end of the year, actual overhead costs were calculated to be $218 000. Actual direct labour hours was 39 000 while actual machine hours was 48 000. -How much overhead was applied to Job #99 during the year if the company uses direct labour hours as its overhead driver?

Which of the following statements regarding plantwide overhead rates is true?