Exam 27: Job Order Cost Accounting

On May 5, a firm purchased 20 units of materials at a unit price of $2.20. On May 15, the firm purchased 35 units at a unit price of $2.45. If the firm uses the LIFO method of inventory pricing, the total cost of 30 units issued on May 20 would be:

Idle time is generally charged to manufacturing overhead.

Under a perpetual inventory system, when goods are completed the Work in Process Inventory account is----------- .

Every job includes some idle time that is usually handled in one of two ways. What are they and under what circumstances is each utilized?

Indirect labor is recorded by debiting the account and crediting the---------- Manufacturing Overhead Applied account.

At the end of the accounting period, the balance in the Work in Process inventory account reflects the cost of:

Job order cost sheets constitute a subsidiary ledger that supports:

A standard cost system may be used:

Prepare a partial income statement for the month for the month of April. Adjust the cost of goods sold for the amount of any overapplied or underapplied overhead.

Actual direct labor and manufacturing overhead costs for Smith Manufacturing were $65,000 and $136,500 respectively. The estimated costs for the year were $75,000 of direct labor and $150,000 in manufacturing overhead. The over (under)applied overhead for the year was:

The manufacturing overhead recorded in the Work in Process Inventory account is the actual amount of overhead incurred.

During the year, Job EH-02 for 900 units was started and completed. Costs entered on the job order cost sheet for this job were $19,600 for materials and $10,135 for labor. The firm applies overhead at the rate of 70% of direct labor costs. 1. What is the amount of overhead that should be applied to the job? 2. What is the total cost of the job? 3. What is the unit cost of the units produced?

West Manufacturing worked on the following jobs in December. Beginning Jobs R2100 and D2200 were completed, shipped and invoiced to customers. Estimated total direct labor hours for the year was 44,000 and total estimated manufacturing overhead was $352,000. Actual manufacturing overhead cost incurred during the year was $375,000. Actual direct labor hours were 45,000. The labor rate for the year averaged $10 per hour. All jobs are billed at 150% o unadjusted manufacturing cost. Based on the information given: 1. Determine the overhead rate for West Manufacturing; 2. Prepare the journal entry to apply manufacturing overhead to manufacturing process for the month of December; 3. Prepare the journal entry to transfer and bill the completed items (skip Finished Goods entry). 4. Determine the balance in the Work in Process account at the end of December. 5. Compute the amount of over/underapplied overhead.

Job order cost accounting is appropriate:

When a cost accounting system is used, perpetual inventory records are kept for raw materials, work in process, and ----------.

There is no need to take periodic physical counts of inventory when the perpetual inventory system is used.

During the year, a firm's direct labor costs were $96,000. The firm applies overhead at the rate of 72% of direct labor costs. The firm's actual overhead costs for the year were $72,315. 1. What was the amount of overhead applied? 2. Did the firm have overapplied or underapplied overhead for the year? 3. What amount was overapplied or underapplied?

Use the following information for the questions: The cost data for the Omega Manufacturing Company for the month of April 2019 is given below. (a.) Raw materials and supplies costing $34,000 were purchased. (b.) The summary of materials requisitions shows that materials and supplies costing $30,900 were issued for u in jobs. Direct materials accounted for $28,000, and the balance consisted of indirect materials and supplies. (c.) The payroll summary shows that direct labor costs were $15,000 and indirect labor costs were $3,000. Social security tax withheld was $1,116, Medicare tax withheld was $261, and income tax deductions were $1,550. (d.) Manufacturing overhead of $6,200 was incurred in addition to indirect materials and indirect labor (credit Accounts Payable). (e.) The predetermined overhead application rate is 75% of direct labor costs. (f.) The summary of completed jobs shows that the cost of these jobs amounted to $39,600. (g.) The summary of sales invoices shows that goods costing $32,000 were sold on credit for $51,000. -Record the necessary entries on page 8 of a general journal. Omit descriptions.

If the manufacturing overhead was overapplied, then the: