Exam 5: Job-Order Costing

Figure 5-4.Hill Company uses job-order costing. At the end of the month, the following data was gathered: Hill's selling price is cost plus 50% for each of its products. -Refer to Figure 5-4. What is the selling price of Job 806?

Which of the following statements is true about overhead?

Figure 5-6.Stutz, Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to individual customers' specifications. Stutz uses job-order costing to keep track of its costs. In February it worked on three jobs. Data for these jobs are as follows: Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the only one unfinished. The balance of Finished Goods on February 1 is $94,000 (consisting of Job 177). Jobs 177 and 179 are sold during February. Stutz sells its product at cost plus 40%. -Refer to Figure 5-6. Calculate the balance in Work-in-Process on February 28.

Figure 5-1.Morrow Company applies overhead based on direct labor hours. At the beginning of the year, Morrow estimates overhead to be $620,000, machine hours to be 180,000, and direct labor hours to be 40,000. During February, Morrow has 4,200 direct labor hours and 8,000 machine hours. -Refer to Figure 5-1. What is the amount of overhead applied for February?

The work-in-process account consists of all the job-order cost sheets for the completed jobs.

The unit cost of a job consists of the total costs of

Which account can sometimes be skipped when a good is produced for a particular customer?

Match each item with the correct statement below. -Overhead assigned to production using predetermined rates

Figure 5-11.Olson Corporation constructs new homes. Assume that Olson uses a job costing system. During May of the current year, the following transactions occurred: Olson purchased $4,500 of lumber on account.Olson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour.Depreciation of $1,500 on equipment used to build new houses was recorded.A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash. -Refer to Figure 5-11. The journal entry to record the requisition of lumber for Olson would include a

When materials are requested for production the cost is removed from ____________ and added to ____________.

If actual overhead is greater than applied overhead, then the variance is called ___________________.

Fowler Company is a job-order costing company that produces customized bicycles. During the month of October, Fowler had three jobs in process, Jobs 3, 4, & 5. By the end of the month all three jobs had been completed, with Job 3 being sold for $435. The following costs belong to each job:

Which of the following is true?

Figure 5-9.Warwick Company has the following transactions for the month of September: Balances at the beginning of the month were: -Refer to Figure 5-9. What is the journal entry to record applied overhead for the month?

The use of a departmental rate has the advantage of being simple and reduces data collection requirements.

Figure 5-14 Deluxe Design Company makes custom furniture. On December 1, there were two jobs in process, Job 683, with a cost of $14,200 and Job 684 with a cost of $23,500. Jobs 685, 686, and 687 were started during the month of December. Data on costs added during the month are as follows: Overhead is applied to production at the rate of 80% of direct labor cost. Job 685 was completed on December 17. Job 684 was completed on December 21 and the client was billed at cost plus 45%. All other jobs remained in process. -Refer to Figure 5-14. Prepare the journal entries to record the following: A.) Requisitioning of raw materials B.) Direct labor costs C.) Applied overhead D.) Transfer to finished goods E.) Sale of finished goods (assume sale was made on account) F.) Closing underapplied/overapplied variance (all variances are immaterial)

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Figure 5-7.Laudermilk produces dairy equipment. Most of its jobs have a number of units per job. The company has two different departments through which all jobs pass. Overhead is applied using a plantwide rate of $13 per direct labor hour. Direct labor wages average $8 an hour. Data for Job #3 for the year is: -Refer to Figure 5-7. Compute the total cost of Job #3.

In job-order costing, the journal entry for $1,700 of unpaid direct labor is:

__________________________ is a costing system that accumulates production costs by process or by department for a given period of time.