Exam 5: Job-Order Costing

The ____________________ of allocation recognizes all interactions among support departments.

Ski Company produces various types of snow skis. Estimated overhead for the year was $720,000 and estimated direct labor hours were 240,000. During the month of June, 17,400 direct labor hours were worked, $50,400 of direct materials were used and the average wage was $12 per hour. In June, 15,000 pairs of skis were produced.

Strict ______________________ are rarely used because they cannot provide accurate unit cost information on a timely basis.

What items may be on a materials requisition form to maintain proper control over a firm's inventory of direct materials?

You are the senior cost accountant at Adventure Industries and you have been asked to explain to the new staff accountant how the company keeps track of job costs through source documents. Also you need to inform the staff accountant how these source documents are important in determining inventory, expense and revenue amounts at the end of the period.

Match each item with the correct statement below. Answers may be used more than once. -This form may be used to maintain proper control over a firm's inventory of direct materials.

In job-order costing, the journal entry for overhead applied at the rate of $3 per direct labor hour when 210 direct labor hours were worked is:

Costs reported on the financial statements must be estimated costs.

A job-order cost sheet is the source document where direct labor costs are assigned to individual jobs.

What type of event would cause two separate journal entries to be made?

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. What is Cost of Goods Sold for February?

Figure 5-3.Mitchell's Softball Gloves Company estimated the following at the beginning of the year: Mitchell uses departmental overhead rates. In the assembly department, direct labor hours are used to apply overhead. Machine hours are used to apply overhead in the testing department.Actual data for August is as follows: -Refer to Figure 5-3. Mitchell decides to continue using departmental overhead rates. If a job spends 4 hours in assembly and 3 hours in testing, what is the amount of overhead charged to the job?

Elf Company produces ornamental trees and uses normal costing. Elf applies overhead based on direct labor hours. The following data are provided:

When a job costing $5,000 is completed, the following journal entry is made:

Carlson Company uses a predetermined rate to apply overhead. At the beginning of the year, Carlson estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. If the predetermined overhead rate is based on machine hours, what is the total amount credited to the plantwide overhead account for the year for Carlson?

Figure 5-5.Brillant Design Company makes custom chairs for individual customers. On October 1, there was one job in process, Job 243, with a cost of $1,300. Jobs 244, 245, and 246 were started during the month of October. Data on costs added during the month are as follows: Overhead is applied to production at the rate of 70% of direct labor cost. Job 245 was completed on October 14 and the client was billed at cost plus 55%. All other jobs remained in process. -Refer to Figure 5-5. What is the price of Job 245?

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 predetermined overhead rate?

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. What is sales revenue for February?

Match each item with the correct statement below. Answers may be used more than once. -This form is filled out by each employee every day.

Figure 5-5.Brillant Design Company makes custom chairs for individual customers. On October 1, there was one job in process, Job 243, with a cost of $1,300. Jobs 244, 245, and 246 were started during the month of October. Data on costs added during the month are as follows: Overhead is applied to production at the rate of 70% of direct labor cost. Job 245 was completed on October 14 and the client was billed at cost plus 55%. All other jobs remained in process. -Refer to Figure 5-5. If selling and administrative expense for the month of October equaled $ 2,000, what is operating income for the month of October?