Exam 17: Job Order and Process Costing

Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed timesheets distributed by client number. Office and administrative costs total $754,000 a year. What is the cost allocation rate that Bilkins will use for direct labor i.e. the cost of the professional staff?

At the beginning of 2012, Conway Manufacturing Company had the following account balances: During the year, the following transactions took place: Actual manufacturing overhead costs incurred \ 89,770 Manufacturing overhead costs allocated to production \ 95,200 Actual direct materials cost \ 224,000 Actual direct labor cost \ 93,750 Actual direct labor hours 18,500 direct labor hours Actual machine hours 56,000 machine hours Please record these transactions to the T-accounts and calculate preliminary balances in the Work in process, Finished goods and Manufacturing overhead accounts, using the format below:

Underallocation of manufacturing overhead would require which of the following year-end adjustments?

Which of the following correctly describes the term conversion costs?

Which of the following companies would NOT use job order costing?

Abba Accounting expects its accountants to work a total of 24,000 direct labor hours per year. Abba's estimated total indirect costs are $240,000. The direct labor rate is $75 per hour. If Abba does a job requiring 40 hours of direct labor, and bills the client using a standard markup of 40%, what will be the amount that Abba bills the client for?

Jorst Manufacturing Company began business on January 1, 2012. During its first year of operation, Jorst worked on 5 industrial jobs, and reported the following information at year-end: Job 1 Job 2 Job 3 Job 4 Job 5 Direct Materials 1,000 7,500 4,000 3,500 1,500 Direct Labor 12,000 20,000 13,000 12,000 800 Allocated Mfg. Overhead 1,500 6,000 2,500 7,500 200 Job completed: Jun 30 Sep 1 Oct 15 Nov 1 Not completed Job sold: Jul 10 Sep 12 Not sold Not sold N/A Revenues: 25,000 39,000 N/A N/A N/A - At year-end, what was the balance in Finished goods?

Work in process inventory is debited for the incurrence of both direct and indirect labor in a job costing system.

When is the predetermined manufacturing overhead rate for a given production year calculated?

The records at Smith and Jones Company show Job. No. 110 charged with $11,000 of direct materials and $12,500 of direct labor. Smith and Jones Company allocates manufacturing overhead at 85% of direct labor cost. What is the total cost of Job No. 110?

Which of the following describes the allocation base for allocating manufacturing overhead costs?

Rankin Food Products produces cane sugar syrup in bulk quantities, and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 80,000 gallons of syrup were started into production. During the month, 79,100 gallons were completed, and 900 remained in process, partially completed. During January, the Mixing Department incurred $7,500 of materials costs, $900 direct labor costs, and was allocated $2,500 of manufacturing overhead costs. Which of the following is the correct journal entry to record the costs added during January to the Mixing Department?

Specialty Wood Products company had the following manufacturing labor costs last month: Woudworkers' weges \ 100,000 Indlirect laborers' wages \ 20,000 Maintenance personnel weges \ 10,000 What is the journal entry to record the incurrence of these wages?

At the beginning of 2012, Conway Manufacturing Company had the following account balances: During the year, the following transactions took place: Direct materials placed in production: \ 80,000 Direct labor incurred: \ 190,000 Manufacturing overhead incurred \ 300,000 Manufacturing overhead allocated to production: \ 295,000 Jobs completed with cost of : \ 500,000 Jobs sold for total revenue of : \ 750,000 Jobs sold with cost of: \ 440,000 Remaining balance of Manufacturing overhead cleared to zero - After recording all of these transactions, the ending balance in the Work in process account is a:

The entry to allocate manufacturing overhead costs to work in process requires a debit to Manufacturing overhead.

Which of the following best describes the term equivalent units?

Abba Accounting expects its accountants to work a total of 24,000 direct labor hours per year. Abba's estimated total indirect costs are $240,000. What is the indirect cost allocation rate?

During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $460,000 of manufacturing overhead costs. At year-end, the adjustment entry needed to clear the overhead balance to zero will include a debit to Cost of goods sold.

At January 1, 2012, Feldstein Manufacturing Company had a beginning balance in Work in process of $80,000 and a beginning balance in Finished goods of $20,000. During the year, Feldstein incurred Manufacturing costs of $350,000. During the year, the following transactions occurred: Job A-12, was completed for a total cost of $120,000 and was sold for $125,000. Job A-13, was completed for a total cost of $200,000 and was sold for $210,000. Job A-15, was completed for a total cost $60,000, but was not sold as of year-end. - At the end of the year, what was the balance in Finished goods?

Gardner Machine Shop estimates manufacturing overhead costs for the coming year at $316,000. They will allocate based on direct labor hours. Gardner estimates 5,000 direct labor hours for the coming year. In January, Gardener completed job number A33, which included 15 direct labor hours. How much overhead was allocated to the job?