Exam 17: Job Order and Process Costing

In a process costing system, each department has its own Work in process account.

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below. Refining Department, beginning balance at January 1, 2012 Quantity: 2,000 units (partially processed) Cost: \ 15,600 of costs transferred in \ 1,900 of materials cost \ 4,500 of conversion cost \ 22,000 total account balance Costs added during January Cost of units transferred in: \ 222,400 Direct materials cost \ 45,000 Conversion cost \ 93,750 $\text { Refining Department, ending balance at January } 31,2012$ Quantity: 5,000 units (partially processed) \% completion for materials cost: 90\% \% completion for conversion cost: 75\% - Please perform a process costing analysis and answer the following question: For the Refining Department in the month of January, what was the total cost of product completed and transferred out? (Please round to nearest whole dollar.)

LDR Manufacturing produces a pesticide chemical 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, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process. At the end of the month, LDR calculated equivalent units. The ending inventory in the Mixing Department was 60% complete with respect to conversion costs. -With respect to direct materials costs, how many equivalent units were calculated for the product that was completed, and how many equivalent units were calculated for the ending balance?

Haverhill Products just completed job number 440. In addition to direct labor and direct materials cost, Haverhill allocated $450 of manufacturing overhead to the job. Please provide the journal entry for the allocation of overhead.

Which of the following correctly describes the predetermined manufacturing overhead rate?

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 these transactions, the ending balance in the Finished goods account is a:

Overallocated manufacturing overhead occurs when the manufacturing overhead allocated to work in process inventory is less than the amount actually incurred.

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. Please provide the journal entry to allocate overhead to the job.

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. - What was the final balance in the Cost of goods sold account?

Which of the following statements is FALSE?

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 these transactions, the ending balance in the Cost of goods sold account is a:

Gardner Machine Shop uses a predetermined manufacturing overhead rate of $63.20 per direct labor hour. In January, Gardener completed job number A33, which included 15 direct labor hours. Which of the following correctly describes the journal entry needed to allocate overhead to the job?

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below. Refining Department, beginning balance at January 1, 2012 Quantity: 2,000 units (partially processed) Cost: \ 15,600 of costs transferred in \ 1,900 of materials cost \ 4,500 of conversion cost \ 22,000 total account balance Costs added during January Cost of units transferred in: \ 222,400 Direct materials cost \ 45,000 Conversion cost \ 93,750 $\text { Refining Department, ending balance at January } 31,2012$ Quantity: 5,000 units (partially processed) \% completion for materials cost: 90\% \% completion for conversion cost: 75\% - Please perform a process costing analysis and answer the following question: For the Refining Department in the month of January, what was the total number of equivalent units with respect to transferred in costs?

Archangel Manufacturing has just finished the year 2012. They created a predetermined manufacturing overhead allocation rate at the beginning of the year based on a percentage of direct labor costs. Below are various data: Total manufacturing overhead estimated at the beginning of the year: \ 140,000 Total direct labor costs estimated at the beginning of the year: \ 350,000 Total direct labor hours estimated at the beginning of the year: 12,000 direct labor hours Actual manufacturing overhead costs for the year: \ 159,000 Actual direct labor costs for the year: \ 362,000 Actual direct labor hours for the year: 12,400 direct labor hours - Based on the data above, what was the allocation rate for 2012? (Please round to nearest whole percent.)

When jobs are completed, the total cost of the job is recorded as a debit to Finished goods and a credit to Work in process.

Which of the following would NOT be considered a manufacturing overhead cost?

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. The Manufacturing overhead account had a preliminary credit balance of $12,000, and was cleared to zero at year-end. What was the amount of gross profit reported by Feldstein at the end of the year?

Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800. What rate would Fogelin use for the cost of its specialists?

Falstaff Products allocates manufacturing overhead with a rate of $62.50 per machine hour. Job number 300 was just completed. It used 12 machine hours. How much overhead was allocated to the job?

Job order costing is most likely used in which of the following industries?