Exam 19: Job Order Costing

Which of the following companies is most likely to use job order costing?

Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. Bilkins has 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 normal billable hours are 8,000 hours per year. Professional staff keeps detailed timesheets organized by the 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?

Broxsie Fabrication Company issued $60,000 of direct materials and $15,500 of indirect materials to production. Prepare the journal entry to record the transaction.

The journal entry to record direct labor costs actually incurred involves a debit to the:

Aminta Accounting expects its accountants to work a total of 30,000 direct labor hours per year. Aminta's estimated total indirect costs are $150,000. The direct labor rate is $100 per hour. Direct labor hours is the allocation base for indirect costs. If Aminta does a job requiring 50 hours of direct labor and bills the client using a standard markup of 40%, calculate the amount of the client's bill.

Which of the following would use a process costing system rather than a job order costing system?

Haverhill Products completed Job 440 and several other jobs in the year 2014. In addition to direct labor and direct materials cost, Haverhill allocated $450 of manufacturing overhead to the job. It also incurred $300 and $75 on account of selling overhead and administration overhead. Provide the journal entry for the allocation of manufacturing overhead.

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 2014, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $676,800, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $403,200. The allocation base for office and administrative costs is billable hours. In June, Fogelin signed a contract for a Russian ballet performance. They estimated it would require 34 hours of specialist time. What is the total cost estimate for this contract?

Dexter Accounting expects its accountants to work for 24,000 direct labor hours per year. Dexter's estimated total indirect costs are $240,000. The direct labor rate is $75 per hour. Direct labor hours is the allocation base for indirect costs. If Dexter does a job requiring 40 hours of direct labor, what is the total job cost?

Melinda Machine Shop estimates manufacturing overhead costs for the coming year at $225,000 which will be allocated based on direct labor hours. Melinda estimates 9,000 direct labor hours for the coming year. In January, Job A33 was completed which required 8 direct labor hours and 34 machine hours. Provide the journal entry to allocate manufacturing overhead to the job.

Manufacturing overhead is allocated by debiting the Work-in-Process Inventory account and crediting the Manufacturing Overhead account.

If the debit side of the Manufacturing Overhead account totals more than the credit side of the account, the manufacturing overhead is overallocated.

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

The journal entry for adjustment of overallocated manufacturing overhead includes a:

Arabica Manufacturing uses a predetermined overhead allocation rate based on the number of machine hours. At the beginning of 2015, they estimated total manufacturing overhead costs to be $1,050,000, total number of direct labor hours to be 5,000, and total number of machine hours to be 25,000 hours. What was the predetermined overhead allocation rate?

On January 1, 2015, Frederic Manufacturing had a beginning balance in Work-in-Process Inventory of $160,000 and a beginning balance in Finished Goods Inventory of $20,000. During the year, Frederic incurred manufacturing costs of $200,000. During the year, the following transactions occurred: Job C-62 was completed for a total cost of $140,000 and was sold for $155,000. Job C-63 was completed for a total cost of $180,000 and was sold for $210,000. Job C-64 was completed for a total cost $80,000 but was not sold as of year-end. The Manufacturing Overhead account had an unadjusted credit balance of $24,000, and was cleared to zero at year-end. What was the amount of gross profit reported by Frederic at the end of the year?

Zephyros Corporation had estimated manufacturing overhead costs for the coming year to be $316,000. The total estimated direct labor hours and machine hours for the coming year are 6,000 and 10,000, respectively. Manufacturing overhead costs are allocated based on direct labor hours. What is the predetermined overhead allocation rate?

Archangel Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor costs. The following are the details of production during the year: Calculate the amount of manufacturing overhead costs allocated to production.

Archangel Manufacturing calculated a predetermined overhead allocation rate at the beginning of the year based on a percentage of direct labor costs. The production details for the year are given below: Calculate the allocation rate for the year based on the above data.

When direct materials are received on the production floor, they are recorded on the job cost record.