Exam 19: Job Order Costing

During 2014, a company incurred $500,000 of manufacturing overhead costs and allocated $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.

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 $403,200, and a total of 7,200 billable hours for the year. The office and administrative costs were estimated at $676,800. The allocation base for office and administrative costs is billable hours. In June, Fogelin signed a contract for a Russian ballet performance. They negotiated a price of $6,400 for their services. When the job was complete, Fogelin's records showed that they had logged 36.5 billable hours. What was the amount of gross profit that Fogelin made on the job?

At the beginning of 2015, Conway Manufacturing had the following account balances: Following additional details are provided for the year: The ending balance in the Work-in-Process Inventory account is a:

Hosanna Furnishings finished Job A40 which involved $4,000 of direct materials and $600 of direct labor. Hosanna uses a predetermined overhead allocation rate based on 40% of percent of direct labor costs. Provide the journal entry needed to record the completion of the job.

Which of the following correctly describes the term cost driver?

The total amount of manufacturing overhead costs incurred and paid during the period is recorded on the credit side of the Manufacturing Overhead account.

When a job is completed, the total cost of the job is recorded with a debit to Finished Goods Inventory and a credit to Work-in-Process Inventory.

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

Hermione Company completed Job GH6 last month. The cost details of GH6 are shown below: Calculate the cost per unit of finished product of Job GH6.

The predetermined overhead allocation rate is the rate:

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 $403,200, and a total of 7,200 billable hours for the year. The office and administrative costs were estimated at $676,800. What rate would Fogelin use for the cost of its specialists?

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

Job order costing is well suited for the service industry.

Manufacturing Overhead is a temporary account used to ________ indirect production costs during the accounting period.

Which of the following is the correct order of the four steps of tracking product costs?

Overallocated manufacturing overhead occurs when the manufacturing overhead allocated to Work-in-Process Inventory is less than the amount actually incurred.

Which of the following businesses is most likely to use a process costing system?

Darrius Travel Services provided the following information: Cost allocation rate for direct labor: $40 per hour Cost allocation rate for indirect costs: $22 per hour Darrius is negotiating a job with a new client. The job will require 10 hours of direct labor. If Darrius wishes to make at least 15% gross profit on the revenues, they need to receive $713 of revenues.

During 2015, a company incurred $500,000 of manufacturing overhead costs and allocated $506,000 of manufacturing overhead costs. At the year-end, the adjustment entry needed to clear the overhead balance to zero will include a debit to Cost of Goods Sold.

Altima Company finished Job A40 on the last working day of the year. It utilized $400 of direct materials and $3,600 of direct labor. Altima uses a predetermined overhead allocation rate based on percentage of direct labor costs which has been fixed at 40%. The entry to record the completion of the job should involve a: