Exam 4: Job Costing

Which of the following would most likely be a direct cost in a manufacturing company?

Assigning direct costs to a cost object is called

To smooth seasonal fluctuating levels of output, separate indirect-cost rates should be calculated for each month.

Landscape Architects provides landscape consulting services to clients that range from small businesses to large corporations.The budgeted rate charged to customers for consulting per hour is $100.The budgeted overhead for customer-support costs per hour is $45 and the budgeted other direct-cost pool rate is $25 per hour.The budgeted hourly rates charged to jobs are $30 for the architect and $15 for the assistants.Jobs #200 and #201 for Sheridan College incurred 90 and 240 hours-respectively.Each job included one licensed architect and two assistants.The architect worked 12 hours on Job #200 and 60 hours on Job #201.Required: a.Identify the cost objects. b.Determine the costs of each job using budgeted overhead rates.

Which of the following is one of the steps used in assigning manufacturing overhead costs to individual jobs?

Proration is the equalization of the overhead allocation rates between finished goods inventory and work-in-process inventory.

What is the appropriate journal entry if $100,000 of materials were purchased on account for the month of August?

Normal costing refers to

Transferring costs from indirect cost pools to cost objects is called

A job cost record (or job cost sheet)is a document where the costs are recorded and accumulated.

In each period, job costing divides the total cost of producing an identical or similar product by the total number of units produced to obtain a per-unit cost.

A factor used to systematically link an indirect cost to a cost object is called

Professional Recruiting provides recruiting consulting services to clients that range from small businesses to large corporations.The budgeted rate charged to customers for consulting per hour is $150.The budgeted overhead for customer-support costs per hour is $32 and the budgeted other direct-cost pool rate is $25 per hour.The budgeted hourly rates charged to jobs are $65 for the consultants and $22 for the assistants.Jobs #786 and #787 for Compudan Manufacturing incurred 60 and 75 hours-respectively.Each job included one consultant and two assistants.The consultant worked 40 hours on Job #786 and 60 hours on Job #787.Required: a.Identify the cost objects. b.Determine the costs of each job using budgeted overhead rates.

What is the purpose of subsidiary ledgers? How does a subsidiary ledger relate to the control account in the general ledger?

Schulz Corporation applies overhead based upon machine-hours.Budgeted factory overhead was $266,400 and budgeted machine-hours were 18,500.Actual factory overhead was $287,920 and actual machine-hours were 19,050.Before disposition of under/overallocated overhead, the following information was available: Required: a.Determine the budgeted factory overhead rate per machine-hour. b.Compute the over/underallocated overhead. c.Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach.The corporation uses Manufacturing Overhead Allocated and Manufacturing Overhead control accounts. d.Prepare the journal entry to dispose of the variance using the proration approach. e.Identify three value chain categories and provide an example for each on how Klink Corporation could reduce its indirect costs.

Hogan Corporation applies overhead based upon machine-hours.Budgeted factory overhead was $320,000 and budgeted machine-hours were 25,000.Actual factory overhead was $326,900 and actual machine-hours were 23,090.Before disposition of under/overallocated overhead, the following information was available: Required: a.Determine the budgeted factory overhead rate per machine-hour. b.Compute the over/underallocated overhead. c.Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach.The corporation uses Manufacturing Overhead Allocated and Manufacturing Overhead control accounts. d.Prepare the journal entry to dispose of the variance using the proration approach. e.Identify three value chain categories and provide an example for each on how Hogan Corporation could reduce its indirect costs.

Cost pools are defined as groupings of individual cost items which can range from broad, company-wide categories to very narrow categories.

Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold.The company used a budgeted indirect-cost rate for its manufacturing operations.The amount that was allocated ($435,000)to cost of goods sold was different from the actual amount incurred ($425,000).These were the respective ending balances in the Manufacturing Overhead Allocated and Manufacturing Overhead control accounts.Ending balances in the relevant accounts were: Required: a.Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold.Be sure your journal entry closes the related overhead accounts. b.Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances.Be sure your journal entry closes the related overhead accounts.

A company employs 25 full-time staff.The company spent $75,000 in advertising in the year (this amount is a period cost with a constant amount spent each year).Budgeted indirect manufacturing costs total $250,000 and the direct labour rate is $15 per hour.Budgeted labour hours were 500,000, and actual labour hours were 524,000.Actual indirect overhead was $274,600.What are the actual and normal indirect-cost rates respectively?

Answer the following question(s)using the information below.Cloudy Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect cost allocation rate of $21 per direct labour hour.The following data are obtained from the accounting records for June in the current year: -The actual amount of manufacturing overhead costs incurred in June totals