Question 1

Describe the flow of the employee labor,both direct and indirect,through the inventory accounts.

Accepted Answer

Direct labor is assigned to jobs using t

Question 2

The Work in Process Inventory account of a manufacturing company has a $3,200 debit balance.The company applies overhead using direct labor cost.The cost sheet of the only job still in process shows direct material cost of $1,400 and direct labor cost of $800.Therefore,the amount of applied overhead is:

Accepted Answer

A) $1,800. 
B) $2,200. 
C) $1,000. 
D) $800. 
E) $2,400. 
A) $1,800. 
B) $2,200. 
C) $1,000. 
D) $800. 
E) $2,400.

Question 3

Minstrel Manufacturing uses a job order costing system.During one month,Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.
-The journal entry to record the purchase of materials is:

Accepted Answer

A) Debit Raw Materials Inventory $198,000; credit Accounts Payable $198,000. 
B) Debit Work in Process Inventory $198,000; credit Accounts Payable $198,000. 
C) Debit Raw Materials Inventory $198,000; credit Work in Process Inventory $198,000. 
D) Debit Work in Process Inventory $195,000; credit Raw Materials Inventory $195,000. 
E) Debit Raw Materials Inventory $198,000; credit Finished Goods Inventory $198,000. 
A) Debit Raw Materials Inventory $198,000; credit Accounts Payable $198,000. 
B) Debit Work in Process Inventory $198,000; credit Accounts Payable $198,000. 
C) Debit Raw Materials Inventory $198,000; credit Work in Process Inventory $198,000. 
D) Debit Work in Process Inventory $195,000; credit Raw Materials Inventory $195,000. 
E) Debit Raw Materials Inventory $198,000; credit Finished Goods Inventory $198,000.

Question 4

Job order costing is used to determine the cost of producing each job or job lot.

Accepted Answer

A) True 
 B)False

Question 5

Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs.Cosi expects to incur $800,000 of overhead during the next period,and expects to use 50,000 labor hours at a cost of $10.00 per hour.What is Cosi Company's predetermined overhead rate?

Accepted Answer

A) 6.25%. 
B) 62.5%. 
C) 160%. 
D) 1600%. 
E) 67%. 
A) 6.25%. 
B) 62.5%. 
C) 160%. 
D) 1600%. 
E) 67%.

Question 6

A time ticket is a source document that an employee uses to report how much indirect labor was performed for a job.

Accepted Answer

A) True 
 B)False

Question 7

Using the following accounts and a predetermined overhead rate of 130% of direct labor cost,compute the amount of applied overhead.

Accepted Answer

A) $78,000. 
B) $60,000. 
C) $138,000. 
D) $71,890. 
E) $90,500. 
A) $78,000. 
B) $60,000. 
C) $138,000. 
D) $71,890. 
E) $90,500.

Question 8

If actual overhead incurred during a period exceeds applied overhead,the difference will be a debit balance in the Factory Overhead account at the end of the period.

Accepted Answer

A) True 
 B)False

Question 9

A company uses a job order costing system and applies overhead on the basis of direct labor cost.A summary of the company's Work in Process Inventory account for December appears below.
Work In Process
   Fill in the blanks for the following:
(1)The total cost of the direct materials,direct labor,and factory overhead for jobs still in progress is $________.
(2)The company's overhead application rate is ________%
(3)Job No.6 had $26,550 of direct labor cost.Therefore,the job must have had $________ of direct materials cost.
(4)Job No.8 had $73,998 of direct materials cost.Therefore,the job must have had $________ of factory overhead cost.

Accepted Answer

(1)$149,400 (ending balance of account)

Question 10

A job order costing system would best fit the needs of a company that makes:

Accepted Answer

A) Shoes and apparel. 
B) Paint. 
C) Cement. 
D) Custom machinery. 
E) Pencils and erasers. 
A) Shoes and apparel. 
B) Paint. 
C) Cement. 
D) Custom machinery. 
E) Pencils and erasers.

Question 11

A job cost sheet includes:

Accepted Answer

A) Direct materials,direct labor,and operating costs. 
B) Direct materials,estimated overhead,and administrative costs. 
C) Direct labor,actual overhead,and selling costs. 
D) Direct material,direct labor,and applied overhead. 
E) Direct materials,direct labor,and selling costs. 
A) Direct materials,direct labor,and operating costs. 
B) Direct materials,estimated overhead,and administrative costs. 
C) Direct labor,actual overhead,and selling costs. 
D) Direct material,direct labor,and applied overhead. 
E) Direct materials,direct labor,and selling costs.

Question 12

Describe the flow of labor costs in a job order costing system,and identify the documents used in the system.

Accepted Answer

Labor costs are classified as either dir

Question 13

At year-end,Marshall Enterprise's Factory Overhead account has a credit balance of $5,000,which is not a material amount.What entry should Marshall make at year-end?

Accepted Answer

A) No entry is needed. 
B) Debit Factory Overhead $5,000; credit Cost of Goods Sold $5,000. 
C) Debit Cost of Goods Sold $5,000; credit Factory Overhead $5,000. 
D) Debit Factory Overhead $5,000; credit Work in Process Inventory $5,000. 
E) Debit Factory Overhead $5,000; credit Finished Goods Inventory $5,000. 
A) No entry is needed. 
B) Debit Factory Overhead $5,000; credit Cost of Goods Sold $5,000. 
C) Debit Cost of Goods Sold $5,000; credit Factory Overhead $5,000. 
D) Debit Factory Overhead $5,000; credit Work in Process Inventory $5,000. 
E) Debit Factory Overhead $5,000; credit Finished Goods Inventory $5,000.

Question 14

If overhead is underapplied,it means that individual jobs have been charged too much during the year and the cost of goods sold reported is too high.

Accepted Answer

A) True 
 B)False

Question 15

Chung Corporation uses a job order costing system.Five jobs were worked on during the current year.The predetermined overhead rate is 20% of direct labor costs.The following cost information is available (all materials and time ticket information applies to direct costs):
   Part 1-Complete job cost sheets for each job.
   
  Part 2-Identify the amounts of each of the following accounts at the end of the period
a.Work in Process________
b.Finished Goods________
c.Cost of Goods Sold________

Accepted Answer

Part 1
@#IMG-DLM&

@#IMG-DLM& Part 2
a.Work in Pr

Question 16

Explain how a service firm,such as an advertising agency,might use job order costing.

Accepted Answer

When jobs in a service firm such as an a

Question 17

Labor costs in production can be:

Accepted Answer

A) Direct or indirect. 
B) Indirect or sunk. 
C) Direct or payroll. 
D) Indirect or payroll. 
E) Direct or sunk. 
A) Direct or indirect. 
B) Indirect or sunk. 
C) Direct or payroll. 
D) Indirect or payroll. 
E) Direct or sunk.

Question 18

The following information about the Zhang Company is available on December 31:
 
The company applies overhead on the basis of 125% of direct labor costs.Calculate the amount of over- or underapplied overhead.

Accepted Answer

The answer of The following information about the Zhang Company...

Question 19

The balance in the Work in Process Inventory at any point in time equals

Accepted Answer

A) the costs for jobs finished during the period but not yet sold. 
B) the manufacturing cost of jobs ordered but not yet started into production. 
C) the sum of the manufacturing costs for all jobs in process but not yet completed. 
D) the manufacturing costs of all jobs started during the period,completed or not. 
E) the sum of the materials,labor and overhead costs paid during the period. 
A) the costs for jobs finished during the period but not yet sold. 
B) the manufacturing cost of jobs ordered but not yet started into production. 
C) the sum of the manufacturing costs for all jobs in process but not yet completed. 
D) the manufacturing costs of all jobs started during the period,completed or not. 
E) the sum of the materials,labor and overhead costs paid during the period.

Question 20

Adams Manufacturing allocates overhead to production on the basis of direct labor costs.At the beginning of the year,Adams estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000.During the year Adams incurred $418,000 in materials costs,$413,200 in overhead costs and $224,000 in direct labor costs.
-Compute the amount of overhead applied to jobs during the year.

Accepted Answer

A) $396,000. 
B) $424,450. 
C) $413,190. 
D) $413,200. 
E) $403,200. 
A) $396,000. 
B) $424,450. 
C) $413,190. 
D) $413,200. 
E) $403,200.

Exam 15: Job Order Costing and Analysis

Describe the flow of the employee labor,both direct and indirect,through the inventory accounts.

Job order costing is used to determine the cost of producing each job or job lot.

Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs.Cosi expects to incur $800,000 of overhead during the next period,and expects to use 50,000 labor hours at a cost of $10.00 per hour.What is Cosi Company's predetermined overhead rate?

A time ticket is a source document that an employee uses to report how much indirect labor was performed for a job.

Using the following accounts and a predetermined overhead rate of 130% of direct labor cost,compute the amount of applied overhead.

If actual overhead incurred during a period exceeds applied overhead,the difference will be a debit balance in the Factory Overhead account at the end of the period.

A job order costing system would best fit the needs of a company that makes:

A job cost sheet includes:

Describe the flow of labor costs in a job order costing system,and identify the documents used in the system.

At year-end,Marshall Enterprise's Factory Overhead account has a credit balance of $5,000,which is not a material amount.What entry should Marshall make at year-end?

If overhead is underapplied,it means that individual jobs have been charged too much during the year and the cost of goods sold reported is too high.

Explain how a service firm,such as an advertising agency,might use job order costing.

Labor costs in production can be:

The following information about the Zhang Company is available on December 31: The company applies overhead on the basis of 125% of direct labor costs.Calculate the amount of over- or underapplied overhead.

The balance in the Work in Process Inventory at any point in time equals

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

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