Exam 19: Job Order Costing

The Merker Manufacturing Company has the following job cost sheets on file. They represent jobs that have been worked on during April of the current year. This table summarizes information provided on each sheet: Number Total Cost Incurred 544 \ 15,050 Finished and delivered 545 \ 22,400 Finished and delivered 546 \ 7,500 Finished and unsold 547 \ 4,300 Finished and delivered 548 \ 33,000 Unfinished 549 \ 62,000 Finished and unsold 550 \ 14,600 Unfinished 551 \ 22,200 Finished and delivered 552 \ 3,600 Finished and unsold 553 \ 1,000 Unfinished (a) What is the cost of goods sold for the month of April? (b) What is the cost of the Work in Process inventory on April 30? (c) What is the cost of the finished goods inventory on April 30?

The predetermined overhead rate is used to allocate overhead cost to jobs.

A time ticket is a source document used by an employee to record the total number of hours worked and serves as a source document for entries to record labor costs.

Job order production systems would be appropriate for companies that produce custom homes, specialized equipment, and special computer systems.

Selected information from the budget of the Singh Corp. at the beginning of the year follows: Estimated factory overhead \ 132,000 Estimated direct labor hours 55,000 hours Estimated machine hours......... 41,250 hours Estimated direct labor cost \ 825,000 Actual factory overhead \ 144,000 incurred during the year Calculate the predetermined overhead rate if the company uses the following as a basis: (a) Direct labor hours. (b) Direct labor cost. (c) Machine hours.

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 total manufacturing costs added during the period are:

Service firms, unlike manufacturing firms, should only use actual costs when determining a selling price for their services.

When factory payroll is assigned to specific jobs, ________ is debited.

A materials requisition is a source document used by materials managers of a manufacturing company to order raw materials from suppliers; it serves the same purpose as a purchase order in a merchandising company.

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

A time ticket is a source document that an employee uses to report how much direct labor was performed for a job and is used to determine the amount of direct labor to charge to the job.

A company that makes which of the following types of products would best be suited for a job costing system?

A job order production system would be appropriate for a company that produces which one of the following items?

Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $300,000, and direct labor costs to be $150,000. Actual overhead costs for the year totaled $330,000, and actual direct labor costs totaled $170,000. -At year-end, Factory Overhead account is:

What is a cost accounting system? What are the two basic types of cost accounting systems?

The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $3,200 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $1,400 and direct labor cost of $800. Therefore, the amount of the applied overhead is:

If overhead is underapplied, it means that individual jobs have not been charged enough during the year and the cost of goods sold reported is too low.

Job cost sheets include both product and period costs.

The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory. The cost of units transferred to finished goods is:

Describe the flow of the raw materials, both direct and indirect, through the inventory accounts from purchase to use.