Exam 4: Job Costing

Modern Electronics manufactures surround sound systems and applies manufacturing costs to production at a budgeted indirect-cost rate of $22 per direct-labor hour. The following data are obtained from the accounting records for August 20X9: Required: a. What actual amount of manufacturing overhead cost was incurred during August 20X9? b. What amount of manufacturing overhead was allocated to all jobs during August 20X9? c. For August 20X9, was manufacturing overhead underallocated or overallocated? Explain.

Direct costs are allocated to the cost object using a cost-allocation method.

Job costing:

During an accounting period, job costs are computed on an ongoing basis by the use of:

Answer the following questions using the information below: Philadelphia Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labor-hour. The following data are obtained from the accounting records for June 2010: -The actual amount of manufacturing overhead costs incurred in June 2010 totals:

A company would use multiple cost-allocation bases:

Each indirect-cost pool of a manufacturing firm:

Many large companies which have multiple production methods and processes have hybrid costing systems that are:

When actual indirect costs exceed allocated indirect costs, indirect costs have been underapplied.

In job costing, only direct costs are used to determine the cost of a job.

Manufacturing overhead costs incurred for the month are: Which is the correct journal entry assuming utilities and repairs were on account?

A local CPA employs ten full-time professionals. The budgeted compensation per employee is $50,000. The maximum billable hours for each client are 400. Clients always receive their full amount of time. All professional labor costs are included in a single direct-cost category and are traced to jobs on a per-hour basis. Any other costs are included in a single indirect-cost pool, allocated according to professional labor-hours. Budgeted indirect costs for the year are $200,000 and the firm had 20 clients. Required: a. What is the direct-labor-cost rate per hour? b. What is the indirect-cost rate per hour?

Sedgwick County Hospital uses an indirect job-costing system for all patients. In June, the budgeted nursing care charges for each department and budgeted allocation bases of nursing days are as follows: Patient Ms. Graves spent six days in critical care and eight days in special care during June. The remainder of the 30-day month was spent in the general care area. Required: a. Determine the budgeted overhead rate for each department. b. What are the total charges to Ms. Graves if she was in the facility the entire month?

In a normal costing system, the Manufacturing Overhead Control account:

The reliability of the job-cost records depends on the reliability of the inputs.

Each cost pool may have multiple cost allocation bases.

When a job is complete:

Proration is the spreading of underallocated or overallocated overhead among ending work in process, finished goods, and costs of goods sold.

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/overapplied overhead, the cost of goods sold was $560,000 and ending inventories were as follows: Required: a. Determine the budgeted factory overhead rate per machine-hour. b. Compute the over/underapplied overhead. c. Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach. d. Prepare the journal entry to dispose of the variance using the proration approach.

For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system. Required: a. direct materials purchased b. direct materials used c. direct manufacturing labor d. indirect manufacturing labor e. finished goods control f. cost of goods sold