Exam 4: Job Costing

Use the information below to answer the following question(s). Jim's Computer Products manufactures keyboards for computers. In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively. For Job 501, the actual costs incurred in the two departments were as follows: Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production. -XYZ Company uses a normal job costing system. The direct labour rate is $27 per hour; and, the budgeted indirect cost allocation rate is $20 and uses direct labour hours as the cost allocation base. What amount should be added to work-in-process control?

ZamTech Moldings allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year: The company estimates that 1,800 direct labour hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined indirect allocation rate per machine hour is closest to

Professional labour costs in a CGA firm are traced directly to the cost object of a given job. Generally, other indirect operating costs are

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. d. Prepare the journal entry to dispose of the variance using the proration approach.

What is the appropriate journal entry if direct materials of $50,000 and indirect materials of $3,000 are sent to the manufacturing plant floor?

The process of assigning costs to a particular product or service is called

Assigning direct costs to a cost object is called

What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.

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). 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.

What is the budgeted direct cost rate per hour for office staff?

For each cost pool, the indirect cost rate equals the indirect cost pool divided by the cost allocation base.

Use the information below to answer the following question(s). Jim's Computer Products manufactures keyboards for computers. In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively. For Job 501, the actual costs incurred in the two departments were as follows: Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production. -What is the total manufacturing cost of Job 892 using actual costing?

A job costing system assigns costs to a distinct unit or set of units of a product or service.

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

Managers and accountants gather the information that goes into their cost systems through source documents, which are the original records that support journal entries in an accounting system.

Why does the Manufacturing Overhead Control account (debit) need to equal the Manufacturing Control account (credit)? What will be the effect of having an end of year remaining balance, debit or credit, on the evaluation of profitability?

A law office employs full-time attorneys and five paraprofessionals. For 2012 indirect costs were budgeted at $225,000, but actually amounted to $350,000. Direct and indirect costs are applied on a professional labour-hour basis which includes both attorney and paraprofessional hours. Total budgeted labour-hours were 25,000; however, actual labour-hours were 30,000. What is the actual indirect-cost rate, if a client used 5,000 professional labour-hours?

The manufacturing overhead control account and the manufacturing overhead allocated account both have zero balances at the end of each year after all adjustments are recorded.

Managers and accountants collect most of the cost information that goes into their information systems through

The Manufacturing Overhead Control account is debited for