Exam 19: Job Order Costing

For each of the following types of business,indicate why the manager needs to know the unit cost information. Managers of a Need to know the cost to Bakery Computer manufacturer Bank Seamstress

At the end of the year,Martin,Inc.has an unadjusted credit balance in the Manufacturing Overhead account of $95.Provide the year-end adjusting entry needed to adjust the account.

On January 1,Biden,Inc.'s Work-in-Process Inventory account had a balance of $30,600.During the year,$58,300 of direct materials was placed into production.Manufacturing wages incurred amounted to $84,000,of which $64,500 were for direct labor.Manufacturing overhead is allocated on the basis of 120% of direct labor cost.Actual manufacturing overhead was $90,400.Jobs costing $220,500 were completed during the year.What is the December 31 balance of Work-in-Process Inventory?

The accounting for the allocation of overhead costs is a three-step process and occurs at three different points in the accounting cycle.List each of the three steps.For each step indicate when the step occurs and why the step is needed.

Which of the following businesses is most likely to use a process costing system?

Unlike manufacturing companies,service companies use an allocation base for allocating both direct and indirect costs.

The journal entry for adjustment of underallocated manufacturing overhead includes a ________.

Irene Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,the company estimated total manufacturing overhead costs at $1,000,000 and total direct labor costs at $820,000.In June,Job 711 was completed.The details of Job 711 are shown below. Direct materials cost \ 20,500 Direct labor cost \ 11,000 Direct labor hours 500 hours Units of product produced 200 units How much was the cost per unit of finished product? (Round any percentages to two decimal places and your final answer to the nearest cent.)

When a job order costing system is used,actual manufacturing overhead costs are debited to ________.

The journal entry to issue indirect materials to production should include a debit to the ________.

Saber Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances.Saber has four public relations specialists and office staff.At the beginning of the year,Saber estimated the total cost of salaries and benefits for the public relations specialists at $403,900 and a total of 7,100 billable hours for the year.The office and administrative costs were estimated at $675,000.The allocation base for office and administrative costs is billable hours.What rate would Saber use for allocating the cost of its office and administrative staff? (Round your answer to the nearest cent.)

Ivade,Inc.uses a predetermined overhead allocation rate of $75 per direct labor hour.In January,Ivade completed Job B23,which utilized 20 direct labor hours.Provide the journal entry to allocate overhead to the job.

Connecticut Manufacturing began business on January 1.During its first year of operation,Connecticut worked on five industrial jobs and reported the following information at year-end: Job 1 Job 2 Job 3 Job 4 Job 5 Direct Materials 2,300 8,100 4,000 3,500 1,500 Direct Labor 12,000 20,200 13,000 12,000 800 Allocated Mfg. Overhead 1,500 6,200 2,500 7,500 200 Not Job completed: Jun 30 Sep 1 Oct 15 Nov 1 completed Job sold: Jul 10 Sep 12 Not sold Not sold N/A Revenues: 44,000 42,000 N/A N/A N/A Connecticut's allocation of overhead costs left a debit balance of $1,300 in the Manufacturing Overhead account,which was adjusted to zero at year-end.What was the final balance in Cost of Goods Sold for the year ended December 31?

A job order costing system is used by companies that manufacture batches of unique products or provide specialized services.

The amount of taxes and insurance incurred and paid for the plant of a manufacturing company should be debited to the Manufacturing Overhead account.

Aaron,Inc.estimates direct labor costs and manufacturing overhead costs for the coming year to be $780,000 and $510,000,respectively.Aaron allocates overhead costs based on machine hours.The estimated total labor hours and machine hours for the coming year are 19,000 hours and 7,000 hours,respectively.What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)

Summit Financial Advisors provides accounting and finance assistance to customers in the retail business.Summit has four professionals on staff and an office with six clerical staff.Total compensation,including benefits,for the professional staff run about $731,000 per year,and it normally has about 8,500 billable hours per year.The professional staff keep detailed time sheets organized by client number.The total office and administrative costs for the year are $561,000. Summit allocates office and administrative costs to clients monthly,using a predetermined overhead allocation rate based on billable hours.During July,Summit's professionals spent 43 hours on their client.What is the total amount of cost that Summit will record for the client for the month? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

Overallocated manufacturing overhead is adjusted by debiting the Cost of Goods Sold account.

Patrick Manufacturing Systems uses job order costing and a perpetual inventory system.When recording the sale of a job,which account(s)is(are)credited?

Lakeside,Inc.estimated manufacturing overhead costs for the year at $378,000,based on 182,000 estimated direct labor hours.Actual direct labor hours for the year totaled 193,000.The manufacturing overhead account contains debit entries totaling $391,000.The Manufacturing Overhead for the year was ________.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)