Exam 4: Job Costing

Which account is credited to write off the difference between allocated and actual overhead using the proration approach?

A local accounting firm employs 27 full-time professionals.The budgeted annual compensation per employee is $40,500.The average chargeable time is 420 hours per client annually.All professional labor costs are included in a single direct-cost category and are allocated to jobs on a per-hour basis. Other costs are included in a single indirect-cost pool,allocated according to professional labor-hours.Budgeted indirect costs for the year are $781,500,and the firm expects to have 75 clients during the coming year. If ten clients are lost and the workforce stays at 27 employees,then the direct labor cost rate per hour:

Which of the following differentiates job costing from process costing?

The cost-allocation base is a systematic way to link an indirect cost or group of indirect costs to cost objects.

Work-in-Process Control will be decreased (credited)for the amount of direct-labor costs incurred.

Elite Stationary Inc.employs 20 full-time employees and 10 trainees.Direct and indirect costs are applied on a professional labor-hour basis that includes both employee and trainee hours.Following is information for 2018: What are the budgeted direct-cost rate and the budgeted indirect-cost rate,respectively,per professional labor-hour? (Round the final answers to the nearest cent. )

Apple Valley Corporation uses a job cost system and has two production departments,A and B.Budgeted manufacturing costs for the year are: The actual material and labor costs charged to Job #432 were as follows: Apple Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year. Manufacturing overhead costs allocated to Job #432 total ________.

Which of the following statements about normal costing is true?

Problems with costing occur when ________.

X-Industries manufactures 3-D printers.For each unit,$3,400 of direct material is used and there is $2,600 of direct manufacturing labor at $16 per hour.Manufacturing overhead is applied at $20 per direct manufacturing labor hour.Calculate the profit earned on 46 units if each unit sells for $9,500.

ABC Manufacturing Inc.ends the month with two jobs still in progress.Job 5 has $10,000 of materials,$2,000 of direct labor and $8,000 of manufacturing overhead allocated.Job 6 was $30,000 of materials,$2,000 of direct labor and $10,000 of manufacturing overhead allocated.The cost of goods sold for the month was $40,000 and of that 30% was overhead.There were no finished goods in stock as the month ends.If the manufacturing overhead is underallocated by $10,000,which of the following choices would be the correct way to prorate it,assuming the proration is based on the allocated overhead in the ending balances of work-in-process,finished goods,and cost of goods sold?

One reason for using longer time periods to calculate indirect-cost rates is seasonal cost fluctuations.

All costs other than direct materials and direct manufacturing labor are classified as indirect costs.

Direct costs are traced the same way for actual costing and normal costing.

An accounting firm completes an audit for a local union and has the following cost information for the year. Indirect labor $60,000 Office lease $22,000 Depreciation on office equipment $8,000 Marketing expense $20,000 Utilities $15,000 The firm's direct labor costs are budgeted at $500,000 for the year and overhead is allocated based on direct labor costs.The firm used 1 partner and 2 audit associates on the audit.Partners are paid $150 per hour while audit associates earn $50 per hour.The partner spent 6 hours on the engagement while the audit associates spent a total of 40 hours. $\text { Required: }$ What is the cost of the audit?

Indirect manufacturing costs should be allocated equally to each job.

For 2018,Winters Manufacturing uses machine-hours as the only overhead cost-allocation base.The direct cost rate is $2.00 per unit.The selling price of the product is $27.00.The estimated manufacturing overhead costs are $220,000 and estimated 20,000 machine hours.The actual manufacturing overhead costs are $225,000 and actual machine hours are 25,000.What is the profit margin earned if each unit requires two machine-hours?

________ is used to record and accumulate all the costs assigned to a specific job.

Direct materials and direct manufacturing labor become a part of work-in-process inventory on the balance sheet because the direct manufacturing labor transforms the direct materials to another asset,work-in-process inventory.

Purchases of materials are credited to materials control.