Exam 4: Job Costing

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: Direct materials \ 60,000 WIP 190,000 Finished goods Total \ 500,000 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.

When manufacturing overhead is allocated to jobs,the Manufacturing Overhead Allocated account is debited.

Innovative Metal Products Company manufactures pipes and applies manufacturing costs to production at a budgeted indirect-cost rate of $12 per direct labor-hour.The following data are obtained from the accounting records for June 2018: Required: a.What actual amount of manufacturing overhead costs was incurred during June 2018? b.What amount of manufacturing overhead was allocated to all jobs during June 2018? c.For June 2018,was manufacturing overhead underallocated or overallocated? Explain.

The ending balance in Work-in-Process Control represents the total costs of all jobs that have NOT yet been completed.

Process costing ________.

The Dougherty Furniture Company manufactures tables.In March,the two production departments had budgeted allocation bases of 4,000 machine-hours in Department 100 and 8,000 direct manufacturing labor-hours in Department 200.The budgeted manufacturing overheads for the month were $57,500 and $62,500,respectively.For Job A,the actual costs incurred in the two departments were as follows: Job A incurred 800 machine-hours in Department 100 and 300 manufacturing labor-hours in Department 200.The company uses a budgeted overhead rate for applying overhead to production. Required: a.Determine the budgeted manufacturing overhead rate for each department. b.Prepare the necessary journal entries to summarize the March transactions for Department 100. c.What is the total cost of Job A?

Whether a company chooses to use either a job ob costing system or process costing system depends on the nature of the product or service - whether the products or services are heterogeneous or homogeneous.

The Salaries Payable Control account has underlying subsidiary ledgers.

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

Process costing is ________.

James Ford an architect charges $150 per hour for his time spent drawing blueprints for clients.His budgeted annual cost to run his office is $12,000 a year (rent and utilities)and he allocates these indirect costs based on direct labor hours.Ford predicts that he will work about 1,000 billable hours per year for his clients.Recently,Ford completed a set of blueprints for a garage for one of his clients and involving 30 hours of work,How much indirect costs should ford allocate to the garage blueprints job when considering how much to charge his client and cover his costs?

In a job-costing system the cost object is an individual unit,batch,or lot of a distinct product or service.

The spreading of underallocated or overallocated overhead among ending work-in-process,finished goods,and cost of goods sold is called ________.

Jacobs Company manufactures refrigerators.The company uses a budgeted indirect-cost rate for its manufacturing operations and during 2018 allocated $1,000,000 to work-in-process inventory.Actual overhead incurred was $1,100,000. Ending balances in the following accounts are: Work-in-Process \ 100,000 Finished Goods 750,000 Cost of Goods Sold 4,150,000 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.

Advantage Inc.employs 29 professional cleaners.Budgeted costs total $1,955,000 of which $1,702,000 is direct costs.Budgeted indirect costs are $839,500 and actual indirect costs were $795,600.Budgeted professional labor-hours are 1,150,000 and actual hours were 1,221,875.What is the budgeted direct cost-allocation rate?

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.

Which account is debited if materials costing $100,000 are sold?

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

Direct costs ________.

To smooth fluctuating levels of output,separate indirect-cost rates should be calculated for each month.