Exam 20: Costing Systems: Job Order Costing

The balance in the Work in Process Inventory account on April 1 was $25,000, and the balance on April 30 was $22,600. Costs incurred during the month were as follows: direct materials, $41,250; direct labor, $21,300; and overhead, $32,600. What amount was transferred to the Finished Goods Inventory account for April?

In a job order costing system, when overhead costs are applied, they increase the Work in Process Inventory account.

Which of the following is not a characteristic of a process costing system?

Job order costing is used by companies that make large or unique products.

A process costing system accounts for product costs

The ending balance in the Work in Process Inventory account is supported by individual Overhead account balances.

The balance in the Work in Process account equals the

Dyana Julian, president of Julian Juices, Inc., has approached you with the following questions: Why must we use the process costing method to compute product unit costs for three lines of fruit juices? Why can't we consider using a job order costing approach? Prepare a written response to Ms. Julian.

The production process determines the product costing system needed.

A job order cost card is a type of subsidiary ledger.

G. M. Richardson, CPA, entered into a cost-plus contract with Ivey Computer Services for software installation and Internet interfacing in her accounting practice. The following is Ivey Computer Services' job cost card for this job. Ivey's profit factor is 30 percent of total costs. Complete the following card, as indicated:

In a process costing system, product costs are traced to individual products.

If there is a credit balance in the Factory Payroll Payable at the end of the accounting period, it represents

Applied overhead exceeds actual overhead when the

Which of the following accurately describes a difference between job order and process costing systems?

Unlike a job order costing system, a process costing system is not restricted to one Work in Process Inventory account.

The following information is available at the end of May: If $72,400 of materials were charged to Job 88's job cost card, how much overhead was applied to Job 88?

If applied overhead exceeds actual overhead, cost of goods sold must be reduced by the amount of the overcharge in a job order costing system.

A zero balance in Finished Goods Inventory at the start of the period means all previously completed products have been shipped.

Process costing is applicable to production operations that