Exam 5: Product and Service Costing: Job-Order System

Matriarch Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be $240,000 and machine hours would be 8,000. The following information pertains to November of the current year: Job 10 Job 11 Job 12 Total Work-in-process, Nov. 1 $16,000 $26,000 $38,000 $80,000 November production activity: Materials requisitioned $4,000 $4,800 $7,200 $16,000 Direct labor cost $2,400 $3,600 $4,000 $10,000 Machine hours 400 700 900 2,000 Labor hours 120 180 200 500 Actual manufacturing overhead cost incurred in November was $61,000. Required: a. Compute the predetermined overhead application rate. b. Determine the total cost associated with each job. c. If jobs 10 and 12 were completed, prepared the journal entry to move the cost. d. If job 10 was delivered to customers that paid $50,000 cash, prepare the journal entries. What is the gross profit for job 10? e. Assuming no beginning work in process, what is the cost assigned to ending work in process? f. Assuming no beginning finished goods what is the cost assigned to ending finished goods? g. How much was overhead over/underapplied?

In job-order costing, departmental overhead rates and activity-based costing affect only the application of __________ .

Figure 5-9 The Omega Company manufactures customized motors on a job-order basis. Job 492 is an order for 100 units. It requires the following: After inspection, 2 units required rework which required 8 additional direct labor hours and $60 of materials. Refer to Figure 5-9. If the rework is considered abnormal spoilage, what is the journal entry for overhead control?

Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises: Refer to Figure 5-7. What are the total overhead costs assigned to Job 4X5, assuming the Assembly and Finishing Departments use direct labor hours and machine hours for their bases, respectively?

An actual overhead rate can be calculated

Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises: Refer to Figure 5-7. What is the overhead rate for the Finishing Department based on machine hours?

Figure 5 - 8 Lamour Corporation is a job order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year. The following information about the jobs was given for April. By April 30, Jobs 102 and 103 were completed and sold. The remaining jobs were still in process. Refer to Figure 5-8. The ending work in process would consist of the costs of what jobs?

Figure 5 - 6 In the Monroe Company, the following Job cards were totaled at the end of the month: Job 243 $5,750 Job 244 $4,980 Job 245 $3,675 Job 246 $4,250 Job 247 $5,100 Job 248 $3,800 Jobs 243 and 244 were in Finished Goods Inventory at the beginning of the month. Jobs 245 and 246 were in Work-in-process at the beginning of the month. Jobs 247 and 248 were started during the month. At the end of the month, Jobs 243 and 247 were sent to customers; jobs 245, 247, and 248 were completed and sent to finished goods. Refer to Figure 5-6. What is the ending work-in-process inventory for the month?

For a manufacturer, the three inventory accounts on the balance sheet are

The uniqueness of the products or units for cost accounting purposes relates to their common costs.

__________ means that services cannot be inventoried but must be consumed when performed.

A job-order costing process would be most applicable for

Figure 5 - 8 Lamour Corporation is a job order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year. The following information about the jobs was given for April. By April 30, Jobs 102 and 103 were completed and sold. The remaining jobs were still in process. Refer to Figure 5-8. The cost of goods sold would consist of the costs of what jobs?

Process costing would be most applicable for

The cost of direct materials is assigned to a job by the use of a source document known as a

Why are unit costs important? Why do full-cost unit costs change from accounting period to accounting period.

The defective units due to the exacting nature of a particular job is called __________ .

The cost of spoilage is added to a job when it is considered to be

In __________ a single product is produced on a continuous basis.

Cost accumulation is the determination of the dollar amounts of direct materials, direct labor and overhead costs, and cost measurement is the recognition and recording of costs.