Exam 16: Costing Systems: Job Order Costing

Bear Country produces hand-carved wooden bears and uses a job order costing system.The following are data on the three jobs worked on in the company's first month of operations: Overhead cost is applied to job orders on the basis of direct labor hours at a predetermined rate of $10 per hour.The Smokey and Rocky bears were completed during the month,and the Curious bears remained in work in process at the end of the month. a.Compute the cost transferred to finished goods during the month. b.Compute the unit cost for a Rocky bear.

Explain how the unit cost information is used by managers in the management process.

Cardsheet Company The following partially completed T accounts summarize the transactions of Cardsheet Company for last year: -The indirect labor cost is

Like a job order costing system,a process costing system is restricted to one Work in Process Inventory account.

In a job order costing system,indirect labor costs incurred are debited to the Overhead account.

Under a job order costing system,the dollar amount of the entry to record the transfer of goods from Work in Process Inventory to Finished Goods Inventory is the total of the costs charged to all jobs

In a job order costing system,when the goods are sold,the Cost of Goods Sold account is increased,and the Finished Goods Inventory account is decreased for the selling price of the goods sold.

Which of the following represents the product costs on the income statement?

Jackson,CPA,entered into a cost-plus contract with Ivory Computer Services for software installation and Internet interfacing in her accounting practice.The following is Ivory Computer Services' job cost card for this job.Ivory's profit factor is 25 percent of total costs.Complete the following card,as indicated:

Which of the following cannot be learned by analyzing job order cost cards?

WinLaw is a legal services provider.It is planning to extend its operations by providing tax consultancy services.Which of the following statements will be true if the company extends its operation as planned?

In a job order costing system,a separate job order cost card is used for each individual job.

A job order costing system measures costs of each processes using an inventory account for each.

Which of the following will help mangers set reasonable selling prices?

Service organizations incur little or no cost for

Costs for individual jobs are maintained on material cost cards when job order costing is in use.

When planning,managers allocate overhead costs using either the traditional or ABC approach.

A process costing system first assigns the costs to the products manufactured by the departments,and then traces the costs of direct materials,direct labor,and overhead to departments.

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

When Smith Builder's Designer House #201 is completed,Smith's