Exam 5: Job-Order Costing

In a process costing environment,equivalent unit costs are computed by dividing the process costs for the given period by the output of the period.

Consider two costing systems,normal costing and actual costing. A. Which costing system do most firms use to assign costs to units of product or service? What does this costing system include? B. What is the other costing system? What does this costing system include?

There are two major types of companies: those that use a job-order costing system and those that use process-costing systems. A. Explain the differences between the two types of systems. B. List 3 examples of each type of company.

Overhead costs are assigned to work in process using a predetermined rate.

Which of the following is a characteristic of actual overhead using normal costing?

Which account is usually credited when the work-in-process account is debited for direct labour?

Match each item with the correct statement below. -The amount by which applied overhead exceeds actual overhead

In an actual cost system,actual direct materials,actual direct labour and actual overhead are used to calculate the unit cost.

The journal entry for $17 of underapplied overhead is: Cost of Goods Sold 17 Applied Overhead 17

The BeautyWorks Corporation manufactures custom-made purses.The following data pertains to Job AAA: Factory overhead is applied using a plantwide rate that is based on direct labour hours.Factory overhead was budgeted at $120,000 for the year,and the direct labour hours were estimated to be 30,000.Job AAA consists of 50 units.What is the overhead cost assigned to Job AAA? Direct materials placed into production \ 4,000 Direct labour hours worked 60 hours Direct labour rate per hour \ 15 Machine hours worked 100 hours

Rally Point Inc. designs and builds volleyball gymnasiums. Each gymnasium is custom-built to an individual customer's specifications. Rally Point uses job-order costing to track its costs. In January, Rally Point worked on three jobs. Data for these jobs are as follows: Overhead is applied to jobs at the rate of $25 per machine hour. By January 31, Job 200 is the only job unfinished. The balance of finished goods on January 1 is $63,290 (consisting of Job 100 only). Jobs 100 and 300 are sold during January. Rally Point sells its product at cost plus 40%. Job 100 Job 200 Job 300 Balance 1/1 \ 13,790 \ 0 \ 0 Direct Materials 16,200 8,500 30,500 Direct Labour Cost 23,300 7,600 45,000 Machine Hours 400 300 2,000 -Refer to the Figure.What is the cost of goods sold for February?

Blackfoot Softball Glove Company estimated the following yearly data at the beginning of the year: Blackfoot uses departmental overhead rates. In the assembly department, direct labour hours are used to apply overhead. Machine hours are used to apply overhead in the testing department. Actual data for August are as follows: Assembly Department Testing Department Total Overhead \ 570,000 \ 130,000 \ 700,000 Direct Labour Hours 142,500 32,500 175,000 Machine Hours 32,000 65,000 97,000 Assembly Department Testing Department Total Overhead \ 42,000 \ 12,000 \ 54,000 Direct Labour Hours 13,500 2,430 15,930 Machine Hours 4,020 11,000 15,020 -Refer to the Figure.Which of the following best represents the departmental overhead rates?

Answers may be used more than once. -Form filled out by each employee every day

Valley Water Slides makes custom water slides for hotels. On September 1, three jobs were in process: Jobs 812, 813, and 814. Two more jobs, Jobs 815 and 816, were started during September. By September 30, Jobs 812, 814, and 816 were finished. The following data were collected: Overhead is applied at the rate of 120% of direct labour cost. Jobs are sold at cost plus 60%. Selling and administrative expenses for September totalled $2,950. By September 30, Jobs 812 were 816 are sold, but the customer who ordered Job 814 cancelled the order so the slide is still in the warehouse. Job 812 Job 813 Job 814 Job 815 Job 816 9/1 ance \ 615 \ 830 \ 945 \ldots \ldots Direct Materials 750 235 1,280 \ 200 \ 915 Direct Labour 420 115 560 320 875 -Refer to the Figure.Suppose the beginning balance of finished goods was $0.What is the ending balance of finished goods?

Which of the following source documents would NOT be used to help decide the cost of a job?

Which of the following is characteristic of costing?

Company, Inc. applies overhead on the basis of direct labour hours. At the beginning of the year, Company, Inc. estimates overhead to be $540,000, machine hours to be 150,000, and direct labour hours to be 90,000. During January, Company, Inc. has 8,000 direct labour hours and 12,000 machine hours. -Refer to the Figure.What is the overhead applied for January?

How are unit costs calculated?

Answers may be used more than once. -Form prepared every time a new job is started

Answers may be used more than once. -Form that asks for the type,quantity,and unit price of direct materials