Exam 17: Job Order Cost Systems and Overhead Allocations

Job order cost system Continental Company uses a job order cost accounting system. During March, three jobs were completed and the costs were computed as follows: job no. 1, $89,000; job no. 2, $58,800; job no. 3, $54,000. As of March 31, the following amounts had been charged to the Work in Process Inventory controlling account in the general ledger: Work in Process Inventory Balance, Mar. l 33,800 Direct labor 48,000 Manufacturing overhead 83,200 Direct materials 72,000 (a) Prepare the general journal entry to reflect the jobs completed during March: Debit Credit (b) Compute the cost of the unfinished jobs at March 31. $___________

The Work in Process account in a job order cost accounting system will be debited for:

An effective cost accounting system should match processes with the _____ used in order to maintain competitive advantage. Select the best answer to complete the sentence.

Which of the following are true regarding activity-based costing?

What is the finished goods inventory at November 30? $___________

The predetermined overhead application rate at Capri Boat is what percentage of direct labor costs?

Application of overhead Pyramid Corporation manufactures a single product. As a basis for determining an overhead application rate, the production manager made the following estimates for the coming year: In the following month, 19,500 units were produced, involving direct labor costs of $78,000 and requiring 1,073 machine-hours. Determine the amount of manufacturing overhead to be applied to production during this month, assuming that the overhead application rate is based upon: (a) Estimated total direct labor cost for the year. $____________ (b) Estimated total machine-hours for the year. $____________

The type of cost accounting system best suited to a particular company depends on:

If Custom Craft uses a job order cost system, each of the following is true except:

What are the setup costs allocated to Strollers during the current month?

Using machine hours to assign manufacturing overhead to a labor intensive product line is likely to:

An increase in an activity base must cause an increase in actual overhead costs incurred for that base to be considered a cost driver.

What is the finished goods inventory at October 31? $___________

The two steps required in activity-based costing are identifying separate activity cost pools and allocating each cost pool to the product using an appropriate cost driver.

Selecting an activity base Listed below are six activity cost pools used by the Keaton Corporation: Heating costs Machinery power costs Machinery set-up costs Equipment maintenance costs Materials storage costs Purchasing department costs Listed below are six activity bases used by Keaton to allocate manufacturing overhead costs to products. In the space provided next to each activity base, indicate for which of the above cost pools it is a cost driver. _______ (a) Number of equipment work orders related to each product line. _______ (b) Number of direct material purchase orders related to each product line. _______ (c) Number of production runs related to each product line. _______ (d) Square feet of direct materials warehouse space occupied by each product line. _______ (e) Number of machine hours required to produce each product line. _______ (f) Square feet of production space occupied by each product line.

An activity base is said to be a "driver" of overhead costs when the activity base:

What are the total manufacturing overhead costs allocated to the Strollers for the current month?

Benefits of activity-based costing include all of the following except:

When job costing is in use, under-applied overhead:

Metalworks Incorporated purchased $54,500 worth of direct materials to be used in Job #222. During the accounting period, Job #222 used $45,600 of direct materials. The amount of direct materials that would be shown in Job #222 Job Cost Sheet at the end of the accounting period should be $54,500, since this is the amount of direct materials the company had purchased for this particular job.