Exam 2: Job-Order Costing

Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The applied manufacturing overhead for the year is closest to:

The following entry would be used to record depreciation on manufacturing equipment:

Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The overhead for the year was:

Dapper Corporation had only one job in process on May 1. The job had been charged with $3,400 of direct materials, $4,640 of direct labor, and $9,200 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $23.00 per direct labor-hour. During May, the following activity was recorded: Work in process inventory on May 30 contains $7,540 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The entry to dispose of the underapplied or overapplied manufacturing overhead cost for the month would include a:

The following partially completed T-accounts summarize transactions for Farwest Corporation during the year: The Cost of Goods Manufactured was:

In a job-order cost system, direct labor is assigned to a job using information from the employee time ticket.

Bradbeer Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,500 hours. At the end of the year, actual direct labor-hours for the year were 16,000 hours, the actual manufacturing overhead for the year was $233,000, and manufacturing overhead for the year was underapplied by $15,400. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:

The following accounts are from last year's books of Sharp Manufacturing: Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of direct materials used for the year?

A proper journal entry to record issuing raw materials to be used on a job would be:

Job cost sheets are used to record the costs of preparing routine accounting reports.

Arvay Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of October. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $62,000 and the total of the credits to the account was $52,000. Which of the following statements is true?

The following partially completed T-accounts summarize transactions for Farwest Corporation during the year: The manufacturing overhead applied was:

When the predetermined overhead rate is based on direct labor-hours, the amount of overhead applied to a job is proportional to the estimated amount of direct labor-hours for the job.

The direct labor rate for Brent Corporation is $9.00 per hour, and manufacturing overhead is applied to products using a predetermined overhead rate of $6.00 per direct labor-hour. During May, the company purchased $60,000 in raw materials (all direct materials) and worked 3,200 direct labor-hours. The Raw Materials inventory (all direct materials) decreased by $3,000 between the beginning and end of May. The Work in Process inventory on May 1 consisted of one job which had been charged with $4,000 in direct materials and on which 300 hours of direct labor time had been worked. There was no Work in Process inventory on May 31. The debit to Work in Process for direct labor cost during May was:

The actual manufacturing overhead incurred at Fraze Corporation during November was $79,000, while the manufacturing overhead applied to Work in Process was $65,000. The Corporation's Cost of Goods Sold was $385,000 prior to closing out its Manufacturing Overhead account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true?

Dillon Corporation applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any under or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During May, the following transactions were recorded by the company: The balance on May 1 in the Raw Materials inventory account was:

Alden Company recorded the following transactions for the just completed month. The company had no beginning inventories. (a) $72,000 in raw materials were purchased for cash. (b) $67,000 in raw materials were requisitioned for use in production. Of this amount, $56,000 was for direct materials and the remainder was for indirect materials. (c) Total labor wages of $112,000 were incurred and paid in cash. Of this amount, $94,000 was for direct labor and $18,000 was for indirect labor. (d) Additional manufacturing overhead costs of $108,000 were incurred and paid in cash. (e) Manufacturing overhead costs of $130,000 were applied to jobs using the company's predetermined overhead rate. (f) All of the jobs worked on during the month were completed and shipped to customers. (g) The underapplied or overapplied overhead for the month was closed out to Cost of Goods Sold. Required: a. Post the above transactions to T-accounts. b. Determine the cost of goods manufactured. c. Determine the cost of goods sold (after closing Manufacturing Overhead).

Sigel Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the machine-hours for the upcoming year at 52,000 machine-hours. The estimated variable manufacturing overhead was $3.40 per machine-hour and the estimated total fixed manufacturing overhead was $624,520. Required: Compute the company's predetermined overhead rate.

On August 1, Shead Corporation had $35,000 of raw materials on hand. During the month, the company purchased an additional $56,000 of raw materials. During August, $69,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. Prepare journal entries to record these events. Use those journal entries to answer the following questions: The credits to the Raw Materials account for the month of August total:

Smallwood Corporation has provided the following data concerning manufacturing overhead for January: The Corporation's Cost of Goods Sold was $223,000 prior to closing out its Manufacturing Overhead account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true?