Exam 2: Job-Order Costing

Parsons Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, Parsons Corporation incurred $250,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was overapplied $12,000 for the year. If the predetermined overhead rate was $8.00 per direct labor-hour, how many hours did the Corporation work during the year?

Aksamit Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: The predetermined overhead rate for the recently completed year was closest to:

Chelm Music Corporation manufactures violins, violas, cellos, and fiddles and uses a job-order costing system. What account should Chelm debit when the production manager has earned her salary?

During October, Beidleman Inc. transferred $52,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $55,000. The journal entries to record these transactions would include a:

On the Schedule of Cost of Goods Manufactured, the final Cost of Goods Manufactured figure represents:

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 debits entered in the Raw Materials account during the month of August total:

Caber Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $60,600. Actual manufacturing overhead for the year amounted to $59,000 and actual machine-hours were 5,900. The company's predetermined overhead rate for the year was $10.10 per machine-hour. The overhead for the year was:

Donham Corporation had $25,000 of raw materials on hand on May 1. During the month, the Corporation purchased an additional $65,000 of raw materials. During May, $66,000 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 $4,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total:

During December, Mccroskey Corporation incurred $66,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $69,000. Required: Prepare journal entries to record the incurrence of manufacturing overhead and the application of manufacturing overhead to Work in Process.

In a job-order costing system, the use of indirect materials that have been previously purchased is recorded as a credit to:

Kaleohano Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of July. 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 $73,000. Which of the following statements is true?

CR Corporation has the following estimated costs for the next year: CR Corporation estimates that 20,000 labor-hours will be worked during the year. If overhead is applied on the basis of direct labor-hours, the overhead rate per hour will be:

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 cost of goods manufactured for May was:

Echo Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company's Finished Goods inventory account was debited for $360,000 and credited for $338,800. The ending balance in the Finished Goods inventory account was $36,600. At the end of the year, manufacturing overhead was overapplied by $15,900. The balance in the Finished Goods inventory account at the beginning of the year was:

Messana Corporation reported the following data for the month of August: The cost of goods manufactured for August is:

During December, Deller Corporation purchased $79,000 of raw materials on credit to add to its raw materials inventory. A total of $68,000 of raw materials was requisitioned from the storeroom for use in production. These requisitioned raw materials included $4,000 of indirect materials. Required: Prepare journal entries to record the purchase of materials and their use in production.

If direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor hours, then jobs with high direct labor requirements will tend to be undercosted relative to jobs with low direct labor requirements.

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 entry to dispose of the under or overapplied manufacturing overhead cost for the month would include:

Overapplied manufacturing overhead means that:

When completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Finished Goods.