Exam 3: Job-Order Costing

Cacioppo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year.At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 66, 000 labor-hours.The estimated variable manufacturing overhead was $7.45 per labor-hour and the estimated total fixed manufacturing overhead was $1, 760, 220.The actual labor-hours for the year turned out to be 63, 800 labor-hours. Required: Compute the company's predetermined overhead rate for the recently completed year.

The Lee Corporation uses a job-order costing system.The following data were recorded for June: Overhead is charged to production at 80% of direct materials cost.Jobs 235, 237, and 238 were completed during June and transferred to finished goods.Jobs 235 and 238 have been delivered to customers.Actual manufacturing overhead was equal to manufacturing overhead applied.There were no Work in Process or Finished Goods inventories at the beginning of June. Lee's Work in Process inventory balance on June 30 was:

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:

Raskin Inc.uses job-order costing.In September, the company charged the following costs to jobs: direct materials, $25, 000;direct labor, $56, 000;and manufacturing overhead cost applied, $54, 000.The beginning work in process inventory was $24, 000 and the ending work in process inventory was $23, 000. Required: Determine the cost of goods manufactured for September.Show your work!

Kapanga Manufacturing Corporation uses a job-order costing system and started the month of October with a zero balance in its work in process and finished goods inventory accounts.During October, Kapanga worked on three jobs and incurred the following direct costs on those jobs: Kapanga applies manufacturing overhead at a rate of 150% of direct labor cost.During October, Kapanga completed Jobs B18 and B19 and sold Job B19. What is Kapanga's work in process inventory balance at the end of October?

The Lee Corporation uses a job-order costing system.The following data were recorded for June: Overhead is charged to production at 80% of direct materials cost.Jobs 235, 237, and 238 were completed during June and transferred to finished goods.Jobs 235 and 238 have been delivered to customers.Actual manufacturing overhead was equal to manufacturing overhead applied.There were no Work in Process or Finished Goods inventories at the beginning of June. Lee Corporation's cost of goods sold for June was:

Hasting Inc.uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month.In January the company completed job R96V that consisted of 21, 000 units of one of the company's standard products.No other jobs were in process during the month.The job cost sheet for job R96V shows the following costs: During the month, the actual manufacturing overhead cost incurred was $345, 030 and 15, 000 completed units from job R96V were sold.No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead)for January is closest to:

Toan Inc.uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month.In September the company completed job S80M that consisted of 23, 000 units of one of the company's standard products.No other jobs were in process during the month.The job cost sheet for job S80M shows the following costs: During the month, the actual manufacturing overhead cost incurred was $270, 020 and 3, 000 completed units from job S80M were sold.No other products were sold during the month. The cost of goods sold that would appear on the income statement for September, after adjustment for any underapplied or overapplied overhead, is closest to:

In a job-order cost system, which of the following events would trigger recording data on a job cost sheet?

Predetermined overhead rates are based on estimated cost and activity data.

Hasting Inc.uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month.In January the company completed job R96V that consisted of 21, 000 units of one of the company's standard products.No other jobs were in process during the month.The job cost sheet for job R96V shows the following costs: During the month, the actual manufacturing overhead cost incurred was $345, 030 and 15, 000 completed units from job R96V were sold.No other products were sold during the month. The cost of goods sold that would appear on the income statement for January, after adjustment for any underapplied or overapplied overhead, is closest to:

Huckeby Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year.Data for the upcoming year appear below: Required: Compute the company's predetermined overhead rate.

The labor time ticket contains a detailed summary of the direct and the indirect labor hours of an employee.

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:

Clear Colors Company uses a predetermined overhead rate based on direct labor costs to apply manufacturing overhead to jobs.At the beginning of the year the company estimated its total manufacturing overhead cost at $350, 000 and its direct labor costs at $200, 000.The actual overhead cost incurred during the year was $362, 000 and the actual direct labor costs incurred on jobs during the year was $208, 000.The manufacturing overhead for the year would be:

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 predetermined overhead rate is closest to:

Toan Inc.uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month.In September the company completed job S80M that consisted of 23, 000 units of one of the company's standard products.No other jobs were in process during the month.The job cost sheet for job S80M shows the following costs: During the month, the actual manufacturing overhead cost incurred was $270, 020 and 3, 000 completed units from job S80M were sold.No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead)for September is closest to:

Parker Corporation has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at $50, 000 and 20, 000 hours, respectively.In June, Job #461 was completed.Materials costs on the job totaled $4, 000 and labor costs totaled $1, 500 at $5 per hour.At the end of the year it was determined that the company worked 24, 000 direct labor-hours for the year and incurred $54, 000 in actual manufacturing overhead costs. If Job #461 contained 100 units, the unit product cost on the completed job cost sheet would be:

Ending finished goods inventory in a single product company equals the number of units in ending inventory less the number of units in beginning inventory, multiplied by their unit product cost.

Baab Corporation is a manufacturing firm that uses job-order costing.The company's inventory balances were as follows at the beginning and end of the year: The company applies overhead to jobs using a predetermined overhead rate based on machine-hours.At the beginning of the year, the company estimated that it would work 33, 000 machine-hours and incur $231, 000 in manufacturing overhead cost.The following transactions were recorded for the year: • Raw materials were purchased, $315, 000. • Raw materials were requisitioned for use in production, $307, 000 ($281, 000 direct and $26, 000 indirect). • The following employee costs were incurred: direct labor, $377, 000;indirect labor, $96, 000;and administrative salaries, $172, 000. • Selling costs, $147, 000. • Factory utility costs, $10, 000. • Depreciation for the year was $127, 000 of which $120, 000 is related to factory operations and $7, 000 is related to selling, general, and administrative activities. • Manufacturing overhead was applied to jobs.The actual level of activity for the year was 34, 000 machine-hours. • Sales for the year totaled $1, 253, 000. Required: a.Prepare a schedule of cost of goods manufactured. b.Was the overhead underapplied or overapplied? By how much? c.Prepare an income statement for the year.The company closes any underapplied or overapplied overhead to Cost of Goods Sold.