Exam 3: Job Costing, Process Costing, and Operations Costing

Greenlaw Products uses job order costing and applies overhead to products using direct labor hours. Greenlaw has determined that their predetermined overhead is $4.00 per direct labor hour when an estimated 200,000 direct labor hours are incurred. During 2011 Greenlaw actually incurred a total of 215,000 direct labor hours and actual overhead costs ended up being $900,000. Greenlaw has no ending work-in-process or finished goods inventories. Required:

Nelson Manufacturing applies overhead to its manufactured products based on direct labor hours. Last year, total overhead costs were estimated to be $108,900. Actual overhead costs ended up totaling $115,000 when 10,000 direct labor hours were actually worked. At the end of the year, overhead was overapplied by $6,000. What was the predetermined overhead rate that must have been used during the year?

Griffin Manufacturing uses job order costing to measure and track the costs incurred for specific jobs. Griffin has determined that direct labor cost drives its manufacturing overhead costs. During the month of August, the following data were available for Job #45: If total overhead costs during the month totaled $4,000 when a total of $20,000 in direct labor costs were incurred, what will be the total manufacturing cost of Job #45?

Which of the following would not be included on a job cost report?

Which of the following would be classified as a service department?

Which type(s) of cost(s) are accumulated, tracked, and assigned to products when a company uses process costing?

Presley Products Inc. is a manufacturer of limited edition dolls. They use operations costing to measure and track the costs incurred for specific product lines. While most of the products do require some machine time, Presley has determined that direct labor hours drive its manufacturing overhead costs. During the month of April, the following data were available for a particular line of dolls: If total overhead costs during the month totaled $25,000 when a total of 50,000 direct labor hours were worked, what will be the total manufacturing cost for this line of dolls?

George Wilson is an assembly-line worker for Gantt Manufacturing. Gantt pays its employees weekly. The following is a breakdown of all the labor costs traced to George for the previous week: Last week, George spent the entire 45 hours he worked on a special order "rush" job for a particular customer. The overtime was necessary in order to complete the job from start to finish within one week. Assuming that George was the only employee who worked directly on this job, how much direct labor cost should be assigned to the job?

You enjoy making cakes and pastries and have decided to open up a small bakery across from campus. You plan on making a variety of baked items, probably a couple of different batches each day since the processes differ for each variety. You recall from your managerial accounting class that product costing is important and that there are a few different choices in determining product costs.

Giles Inc. Giles Inc. manufactures high quality golfing equipment. Giles assigns overhead to products based on machine hours. At the beginning of the current year, estimated overhead costs were $500,000 and estimated machine hours were 50,000. During the year, 54,000 machine hours were actually used. By the end of the year, actual overhead costs were calculated to be $529,200. Refer to the Giles Inc. information above. By how much was overhead over- or underapplied for the year?

Companies that produce a homogeneous product where all the units are the same would most likely use which type of costing?

Which of the following costs is the most likely to beallocated to a product in a traditional job costing environment?

Which of the following statements about service department costs is not true?

Bost Products Inc. Bost Products Inc. manufactures plastic products and uses process costing to account for the cost of products manufactured. All product costs are added evenly throughout the production process. The following information was available for the plastic department for the month of December: Refer to the Bost Products Inc. information above. If Bost uses the first-in, first-out (FIFO) method of computing equivalent units and assigning product costs, what is the cost per equivalent unit? (round to nearest penny)

What is the purpose of a job cost report and what are some of the items that should be found on one?

In its initial year of operation, Montoya Manufacturing started and completed 4,000 identical widgets and had 1,000 widgets that were 40% complete in work-in-process at the end of the year. Total production costs for the year were $55,000. What was the equivalent units of production during the year?

Why do companies develop estimates for overhead costs? How are estimates developed?

Maria's Custom Tailoring is very labor intensive. Therefore, Maria has decided to use direct labor hours as the cost driver for assigning overhead costs to specific jobs. During the month of February, the company incurred overhead costs of $4,800. Total direct labor hours during the month totaled 1,200. Out of a total of 45 different jobs worked on during the month, Job #115 required 16 direct labor hours to complete and Job #195 required 15 direct labor hours. The total amount of overhead allocated to these two jobs is:

Sherrell Inc. applies overhead using direct labor hours. The following data are available for the year: At the end of the year, it was determined that overhead was overapplied by $40,000. Required:

Which of the following statements is correct regarding fringe benefits earned by employees whose regular wages are normally classified as direct labor?