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

Jason Harmon, an employee with Nelson Products, earned a gross wage of $825 for the 50 hours he worked last week. Jason earns $15 per hour and is paid time-and-a-half for overtime. In addition, Nelson paid $100 for Jason's health insurance. The following chart shows a breakdown of Jason's time worked: Discuss how the company should allocate Jason's wage and health insurance costs to products.

Samantha's Sundries Inc. assigns overhead to specific jobs based on machine hours. At the beginning of the current year, estimated overhead costs were $400,000 and estimated machine hours were 25,000. By the end of the year, actual overhead costs were calculated to be $375,000 and actual machine hours were 30,000. By how much was overhead over- or underapplied for the year?

Which costs should be included in the calculation of the cost per equivalent unit using the weighted-average method of process costing?

Danville Manufacturing The Danville Manufacturing Company has two service departments and two production departments. The following data are available for 2011. The costs of service departments 1 and 2 are allocated on the basis of number of transactions and square feet occupied, respectively. Assuming that Danville Manufacturing Company uses the direct method of allocating service costs, the amount of service department 1 costs allocated to production department 1 would be: (If necessary, round your answer to the nearest whole number.)

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. How much total overhead was applied to products during the year?

Teresa Summerlin Teresa Summerlin manufactures hand-crafted pottery. Overhead is applied to products based on direct labor hours. At the beginning of the current year, Teresa estimated total overhead costs would be $30,000 and estimated direct labor hours would be 20,000. Actual overhead costs for the year totaled $36,000 for 18,000 actual direct labor hours. Refer to the Teresa Summerlin information above. How much overhead was applied during the year?

Which of the following statements is true regarding process costing?

Hudson Manufacturing uses process costing. The following information was available for the current year: Required:

Why do many managers desire to use a predetermined overhead rate instead of an actual overhead rate?

Rollins Manufacturing Rollins Manufacturing uses process costing. The following information was available for the current year: Refer to the Rollins Manufacturing information above. If Rollins uses the first-in, first-out (FIFO) method, how many total equivalent units were completed in the current period?

Danville Manufacturing The Danville Manufacturing Company has two service departments and two production departments. The following data are available for 2011. The costs of service departments 1 and 2 are allocated on the basis of number of transactions and square feet occupied, respectively. Assuming that Danville Manufacturing Company uses the direct method of allocating service costs, the amount of service department 2 costs allocated to producing 2 would be:

Howell Manufacturers had no units in process at the beginning of the year. During the current year, 40,000 units were started. There were 5,000 units in work-in-process at the end of the year. These units were 35% complete. If total production costs for the year were $275,625, what should be the cost per equivalent unit?

Harrelson Products uses the first-in, first-out (FIFO) method of process costing. The following information was available for the current year: Required:

Which of the following types of costs are easily tracked or traced and assigned to a specific job in a job order costing system?

Which of the following types of companies would probably not use job order costing?

Which of the following statements is true regarding the FIFO method of process costing?

A good allocation base:

Which of the following statements is false regarding process costing?

Allocation:

Which of the following should not be considered in the calculation of direct labor cost?