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Exam 19: Job Order Cost Accounting

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Question 1

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The file of job cost sheets for completed but undelivered jobs equals the balance in the Work in Process Inventory account.

A) True
B) False

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Question 2

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Chumley Advertising Agency contracted with a company to prepare an ad campaign.Chumley uses a job order costing system.Chumley estimates that the job will take 140 designer hours at $90 per hour and 85 staff hours at $45 per hour.Chumley uses two overhead rates in applying overhead to jobs: Designer-related at $100 per designer hour and staff-related at $50 per staff hour.Determine the total estimated cost for this job.

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Question 3

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The schedule of cost of goods manufactured for a job costing system includes total actual factory overhead.

Adams Manufacturing allocates overhead to production on the basis of direct labor costs.At the beginning of the year,Adams estimated total overhead of $396,000;materials of $410,000 and direct labor of $220,000.During the year Adams incurred $418,000 in materials costs,$413,200 in overhead costs and $224,000 in direct labor costs.Compute the amount of under- or overapplied overhead for the year.

Prepare journal entries to record the following transactions and events for April using a job order costing system. (a)Purchased raw materials on credit,$69,000. (b)Raw materials requisitioned: $26,000 direct and $5,400 indirect. (c)Factory payroll totaled $46,000,including $9,500 indirect labor. (d)Paid other actual overhead costs totaling $14,500 cash. (e)Applied overhead totaling $28,200. (f)Finished and transferred jobs totaling $77,500. (g)Jobs costing $58,800 were sold on credit for $103,000.

Using the following accounts and an overhead rate of 130% of direct labor cost,compute the amount of applied overhead.

A company that produces a large number of standardized units would normally use a job order costing system.

Job A3B was ordered by a customer on September 25.During the month of September,Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor.The job was not finished by the end of the month,but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October.The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred.What is the balance in the Work in Process account at the end of September relative to Job A3B?

Under a job order costing system,individual jobs are always charged with actual overhead costs when they are transferred to finished goods.

The direct materials section of a job cost sheet shows the materials costs assigned to a job,but the direct labor section only shows the total hours of labor allocated to the job.

The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units.If the overhead applied to these goods is $3,000,and the overhead rate is 75% of direct labor,how much direct materials cost was incurred in producing these units?

Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs.Cosi expects to incur $800,000 of overhead during the next period,and expects to use 50,000 labor hours at a cost of $10.00 per hour.What is Cosi Company's overhead application rate?

When factory payroll is assigned to specific jobs,______________________ is debited.

Job order production is also known as:

When the actual overhead incurred during an accounting period is more than the overhead applied to jobs,the overhead is said to be ___________________________.

Taylor Corp.uses a job order costing system and worked only on Job 101 during the current period.Job 101 was sold for $460,000.The following information pertains to costs incurred for Job 101. Determine the amount of gross profit earned on Job 101.

A company that uses a cost accounting system normally has only two inventory accounts: Finished Goods Inventory and Work in Process Inventory.

The two basic types of cost accounting systems are:

Adams Manufacturing allocates overhead to production on the basis of direct labor costs.At the beginning of the year,Adams estimated total overhead of $396,000;materials of $410,000 and direct labor of $220,000.During the year Adams incurred $418,000 in materials costs,$413,200 in overhead costs and $224,000 in direct labor costs.Compute the amount of overhead applied to jobs during the year.

Chen Service applied overhead on the basis of direct labor costs during the current year.Overhead applied was $16,500.Actual overhead incurred was $17,200. (a)Prepare a journal entry to remove this difference assuming that it is not material. (b)Instead,assume actual overhead incurred was $24,000.Describe (without computations)the alternative procedure that Chen might assuming this difference is material.