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Exam 2: Job Order Costing and Analysis

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Question 41

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Lock Co. applies factory overhead to production on the basis of direct labor costs. Assume that at the beginning of the current year the company estimated that direct material costs would be $178,800, direct labor costs would be $154,000, and factory overhead costs would be $231,000. (1) If the $28,000 cost of Lock's Work in Process Inventory included $5,200 of direct labor cost, what amount of direct materials cost was included? (2) If instead $8,100 of the company's $34,300 Finished Goods Inventory was direct materials cost, determine the direct labor cost and factory overhead cost of the finished goods inventory.

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Direct labor + 1.5 (Direct La...

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Question 42

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The journal entry to record direct materials used includes a debit to Work in Process Inventory.

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Question 43

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The target cost for a job using job costing is calculated as:

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.

A time ticket is a source document used to record the total number of hours worked and serves as a source document for entries to record direct labor costs.

There are two basic types of cost accounting systems: job order costing and periodic costing.

Factory overhead is often collected and summarized in a subsidiary factory overhead ledger.

Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 was direct and $73,000 was indirect supervisory costs. The correct journal entry to record the $73,000 indirect labor for the month is:

If actual overhead incurred during a period exceeds applied overhead, the difference will be a credit balance in the Factory Overhead account at the end of the period.

Job order costing would be appropriate for companies that produce pencils.

A ________ accounting system accumulates production costs and assigns them to products or services.

How do manufacturing firms adjust the overapplied or underapplied factory overhead account at the end of an accounting period?

Overapplied overhead should be ________ to the Cost of Goods Sold account when closed.

Finished goods inventory is $190,000. If overhead applied to these goods is $72,000, and the overhead rate is 120% of direct labor, how much direct materials cost was incurred in producing the inventory?

The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:

A company that uses a job order costing system would make the following entry to record the flow of direct materials into production:

A document in a job order costing system that is used to record the costs of producing a job is a(n) :

The total costs on job cost sheets for jobs that are not yet completed equals the balance in the Finished Goods Inventory account.

Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. What amount will Andrew debit to Work in Process Inventory for the month of March?

Portside Watercraft uses a job order costing system. During one month Portside purchased $173,000 of raw materials on credit; issued materials to production of $164,000, of which $24,000 were indirect. Portside incurred a factory payroll cost of $95,000, of which $25,000 was indirect labor. Portside uses a predetermined overhead rate of 170% of direct labor cost. The journal entry to record the issuance of materials to production is: