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Exam 20: Job Order Costing

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Question 21

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Spencer Inc. applies overhead to production at a predetermined rate of 80% based on direct labor cost. Job No. 130, the only job still in process at the end of August, has been charged with manufacturing overhead of $3,000. What was the amount of direct materials charged to Job 130 assuming the balance in Work in Process inventory is $12,000?

A) $3,000.
B) $3,750.
C) $5,250.
D) $12,000.

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Question 22

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The existence of under- or overapplied overhead at the end of the year:

A) requires an adjustment to Cost of Goods Sold.
B) indicates that an error has been made.
C) requires a retroactive adjustment to the cost of all jobs completed.
D) is written off as a bad estimate expense.

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Question 23

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When raw materials are received, there no effort at this point to associate the cost of materials with specific jobs.

The labor costs that have been identified as indirect labor should be charged to

Jensen Manufacturing Company makes specialty tools. In January, Jensen incurs manufacturing costs of $10,000,000 for direct materials, direct labor, and overhead. 20% of the total costs represents overhead applied. The overhead rate is $1 for every $2 of direct labor costs incurred. Inventory balances were: At the end of January, there was $1,000 of overapplied overhead. Instructions (a) Determine the cost of raw materials purchased in January. (b) Prepare a cost of goods manufactured schedule for January 2010. (c) Compute the cost of goods sold for January.

When goods are sold, the Cost of Goods Sold account is debited and Work in Process Inventory account is credited.

Overapplied manufacturing overhead exists when overhead assigned to work in process is

Cost of goods manufactured equals $55,000 for 2010. Finished goods inventory is $2,000 at the beginning of the year and $5,500 at the end of the year. Beginning and ending work in process for 2010 are $4,000 and $5,000, respectively. How much is cost of goods sold for the year?

For Wilton Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $350,000 of factory labor costs are incurred of which $100,000 is indirect labor. Actual overhead incurred was $180,000. The amount of overhead debited to Work in Process Inventory should be:

The flow of costs in a job order cost system

The two major steps in the flow of costs are

Selected accounts of Kosar Manufacturing Company at year end appear below: Instructions Explain the probable transaction that took place for each of the items identified by letters in the accounts. For example: (a) Raw materials costing $40,000 were purchased.

As of December 31, 2010, Stand Still Industries had $2,500 of raw materials inventory. At the beginning of 2010, there was $2,000 of materials on hand. During the year, the company purchased $305,000 of materials; however, it paid for only $292,500. How much inventory was requisitioned for use on jobs during 2010?

Conceptually, any under- or overapplied overhead at the end of the year should be allocated among all of the following except

Greer Company developed the following data for the current year: How much is Greer Company's direct labor cost for the year?

Gulick Company developed the following data for the current year: Gulick Company's direct labor cost for the year is

An important feature of a job order cost system is that each job

Raw Materials Inventory, Factory Labor, and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used.

Job cost sheets constitute the subsidiary ledger for the

Total manufacturing costs for a period consists of the costs of direct materials used, the cost of direct labor incurred, and the manufacturing overhead applied during the period.