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Exam 19: Job Order Cost Accounting

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Question 31

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Minstrel Manufacturing uses a job order costing system.During one month Minstrel purchased $198,000 of raw materials on credit;issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,paid in cash,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.The journal entry to record payment of the factory payroll is:

A) Debit Work in Process Inventory $150,000;credit Factory Wages Payable $150,000.
B) Debit Work in Process Inventory $150,000;credit Cash $150,000.
C) Debit Factory Wages Payable $150,000;credit Cash $150,000.
D) Debit Work in Process Inventory $110,000;debit Factory Overhead $40,000;credit Factory Wages Payable $150,000.
E) Debit Work in Process Inventory $110,000;debit Factory Overhead $40,000;credit Cash $150,000.

F) B) and C)
G) B) and D)

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Question 32

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A perpetual record of a raw materials item that records data on the quantity and cost of units purchased,units issued for use in production,and units that remain in the raw materials inventory,is called a(n) :

A) Materials ledger card.
B) Materials requisition.
C) Purchase order.
D) Materials voucher.
E) Purchase ledger.

F) None of the above
G) A) and C)

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Question 33

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At the current year-end,Simply Company found that its overhead was underapplied by $2,500,and this amount was not considered material.Based on this information,Simply should

Dallas Company uses a job order costing system.The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period.At the end of the period,the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs.Using direct labor hours as a base,what was the predetermined overhead rate?

Cost accounting systems accumulate costs and then assigns them to products or services.

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 direct materials and $13,000 indirect materials.What journal entry should Andrew use to account for direct materials used in March?

Clemmens Company applies overhead based on direct labor cost.Estimated overhead and direct labor costs for the year were $112,500 and $125,000,respectively.During the year,actual overhead was $107,400 and actual direct labor cost was $120,000.The entry to close the over- or underapplied overhead at year-end,assuming an immaterial amount,would include:

Oddley Corp.uses a job order costing system.The following is selected information pertaining to costs applied to jobs during the year: Oddley Corp.'s predetermined overhead rate is 60% of direct labor cost.At the end of the year,the company's records show that $189,000 of factory overhead has been incurred. (a)Determine the amount of overapplied or underapplied overhead. (b)Prepare the necessary journal entry to close the Factory Overhead account assuming that any remaining balance is not material.

The collection of job cost sheets for all jobs in process makes up the subsidiary ledger controlled by the _____________________ inventory.

In a job order costing system,raw materials requisitioned as direct materials are debited to __________________;indirect materials are debited to ________________. Answers must appear in this order.

The following information is available for the Annum Corporation for the current year: Annum Company uses a predetermined overhead rate of 150% of direct labor cost.Prepare journal entries for the following transactions and events: (a)Purchase of raw materials on account. (b)Assignment of materials costs to Work in Process Inventory and Factory Overhead. (c)Assignment of Factory Payroll to Work in Process Inventory and Factory Overhead. (d)Recording of other factory overhead.Assume that all items other than depreciation are paid in cash. (e)Assignment of Factory Overhead to Work in Process Inventory. (f)Transfer of goods completed to Finished Goods Inventory. (g)Recording cost of goods sold. (h)Assignment of over- or underapplied overhead to Cost of Goods Sold.

Kayak Company uses a job order costing system and allocates its overhead on the basis of direct labor costs.Kayak Company's production costs for the year were: direct labor,$30,000;direct materials,$50,000;and factory overhead applied $6,000.The overhead application rate was:

When factory payroll for indirect labor is assigned,__________________ is debited.

Job cost sheets are used to track all of the costs assigned to a job,including direct materials,direct labor,overhead,and all selling and administrative costs.

The following calendar year information about the Tchulahota Corporation is available on December 31: The company applies overhead on the basis of 125% of direct labor costs.Calculate the amount of over- or underapplied overhead.

Minstrel Manufacturing uses a job order costing system.During one month Minstrel purchased $198,000 of raw materials on credit;issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,paid in cash,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.The journal entry to record the issuance of materials to production is:

At the end of June,the job cost sheets for Kennedy Manufacturing show the following total costs accumulated on three custom jobs. Job 203 was started in production in May and the following costs were assigned to it in May: direct materials,$12,000;direct labor,$6,000;and overhead $8,700.Jobs 204 and 205 are started in June.Overhead cost is applied with a predetermined rate based on direct labor cost.Jobs 203 and 204 are finished in June,and Job 205 will be finished in July.No raw materials are used indirectly in June.Using this information,answer the following questions assuming the company's predetermined overhead rate did not change. a.What is the cost of the raw materials requisitioned in June for each of the three jobs? b.How much direct labor cost is incurred during June for each of the three jobs? c.What predetermined overhead rate is used during June? d.How much total cost is transferred to finished goods during June?

_______________________,or customized production,produces products in response to customer orders.

In a job order costing system,indirect labor costs are debited to the Factory Overhead account.

Minstrel Manufacturing uses a job order costing system.During one month Minstrel purchased $198,000 of raw materials on credit;issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,paid in cash,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead application rate of 150% of direct labor cost.If Minstrel incurred total overhead costs of $167,800 during the month,compute the amount of under- or overapplied overhead: