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Exam 27: Job Order Cost Accounting

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Question 41

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Standard cost accounting may be used with either a job order cost system or a process cost system.

A) True
B) False

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Question 42

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Indirect materials issued to production are recorded with a debit to Work in Process and a credit to Raw Materials.

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B) False

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Question 43

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Manufacturing overhead includes all of the following except

The balance in the Work in Process account as of October 31^st is the total of $35,220.

What form is used to keep track of inventory of raw materials? What additional information does the form provide if a perpetual inventory system is utilized?

What are the two principle cost accounting systems and give an example of a type of business which would use this system?

Davit Boat Building has three jobs in process in November of the current year,A1-13,R18-4,and B2-19.All three were begun on November 1^st.Job A1-13 was completed on November 21^st with total labor costs of $8,750 and total material costs of $7,725.No other jobs were completed in November.The total balance in Job R18-4 is $3,275 ($675 in materials and $2,600 in labor)and in Job B2-19 is $6,782 ($1,240 in materials and $5,542 in labor)before overhead is applied.Overhead is applied based on total direct labor dollars.Estimated total direct labor dollars for the year is $245,000 and total estimated manufacturing overhead is $367,500. Based on the information given,complete the Job Order Cost Sheet for Job A1-13.

The manufacturing overhead recorded in the Work in Process Inventory account is not necessarily the actual overhead incurred.

When a perpetual inventory system is used,the balance of the Raw Materials Inventory account at the end of an accounting period should reflect the cost of materials on hand.

A standard cost system may be used

Wilson Enterprises applies overhead based on direct labor cost.The company estimates that their overhead for the year will be $240,000,and direct labor cost to be $300,000.Actual direct labor cost for Martinez Manufacturing was $280,000 and actual overhead costs were $220,000.At the end of the year,manufacturing overhead was:

Purchases of raw materials are debited to the Work in Process Inventory account.

At the end of the year,Easton Company had a balance in Manufacturing Overhead of $20,000,and a balance in Manufacturing Overhead Applied of $19,000.When the Manufacturing Overhead account is closed,the Cost of Goods Sold account will be:

The Manufacturing Overhead Applied account for Cullverin Manufacturing had activity of $860 in indirect materials and supplies,$992 in indirect labor,and $4,654 in other overhead costs recorded in the account at April 30 of the current year.The Manufacturing Overhead Applied account had a total of $6,740 in overhead applied during April.What is the over- or underapplied overhead for April? Prepare the journal entry to close the related overhead accounts.

The following partially completed T-accounts summarize Sicondo's manufacturing costs for last year.Required: 1)Describe and identify transactions 1-6;2)Prepare the journal entry to close out the applied manufacturing overhead;3)Compute the adjusted cost of goods sold.

At the end of the month,if the total of the credits in the Manufacturing Overhead Applied account is greater than the total of the debits in the Manufacturing Overhead account,overhead has been underapplied.

At the end of each year,the underapplied or overapplied overhead is closed to the Work in Process inventory account.

The process cost accounting system is used when homogenous products are manufactured in a continuous process.

At the end of each year,the underapplied or overapplied overhead usually is closed out to the Cost of Goods Sold account.

A firm purchased 25 units of materials with a unit price of $2.00 on May 5.On May 15,the firm purchased 25 units with a unit price of $2.10.If the firm uses the LIFO method of inventory pricing,the total cost of 30 units issued on May 20 would be