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Exam 2: Job-Order Costing

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Question 21

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When materials are placed into production:

A) Raw Materials Inventory is debited if the materials are traced directly to the job.
B) Work in Process Inventory is debited if the materials are traced directly to the job.
C) Manufacturing Overhead is debited if the materials are traced directly to the job.
D) Raw Materials Inventory is credited only if the materials are traced directly to the job, otherwise manufacturing overhead is crediteD.
When direct materials are placed into production, the cost is transferred from Raw Materials Inventory (with a credit) to Work in Process Inventory (with a debit) .

E) A) and D)
F) None of the above

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Question 22

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When units are sold, the cost associated with the units is debited to which account?

A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold

E) None of the above
F) A) and B)

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Question 23

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Cadburn Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Cadburn Corp. estimated total manufacturing overhead cost at $250,000 and total direct labor hours of 50,000. During the year actual manufacturing overhead incurred was $262,500 and 51,000 direct labor hours were used. a. Calculate the predetermined overhead rate. b. Calculate how much manufacturing overhead will be applied to production. c. Is overhead over- or underapplied? By how much? d. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased?

Chloe Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Chloe Corp. estimated total manufacturing overhead cost at $480,000 and total direct labor hours of 40,000. During the year actual manufacturing overhead incurred was $462,500 and 41,000 direct labor hours were used. a. Calculate the predetermined overhead rate. b. Calculate how much manufacturing overhead will be applied to production. c. Is overhead over- or underapplied? By how much? d. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased?

The most common method for disposing of the balance in Manufacturing Overhead is to make a direct adjustment to Cost of Goods Sold

Kayla Inc. uses a job order costing system. Manufacturing overhead is applied on the basis of direct labor cost. Total manufacturing overhead was estimated to be $150,000 for the year; direct labor was estimated to total $300,000. The following transactions have occurred during the year. a. Calculate the predetermined overhead rate. b. Calculate cost of goods manufactured. c. Calculate the over- or underapplied overhead. d. Calculate adjusted cost of goods sold.

All the costs assigned to an individual job are summarized on a:

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?

When job order costing is used, costs are accumulated on a job cost sheet

Blueberry Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of machine hours. For the upcoming year, Blueberry Corp. estimated total manufacturing overhead cost at $270,000 and total machine hours of 45,000. During the year actual manufacturing overhead incurred was $258,750 and 46,600 machine hours were used. a. Calculate the predetermined overhead rate. b. Calculate how much manufacturing overhead will be applied to production. c. Is overhead over- or underapplied? By how much? d. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased?

Cost of goods sold is the amount of cost transferred:

If materials being placed into production are not traced to a specific job, debit:

Northwest Inc. has provided the following information for 20x5: a. Purchased raw materials on account for $150,000. b. Issued $130,000 in raw materials to production ($34,000 were not traceable to specific jobs). c. Incurred $144,000 in direct labor costs (14,120 hours) and $62,500 in supervision costs (paid in cash). d. Incurred the following additional manufacturing overhead costs: factory lease $36,000 (paid in cash); depreciation on equipment $30,000; indirect supplies $13,500 (paid in cash). e. Incurred the following nonmanufacturing costs, both paid in cash: advertising $45,000; sales commissions $48,000. f. Applied manufacturing overhead to jobs in process at a rate of $13 per direct labor hour. g. Completed jobs costing a total of $415,000. h. Sold jobs for $625,000 on account. The cost of the jobs was $412,000. i. Closed the Manufacturing Overhead account balance. Prepare the journal entries to record these transactions.

Koebel Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Koebel Corp. estimated total manufacturing overhead cost at $500,000 and total direct labor hours of 50,000. Koebel Corp. started the year with no beginning balances in either Work in Process Inventory or Finished Goods Inventory. During the year, actual manufacturing overhead incurred was $512,500 and 49,000 direct labor hours were used. a. Calculate the predetermined overhead rate. b. Calculate how much manufacturing overhead will be applied to production. c. Is overhead over or underapplied? By how much? d. What account should be adjusted for over or underapplied overhead? Should the balance be increased or decreased?

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?

Santos Inc. had the following information for the preceding year: Additional information for the year is as follows: What was the ending Finished Goods Inventory balance on 12/31?

Sawyer Company had the following information for the year: Sawyer Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $9,000. What was cost of goods manufactured?

Underapplied overhead means:

Ecola Company uses a job order costing system. Manufacturing overhead is applied on the basis of direct labor cost. Total manufacturing overhead was estimated to be $120,000 for the year; direct labor was estimated to total $150,000. The following transactions have occurred during the year. a. Calculate the predetermined overhead rate. b. Calculate cost of goods manufactured. c. Calculate the over or under-applied overhead. d. Calculate adjusted cost of goods sold.

Miller Park Inc. uses a job order costing system with manufacturing overhead applied to products at a rate of 80% of direct labor cost. Treating each case independently, find the missing amounts for a through l: