FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 2: Job-Order Costing

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following statements is correct?

A) Companies must choose to use either job order costing or process costing; there is no overlap between the two systems.
B) Companies always use job order costing unless it is prohibitively expensive.
C) Companies always use process costing unless it is prohibitively expensive.
D) Companies often provide products and services that have both common and unique characteristics, so they may use a blend of job order and process costing.

E) All of the above
F) B) and C)

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Optimum Finance Inc. provides budget, savings, and investment services to clients who want a stress-free financial lifestyle. The company customizes a program for each client based on their individual goals that includes budget recommendations, investment counseling, and savings techniques. The company uses a job order cost system that keeps track of the cost of the amount of time financial consultants spend with each client. Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $500,000 to its consultants and incur indirect operating costs of $750,000. Actual consultant labor costs were $537,500 and actual indirect operating costs were $725,000. During the year, Optimum provided 64 hours of consulting services to Robert Howard for which Optimum pays an average of $18 per hour. What is the total cost of providing services to Robert?

A) $2,707
B) $2,822
C) $1,924
D) $2,880

E) B) and C)
F) A) and C)

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Which of the following types of firms would most likely use process costing?

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. Which of the following would be correct?

To incorporate sustainability into the Cost of Goods Manufactured report, include information on all of the following except:

Jenkins Company had the following information for the year: Jenkins 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 $19,000. What was cost of goods manufactured?

Job order costing systems for companies that compete in, for example, the green building arena should reflect:

Which of the following would be used to record the usage of indirect manufacturing resources?

Which of the following represents the accumulated costs of incomplete jobs?

Service firms:

Josie Inc. has provided the following information for 20x5: a. Purchased raw materials on account for $120,000. b. Issued $115,000 in raw materials to production ($22,000 were not traceable to specific jobs). c. Incurred $115,000 in direct labor costs (14,375 hours) and $62,500 in supervision costs (paid in cash). d. Incurred the following additional manufacturing overhead costs: factory lease $24,000 (paid in cash); depreciation on equipment $20,000; custodial supplies $7,500 (paid in cash). e. Incurred the following nonmanufacturing costs, both paid in cash: advertising $75,000; sales commissions $88,000. f. Applied manufacturing overhead to jobs in process at a rate of $10 per direct labor hour. g. Completed jobs costing a total of $345,000. h. Sold jobs for $425,000 on account. The cost of the jobs was $342,000. i. Closed the Manufacturing Overhead account balance. Prepare the journal entries to record these transactions.

When materials are purchased, which of the following accounts is debited?

If there is a debit balance in the Manufacturing Overhead account at the end of the period, overhead was underapplied

A predetermined overhead rate is calculated by dividing:

McGown Corp. has the following information: Additional information for the year is as follows: Compute the current manufacturing costs.

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. The amount credited to the Manufacturing Overhead account would be:

Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $450,000, and actual direct labor hours were 19,000. The predetermined overhead rate per direct labor hour would be:

Green Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job #1478), as summarized below: Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour. a. How much overhead would be applied to Job #1478? b. What is the total cost of Job #1478?

Ace Architects employs two architects, each having a different area of specialization. Caitlin specializes in industrial commercial construction and Zachary specializes in residential construction. Ace expects to incur total overhead costs of $779,625 during the year and applies overhead based on annual salary costs. Caitlin is a senior partner, her annual salary is $168,750, and she is expected to bill 2,000 hours during the year. Zachary is a senior associate, his annual salary is $91,125, and he is expected to bill 1,800 hours during the year. a. Calculate the predetermined overhead rate. b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 20% markup, compute the hourly billing rates for Caitlin and Zachary.

Ragtime Company had the following information for the year: Ragtime Company used a predetermined overhead rate of $35 per direct labor hour for the year. Assume the only inventory balance is an ending Work in Process Inventory balance of $17,000. What was cost of goods manufactured?