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Exam 2: Job Order Costing

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Question 51

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Northwest Inc.has provided the following information for the year ended 20x8: 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.

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When materials are purchased,Raw Materi...

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Question 52

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

A) Superior Auto Body & Repair
B) Crammond Custom Cabinets
C) Sunshine Soft Drinks
D) Jackson & Taylor Tax Service

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

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Question 53

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

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?

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 balance of $9,000.How much overhead was applied during the year?

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

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

To eliminate underapplied overhead at the end of the year,Manufacturing Overhead would be debited and Cost of Goods Sold would be credited.

Pinnacle Consulting employs two CPAs,each having a different area of specialization.Judy specializes in tax consulting and Steve specializes in management consulting.Pinnacle expects to incur total overhead costs of $519,750 during the year and applies overhead based on annual salary costs.Judy is a senior partner,her annual salary is $225,000,and she is expected to bill 2,000 hours during the year.Steve is a senior associate,his annual salary is $121,500,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 Judy and Steve.

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?

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

Shellenback Inc.has provided the following information for the year ended 20x8: a.Purchased raw materials on account for $200,000. b.Issued $185,000 in raw materials to production ($12,000 were not traceable to specific jobs). c.Incurred $155,000 in direct labor costs (14,750 hours),$52,500 in supervision costs (paid in cash). d.Incurred the following additional manufacturing overhead costs: factory lease $22,000 (paid in cash);depreciation on equipment $26,000;factory utilities $13,500 (paid in cash). e.Incurred the following nonmanufacturing costs,both paid in cash: advertising $55,000;sales commissions $58,000. f.Applied manufacturing overhead to jobs in process at a rate of $9 per direct labor hour. g.Completed jobs costing a total of $457,000. h.Sold jobs for $735,000 on account.The cost of the jobs was $441,000. i.Closed the manufacturing overhead account balance. Prepare the journal entries to record these transactions.

Nashville Inc.uses a job order costing system with manufacturing overhead applied to products at a rate of 200% of direct labor cost.Treating each case independently,find the missing amounts for a through l:

Underapplied overhead means:

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.Which of the following would be correct?

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?

The source document that captures how much time a worker has spent on various jobs during the period is a:

Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $225,000,and actual direct labor hours were 19,000.The amount credited to the Manufacturing Overhead account would be:

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?