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Exam 15: Job Order Costing and Analysis

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Question 71

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Predetermined overhead rates are calculated at the end of the accounting period once the actual amount of factory overhead is known.

A) True
B) False

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Question 72

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Predetermined overhead rates are necessary because cost accountants use periodic inventory systems.

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B) False

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Question 73

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Time tickets for factory employees during the month of August are summarized as follows: Prepare the necessary journal entries to record factory payroll for direct and indirect labor.

Requisitions of indirect materials are not recorded on job cost sheets.

When actual overhead cost exceeds the overhead applied,overhead is said to be overapplied.

A company that produces a large number of standardized units would normally use a job order costing system.

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead rate exceeds the actual overhead incurred during a period.

The predetermined overhead rate is used to apply estimated overhead cost to jobs.

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.

If a company applies overhead to production with a predetermined overhead rate,a credit balance in the Factory Overhead account at the end of the period means that:

Job order costing applies to manufacturing firms only and not to service firms.

The two basic types of cost accounting systems are:

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

Portside Watercraft uses a job order costing system.During one month Portside purchased $173,000 of raw materials on credit; issued materials to production of $164,000,of which $24,000 were indirect.Portside incurred a factory payroll cost of $95,000,of which $25,000 was indirect labor.Portside uses a predetermined overhead rate of 170% of direct labor cost. -The journal entry to record the allocation of factory wages to production is:

The total costs on job cost sheets for jobs that are not yet completed equals the balance in the Work in Process Inventory 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,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 application of factory overhead to production is:

The journal entry to record direct materials used includes a debit to Work in Process Inventory.

Underapplied overhead is the amount by which overhead applied to jobs exceeds the actual overhead incurred during a period.

Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs,and allocates $18 of overhead for each employee hour worked.Direct materials are assigned to each job according to actual cost.Jobs are marked up 20% above total manufacturing cost to determine the selling price.If Job M-47 used $350 of direct materials and took 20 direct hours of labor to complete,what is the selling price of the job?

Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August,of which $212,000 was direct and $73,000 was indirect supervisory costs.The correct journal entry to record the direct labor for the month is: