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Exam 2: Job Order Costing and Analysis

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Question 111

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Chung Corporation uses a job order costing system. Five jobs were worked on during the current year. The predetermined overhead rate is 20% of direct labor costs. The following cost information is available (all materials and time ticket information applies to direct costs): $\begin{array} { c c c } \text { Job } & \text { Materials Requisitions } & \text { Time Tickets } \\101 & \$ 66,000 & \$ 32,000 \\102 & \$ 63,000 & \$ 74,000 \\103 & \$ 39,000 & \$ 50,000 \\104 & \$ 32,000 & \$ 36,000 \\105 & \$ 53,000 & \$ 68,000\end{array}$ Part 1-Complete job cost sheets for each job. Part 2-Identify the amounts of each of the following accounts at the end of the period a. Work in Process________ b. Finished Goods________ c. Cost of Goods Sold________

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Question 112

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Predetermined overhead rates are calculated before the start of the accounting period, and are therefore based on estimates.

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B) False

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Question 113

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Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs to be $400,000, and direct labor costs to be $2,000,000. Actual overhead costs for the year totaled $380,000, and actual direct labor costs totaled $1,800,000. At year-end, the balance in the Factory Overhead account is a:

Materials requisitions and time tickets are cost accounting source documents.

Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. What is the ending Raw Materials Inventory balance for March?

When direct labor is assigned to specific jobs, ________ is debited.

The job cost sheet for Job number 83-421 includes the following information: DIRECT MATERIALS: 7/12 Requisition R88-566: 20 units @ $ 3.50 per unit 7/13 Requisition R88-576: 18 units @ $ 5.00 per unit 7/13 Requisition R88-578: 4 units @ $25.00 per unit 7/14 Requisition R88-591: 40 units @ $ 1.25 per unit DIRECT LABOR: 7/12 Employee 19: 8 hours @ $ 9.00 per hour 7/13 Employee 19: 6 hours @ $ 9.00 per hour 7/13 Employee 37: 6 hours @ $ 8.00 per hour 7/14 Employee 19: 5 hours @ $ 9.00 per hour 7/14 Employee 92: 5 hours @ $11.00 per hour FACTORY OVERHEAD: Assigned at 150% of direct labor cost. What is the total cost of Job number 83-421?

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

B&T Company's production costs for May are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000; property taxes on production facility, $800; factory heat, lights and power, $1,000; and insurance on plant and equipment, $200. B&T Company's factory overhead incurred for May is:

The direct materials section of a job cost sheet shows the materials costs assigned to a specific job, but the direct labor section only shows the total hours of labor allocated to the job.

The following information about the Zhang Company is available on December 31: The company applies overhead on the basis of 125% of direct labor costs. Calculate the amount of over- or underapplied overhead.

Job order costing would be appropriate for companies that produce custom homes and specialized equipment.

The predetermined overhead rate based on direct labor cost is the ratio of estimated overhead cost to estimated direct labor cost for the period.

The predetermined overhead rate for Shilling Manufacturing is based on estimated direct labor costs of $350,000 and estimated factory overhead of $770,000. Actual costs incurred were: a. Calculate the predetermined overhead rate and calculate the overhead applied during the year. b. Prepare the journal entry to eliminate the over- or underapplied overhead, assuming that it is not material in amount.

A receiving report is the source document for recording materials received in both a materials ledger card and in the general ledger.

Overapplied overhead is the amount by which actual overhead cost exceeds the overhead applied to products during the period.