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Exam 16: Job Order Costing

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Question 1

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Which of the following is the formula to calculate the predetermined factory overhead rate?

A) estimated total factory overhead costs divided by estimated activity base
B) actual total factory overhead costs divided by estimated activity base
C) estimated total factory overhead costs divided by actual activity base
D) actual total factory overhead costs divided by actual activity base

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

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Question 2

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Job cost sheets can provide information to managers for all except

A) the cost impact of materials changes
B) the cost impact of continuous improvement in the manufacturing process
C) the cost impact of materials price or direct labor rate changes over time
D) utilities,managerial salaries,and depreciation of computers in the corporate office

E) All of the above
F) None of the above

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Question 3

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List the accounts used in the cost flow for (a)a manufacturer and (b)a service provider.

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for

On November 2,Newsprint Manufacturing purchases 5 rolls of paper on account at $125 per roll for use within the production process.On November 5,4 rolls of this paper are issued to Job 157A in the Printing Department.The Printing Department records $675 in direct labor and $1,150 of factory overhead to Job 157A.On November 8,Printing transfers Job 157A to the Folding Department.The Folding Department applies $450 in direct labor and $655 in factory overhead to Job 157A.Job 157A is transferred to Finished Goods inventory on November 9.

Discuss how job order cost information is used in decision making.What are some possible reasons that actual cost of materials would exceed expected costs for a job?

The basis for recording direct and indirect labor costs incurred is a summary of the period's

As product costs are incurred in the manufacturing process,they are accounted for as assets and reported on the balance sheet as inventory.

Match each of the following phrases with the term (a-e) that it most closely describes it.Each term will be used only once.​ -these make up the work in process subsidiary ledger

The job order costing system is not used by service organizations.

When a job is completed in a service organization,the job costs are transferred to the

The document authorizing the issuance of materials from the storeroom is a

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000.The company has decided that the basis for applying factory overhead should be machine hours,which is estimated to be 40,000 hours.The machine hours for the month of April for all of the jobs were 4,780.If the actual factory overhead totaled $141,800,determine the over- or underapplied amount for the month.

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000.The company has decided that the basis for applying factory overhead should be machine hours,which is estimated to be 40,000 hours.The machine hours for the month of April for all of the jobs were 4,780.If the actual factory overhead totaled $141,800,determine the over- or underapplied amount for the month.

Discuss the use of job order costing for professional services businesses.What are the similarities and differences between service and manufacturing business job order costing?

In a job order cost accounting system for a service business,materials costs are normally included as part of overhead.

Period costs are

At the end of the fiscal year,the balance in Factory Overhead is small.The balance would be

Materials purchased on account during the month amounted to $190,000.Materials requisitioned and placed in production totaled $156,000.The entry to record the transaction for materials requisitioned by the production department is

The Winston Company estimates that the factory overhead for the following year will be $1,250,000.The company has decided that the basis for applying factory overhead should be machine hours,which is estimated to be 50,000 hours.The total machine hours for the year were 54,300.The actual factory overhead for the year were $1,348,800. ​ (a)Determine the total factory overhead amount applied. (b)Calculate the over- or underapplied amount for the year. (c)Prepare the journal entry to close Factory Overhead into Cost of Goods Sold.