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Exam 19: Job Order Costing

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Question 81

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A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual factory overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?

A) $6,000 overapplied.
B) $6,000 underapplied.
C) $54,800 overapplied.
D) $54,800 underapplied.

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

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Question 82

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Job order cost accounting systems can be used only for companies that manufacture a product.

A) True
B) False

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Question 83

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The amount of time spent by an employee in the factory is usually recorded on:

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

All of the following are examples of activity bases except:

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:

Prepare the journal entry for materials and labor, based on the following:

Which of the following would record the labor costs to an individual job?

Activity-based costing is a method of accumulating and allocating costs by department.

On November 14th the Milling Department has accepted Job 111407A for 1,000 pounds of Cereal Mix. The bill of materials (BOM) for the Cereal Mix is: Manufacturing overhead is applied at $5.75 per pound completed, and $75.75 of materials are returned to Raw Materials Inventory. The recipe produced 1,025 pounds of cereal mix.

Job order cost systems can be used to compare unit costs of similar jobs to determine if costs are staying within expected ranges.

Which of the following would be most likely to use process costing?

Cavy Company completed 26,000 units during the year at a cost of $2,139,800. The beginning finished goods inventory was 5,000 units at $405,000. Determine the cost of goods sold for 20,000 units, assuming a FIFO cost flow.

In a job order cost accounting system, the entry to record the flow of direct materials into production is:

Which of the following costs are NOT included in finished goods inventory?

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?

Materials purchased on account during the month amounted to $180,000. Materials requisitioned and placed in production totaled $165,000. From the following, select the entry to record the transaction on the day the materials were bought.

In the job order system, the finished goods account is the controlling account for the factory overhead ledger.

If the underapplied factory overhead amount is material, it is transferred to Cost of Goods Sold at the end of the fiscal year.

The recording of the jobs shipped and customers billed would include a credit to: