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Exam 27: Job Order Cost Accounting

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Question 41

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What are the two principle cost accounting systems and give an example of a type of business which would use this system?

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Job Order Cost Accounting System:Used by...

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Question 42

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The process cost accounting system is used when homogenous products are manufactured in a continuous process.

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Question 43

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Millenium Manufacturing is considering two methods for applying overhead. Estimated data for t next year, 2019, follows. 1. What is the overhead application rate based on direct labor costs? 2. What would be the overhead application rate based on direct labor hours? 3. If a job requires 720 hours of direct labor, what is the amount of overhead applied to the job usin the rate based on direct labor hours?

On May 5, a firm purchased 20 units of materials at a unit price of $2.20. On May 15, the firm purchased 35 units at a unit price of $2.45. If the firm uses the FIFO method of inventory pricing, the total cost of 30 units issued on May 20 would be:

The--------- rate is often computed by dividing estimated overhead costs by estimated direct labor costs.

A worker completes a(n)----------for each job indicating the job performed and the corresponding starting and stopping time.

Which of the following IS NOT an advantage of a just-in-time inventory system?

Briefly describe a Just-in-Time (JIT)system. List the advantages and disadvantages of a JIT system.

The entry to record the application of overhead to jobs consists of:

The entry to record applied overhead includes a(n)----------to Manufacturing Overhead Applied.

Under the LIFO method of inventory valuation, the quantities used are priced from the oldest inventory items available in the order they were received.

When a perpetual inventory system is used, sales revenue is recorded as products are sold,

When perpetual inventories are maintained in a job order cost system, as each job is completed its cost is transferred from Work in Process Inventory to Finished Goods Inventory.

At the end of the month, if the total of the credits in the Manufacturing Overhead Applied account is greater than the total of the debits in the Manufacturing Overhead account, overhead has been underapplied.

Use the following information for the questions: Davit Boat Building has three jobs in process in November of the current year, A1-13, R18-4, and B2-19. All three were begun on November 1. Job A1-13 was completed on November 21 with total labor costs of $8,750 and total material costs of $7,725 (details of the individual direct material and direct labor costs charged to job A1-13 are given on the Job Order Cost Sheet provided). No other jobs were completed in November. The total balance in Job R18-4 is $3,275 ($675 in materials and $2,600 in labor) and in Job B2-19 is $6,782 ($1,240 in materials and $5,542 in labor) before overhead is applied. Overhead is applied based on total direct labor dollars. Estimated total direct labor dollars for the year is $245,000 and total estimated manufacturing overhead is $367,500. -Based on the information given: 1. Determine the overhead rate for Davit Boat Building; 2. Prepare the journal entry to apply manufacturing overhead to manufacturing process for the month of November; 3. Determine the balance in the Work in Process account.

Martinez Manufacturing applies overhead based on direct labor hours. The company estimates that their overhead for the year will be $180,000, and that they will use 72,000 direct labor hours. During the year, Martinez Manufacturing actually used 71,000 direct labor hours and actual overhead costs were $184,000. At the end of the year, manufacturing overhead was:

Perpetual inventory records are maintained through the use of subsidiary ledger cards or their automated equivalents.

A system of accounting in which the costs of each process are accumulated separately and then assigned to the units of product that passed through the process is a:

At the end of the fiscal year, any immaterial overapplied or underapplied overhead is:

Under a job order cost system, unit costs are determined for products manufactured under each----------.