Exam 2: Job Order Costing and Analysis

The Goods in Process Inventory account for the AB Corp.follows: The cost of units transferred to finished goods is:

Canberra Company uses a job order cost accounting system.During the current month, the factory payroll of $180,000 was paid in cash.The amount of labor classified as direct labor was three times greater than the amount classified as indirect labor.What amount should be debited to Factory Overhead for indirect labor for this month?

Overhead is applied as a percent of direct labor costs.Estimated overhead and direct labor costs for the year were $250,000 and $125,000, respectively.During the year, actual overhead was $248,000 and actual direct labor cost was $123,000.The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:

During last period, a company's overhead rate was 150% of direct labor cost.This caused factory overhead to be $10,000 overapplied.Use the following incomplete accounts to determine the cost of goods sold:

The production activities for a customized product represent a(n):

A materials requisition is a source document used by materials managers of a manufacturing company to order raw materials from suppliers; it serves the same purpose as a purchase order in a merchandising company.

A document in a job order cost accounting system that is used to record the costs of producing a job is a(n):

Explain how a service firm, such as an advertising agency, might use job order costing.

A time ticket is a source document used by an employee to record the number of hours worked on a particular job during the work day.

The following information is available for the Millennium Corporation for the current year: Millennium Corporation uses a predetermined overhead rate of 150% of direct labor cost.Prepare journal entries for the following transactions/ and events: (a)Purchase of raw materials on account. (b)Assignment of materials costs to Goods in Process Inventory and Factory Overhead (c)Payment of Factory Payroll in cash (d)Assignment of Factory Payroll to Goods in Process Inventory and Factory Overhead (e)Recording of other factory overhead.Assume that all items other than depreciation are paid in cash. (f)Assignment of Factory Overhead to Goods in Process Inventory (g)Transfer of goods completed to Finished Goods Inventory (h)Recording cost of goods sold (i)Assignment of over- or underapplied overhead to Cost of Goods Sold

Job order manufacturing systems would be appropriate for companies that produce training films for a specific customer.

In a job order cost accounting system, indirect labor costs are debited to the Factory Overhead account.

A source document that production managers use to request materials for manufacturing and that is used to assign materials costs to specific jobs or to overhead is a:

A time ticket is a source document an employee uses to record the number of hours at work and that is used each pay period to determine the total labor cost.

A job cost sheet is useful for developing financial accounting numbers but does not contain information that is useful for managing the manufacturing process.

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

Any material amount of under- or overapplied factory overhead must always be closed to Cost of Goods Sold at the end of an accounting period.

Job order manufacturing systems would be appropriate for companies that produce compact disks or disposable cameras.

Canoe Company's manufacturing accounting system uses direct labor costs to apply overhead to goods in process and finished goods inventories.Canoe Company's manufacturing costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000.The overhead application rate was:

If actual overhead incurred during a period exceeds applied overhead, the difference will be a credit balance in the Factory Overhead account at the end of the period.