Exam 2: Job Order Costing and Analysis

Underapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

The rate established prior to the beginning of a period that relates estimated overhead to an allocation factor such as estimated direct labor and that is used to assign overhead cost to jobs is the:

Job order costing is applicable to manufacturing firms only and not service firms.

When materials are used as indirect materials, their cost is debited to the Factory Overhead account.

If a company applies overhead to production with a predetermined rate, a credit balance in the Factory Overhead account at the end of the period means that:

The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:

Labor costs in manufacturing can be:

The job cost sheet for Job number 93-471 includes the following information: DIRECT MATERIALS: 7/12 Requisition R93-566: 20 units @ $ 3.50 per unit 7/13 Requisition R93-576: 18 units @ $ 5.00 per unit 7/13 Requisition R93-578: 4 units @ $25.00 per unit 7/14 Requisition R93-591: 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 @ $ 7.00 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 93-471?

A clock card is a source document used by an employee to record the total number of hours worked during the pay period.

In a job order cost accounting system, any immaterial underapplied overhead at the end of the period can be charged entirely to Cost of Goods Sold.

The predetermined overhead allocation rate for Forsythe, Inc.is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000.Actual costs incurred were: A.Calculate the predetermined overhead rate and calculate the overhead applied during the year. B.Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount.

Prepare journal entries to record the following transactions and events for April using a job order cost accounting system. (a)Purchased raw materials on credit, $69,000. (b)Raw materials requisitioned: $26,000 direct and $5,400 indirect. (c)Factory payroll totaled $46,000 (paid in cash), including $9,500 indirect labor. (d)Paid other actual overhead costs totaling $14,500 cash. (e)Applied overhead totaling $28,200. (f)Finished and transferred jobs totaling $77,500. (g)Jobs costing $58,800 were sold on credit for $103,000.

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

Austin Company uses a job order cost accounting system.The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour)and that factory overhead would be $1,500,000 for the current period.At the end of the period, the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs.Using direct labor hours as a base, what was the predetermined overhead allocation rate?

When a job is finished, its job cost sheet is completed and moved from the jobs in process file to the ____________________ file.

RC Corp.uses a job order cost accounting system.During the month of April, the following events occurred: A.Purchased raw materials on credit, $32,000. B.Raw materials requisitioned: $25,800 as direct materials (Job 1:$4,200, Job 2: $7,500, Job 3: $3,600 and Job 4: $10,500)and $10,500 indirect materials. C.Paid factory payroll for the month totaling $37,700 which includes $8,200 indirect labor. D.Assigned the factory payroll to jobs and overhead.(Job 1:$7,000, Job 2: $9,800, Job 3: $3,000 and Job 4: $9,700) E.Overhead was assigned at a rate of 50% of direct labor cost. Determine the total cost of each job.

Cost accounting systems accumulate costs and then assign them to products or services.

The file of job cost sheets for completed but undelivered jobs equals the balance in the Goods in Process Inventory account.

Cost accounting systems used by manufacturing companies are based on the:

O.K.Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs.O.K.expects to incur $800,000 of overhead during the next period and expects to use 50,000 labor hours at a cost of $10.00 per hour.What is O.K.Company's overhead application rate?