Exam 12: Job-Order, Process, and Hybrid Costing Systems

Question

Burton Company custom-produces specialty souvenir products. During the current accounting period, the company completed the following transactions: (a) Purchased $20,000 of raw materials, paying cash.(b) Used direct materials in production as follows: (c) Paid direct labor costs as follows: (d) Paid cash for various actual factory overhead costs, $40,000.(e) Applied factory overhead to production using a predetermined overhead rate of $1.50 per direct labor dollar.(f) Completed Job 1.(g) Job 1 was sold for $50,000 cash.(h) Paid $1,000 for selling and administrative expenses.Required: 1) Record the data in the T-accounts provided. Post costs to the job cost sheet for Job 1 as necessary.Label the transactions (a) - (h).2) As transaction (i) post the closing entry for any underapplied or overapplied overhead assuming that the amount is written off directly against cost of goods sold.3) Prepare a schedule of cost of goods manufactured and sold assuming there were no beginning inventories.4) Compute the amount of gross profit earned on Job 1. Job Number Direct Materials 1 \ 10,000 2 5,000 3 2,000 Total \ 17,000 Job Number Direct Labor 1 \ 10,000 2 8,000 3 6,000 Total \ 24,000 $Burton Company custom-produces specialty souvenir products. During the current accounting period, the company completed the following transactions: (a) Purchased $20,000 of raw materials, paying cash.(b) Used direct materials in production as follows: (c) Paid direct labor costs as follows: (d) Paid cash for various actual factory overhead costs, $40,000.(e) Applied factory overhead to production using a predetermined overhead rate of $1.50 per direct labor dollar.(f) Completed Job 1.(g) Job 1 was sold for $50,000 cash.(h) Paid $1,000 for selling and administrative expenses.Required: 1) Record the data in the T-accounts provided. Post costs to the job cost sheet for Job 1 as necessary.Label the transactions (a) - (h).2) As transaction (i) post the closing entry for any underapplied or overapplied overhead assuming that the amount is written off directly against cost of goods sold.3) Prepare a schedule of cost of goods manufactured and sold assuming there were no beginning inventories.4) Compute the amount of gross profit earned on Job 1. \begin{array} { | l | l r | } \hline \text { Job Number } & { \text { Direct Materials } } \\ \hline 1 & \$ 10,000 \\ \hline 2 & 5,000 \\ \hline 3 & 2,000 \\ \hline \text { Total } & \$ 17,000 \\ \hline \end{array} \begin{array} { | l | l r | } \hline \text { Job Number } & \text { Direct Labor } \\ \hline 1 & \$ & 10,000 \\ \hline 2 & 8,000 \\ \hline 3 & 6,000 \\ \hline \text { Total } & \$ & 24,000 \\ \hline \end{array}$

The two most common types of costing systems are:

Select the response from the list provided that best matches each of the following descriptions: #2. Since you haven't used "whole" elsewhere, do you want to use it here? Also in B. and K.Also in answer below.Yes. We should use it. I went back through and inserted it as needed.

Payment of cash for production workers' wages is:

Which product costing system distributes costs evenly across total production?

What are hybrid cost systems? Under what circumstances might a company use a hybrid system?

The weighted average method of calculating equivalent units does not account for the state of completion of units in beginning work in process inventory.

For a company using a process cost system, as units are transferred from one department to the next, their costs are transferred along as well.

Two methods of computing equivalent whole units are the LIFO and the weighted average methods.

In which of the following industries would a job-order cost system most likely be used?

Payment of cash for sales staff salaries is an asset exchange transaction.

Management Accounting and Corporate Governance

Cost Behavior, Operating Leverage, and Profitability Analysis

Analysis of Cost, Volume, and Pricing to Increase Profitability

Cost Accumulation, Tracing, and Allocation

Cost Management in an Automated Business Environment: Abc, Abm, and Tqm

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Financial Statement Analysis

Statement of Cash Flows

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