Exam 17: Job Order Cost Systems and Overhead Allocations

What are the total manufacturing overhead costs allocated to the Car Seats for the current month?

Moran Company uses a job order cost system and has established a predetermined overhead application rate for the current year of 150% of direct labor cost,based on budgeted overhead of $900,000 and budgeted direct labor cost of $600,000.Job no.1 was charged with direct materials of $36,000 and with overhead of $27,000.What is the total cost of job no.1?

A job order cost system would be appropriate in the manufacturing of:

A debit balance in the manufacturing overhead account at month end indicates overhead applied to jobs was greater than the actual overhead costs.

Manufacturing overhead is not:

In a job order cost system,the costs of direct materials,direct labor,and manufacturing overhead are accumulated separately for each department for a given period of time.

Job order cost system Century Pools designs and builds custom pools and spas to the customer's order and uses a job order system.The predetermined overhead rate for the current year is 60% of direct labor cost. At the end of the current year,Century Pools' direct labor cost totaled $170,000 and actual overhead amounted to $105,000. A pool built for F.Becker required $32,000 of direct materials and $6,500 of direct labor.It was completed in May of the current year. (a)Compute the total cost of the Becker pool as shown on the job cost sheet at date of completion. (b)Compute the amount of under- or over-applied manufacturing overhead for Century's operations for the current year. (c)What disposition is made of over- or under-applied overhead at the end of the year (assume that the amount is not material)?

What are the factory foremen salaries allocated to Car Seats during the current month?

An activity-based costing system would probably not be appropriate if:

An effective cost accounting system should match processes that consume resources with the associated _____ in order to maintain competitive advantage.Select the best answer to complete the sentence.

Under- and over-applied overhead What is meant by under-applied overhead? By over-applied overhead? Briefly explain each term.

When goods are sold,a journal entry is made transferring the goods from cost of goods sold to finished goods.

Metalworks Incorporated purchased $54,500 worth of direct materials to be used in Job #222.During the accounting period,Job #222 used $45,600 of direct materials.The amount of direct materials that would be shown in Job #222 Job Cost Sheet at the end of the accounting period should be $54,500,since this is the amount of direct materials the company had purchased for this particular job.

A principal objective of cost accounting systems is to ensure that cost reports to management are prepared in accordance with generally accepted accounting principles.

Overhead application rate Define the term cost driver and explain the role of this item in the computation of an overhead application rate.

Job order costing cannot be used for a service company.

An overhead application rate is a device used to assign overhead costs to units of product in proportion to some "activity base" that can be traced directly to the manufactured products.

When a job is completed:

Overhead application rates allow overhead to be assigned as units are being produced throughout the accounting period.

Job order cost system Continental Company uses a job order cost accounting system.During March,three jobs were completed and the costs were computed as follows: job no.1,$89,000; job no.2,$58,800; job no.3,$54,000.As of March 31,the following amounts had been charged to the Work in Process Inventory controlling account in the general ledger: (a)Prepare the general journal entry to reflect the jobs completed during March: (b)Compute the cost of the unfinished jobs at March 31.$__________