Exam 17: Job Order Cost Systems and Overhead Allocations

Selecting an activity base Listed below are six activity cost pools used by the Keaton Corporation: Listed below are six activity bases used by Keaton to allocate manufacturing overhead costs to products.In the space provided next to each activity base,indicate for which of the above cost pools it is a cost driver. _____ (a)Number of equipment work orders related to each product line. _____ (b)Number of direct material purchase orders related to each product line. _____ (c)Number of production runs related to each product line. _____ (d)Square feet of direct materials warehouse space occupied by each product line. _____ (e)Number of machine hours required to produce each product line. _____ (f)Square feet of production space occupied by each product line.

Under-applied overhead at the end of a month:

Which of the following is a characteristic of manufacturing overhead in a job order cost system?

In a job cost system,the Work-in-Process Inventory controlling account may be reconciled to the total of the:

Which of the following is not a commonly used cost accounting system?

In an activity-based costing system,manufacturing overhead costs are divided into separate:

Edwards Auto Body uses a job order cost system.Overhead is applied to jobs on the basis of direct labor hours.During the current period,Job No.337 was charged $425 in direct materials,$475 in direct labor,and $190 in overhead.If direct labor costs an average of $16 per hour,the company's overhead application rate is:

What are the total manufacturing overhead costs allocated to the Baby Swings for the current month?

The employee time card for John Winter indicates that he spent last week performing routine maintenance on factory machinery.Payments made to Winter for last week's work should be:

Which of the following costing systems would always use job cost sheets?

Which of the following would likely be the most appropriate cost driver to allocate machinery set-up costs to products?

A job cost sheet should:

Objectives of a cost accounting system What are the major objectives of a cost accounting system in a manufacturing company?

Overhead application For a single product manufacturing company,all overhead must be assigned to the one product.Since this is the case,why would such a firm not simply assign actual overhead cost to production as it is incurred throughout the year?

Allocating activity cost pools to products Laughton Corporation makes two styles of cases for compact disks,the standard case and the deluxe case.The company has assigned $210,000 in monthly manufacturing overhead to three cost pools as follows: $90,000 to machining costs,$60,000 to production set-up costs,and $60,000 to inspection costs. Additional monthly data are provided below: The first and last unit in each production run is inspected for quality control purposes.Inspection costs are allocated to the products based on the number of inspections required.Machining costs are allocated to products using machine hours as an activity base.Set-up costs are allocated to products based on the number of production runs each product line requires. (a)Allocate manufacturing overhead from the activity cost pools to each product line. (b)Compare the total per-unit cost of manufacturing standard cases and deluxe cases. (c)On a per-unit basis,which product appears to be more profitable?

The type of cost accounting system best suited to a particular company depends on:

An activity-based costing system does not help managers make better product pricing decisions.

A job cost sheet usually contains a record of each of the following except:

Activity-based costing tracks cost to the activities that consume resources.

A collection of job cost sheets would be similar to a subsidiary ledger and the work-in-process account would be similar to the controlling account.