Exam 2: Job Order Costing and Analysis

Explain what a predetermined overhead rate is, how it is calculated, and why it is used.

Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Direct materials are assigned to each job according to actual cost. If Job M-47 used $350 of direct materials and took 20 direct labor hours of labor to complete, what is the total cost that should be assigned to the job?

Describe the purpose of a job cost sheet, and explain what information is found on the job cost sheet.

When direct labor costs are recorded in a job costing:

Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Cosi 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 Cosi Company's predetermined overhead rate?

A company uses a job order costing system and applies overhead on the basis of direct labor cost. A summary of the company's Work in Process Inventory account for December appears below. Work In Process Fill in the blanks for the following: (1) The total cost of the direct materials, direct labor, and factory overhead for jobs still in progress is $________. (2) The company's overhead application rate is ________% (3) Job No. 6 had $26,550 of direct labor cost. Therefore, the job must have had $________ of direct materials cost. (4) Job No. 8 had $73,998 of direct materials cost. Therefore, the job must have had $________ of factory overhead cost.

An example of direct labor cost is:

Describe how materials flow through a job order costing system, and identify the key documents in the system.

The total costs on job cost sheets for jobs that are completed but not yet sold equals the balance in the Work in Process Inventory account.

A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used. 106,400.

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of September, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the balance in the Work in Process account at the end of September relative to Job A3B?

The cost of all direct materials issued to production is debited to Work in Process Inventory.

The Factory Overhead account will have a credit balance at the end of a period if overhead applied during the period is greater than the overhead incurred.

Time tickets can be used to determine the amount of direct labor to charge to jobs.

A company has an overhead application rate of 125% of direct labor costs. How much overhead would be allocated to a job if it required direct labor costing $20,000?

Selected information for Singh Corp. for the year follows: Calculate the predetermined overhead rate using: (a) Estimated direct labor hours. (b) Estimated direct labor cost. (c) Estimated machine hours.

If overhead is underapplied all of the following are true except:

Predetermined overhead rates are necessary because cost accountants use periodic inventory systems.

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

A company's predetermined overhead rate is 130% of direct labor cost. How much overhead would be allocated to a job that required total direct labor costs of $60,000?