Exam 17: Job Order Cost Systems and Overhead Allocations

Overhead costs are assigned to production using an overhead application rate,whereas no such "application rate" is used to assign the costs of direct materials and direct labor to production.The reason for this difference in procedures is that:

The account Finished Goods:

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 basic types of cost accounting systems are:

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

An activity base is said to be a "driver" of overhead costs when the activity base:

A job cost sheet will include:

A job cost sheet should:

Which of the following statements is true about activity-based costing?

Job order costing cannot be used for a service company.

The two steps required in activity-based costing are identifying separate activity cost pools and allocating each cost pool to the product using an appropriate cost driver.

[The following information applies to the questions displayed below.] Starbright manufactures children car seats,strollers,and baby swings.Starbright's manufacturing costs are budgeted as follows: Factory utilities $105,000 Factory foremen salaries $75,000 Machinery setup costs $30,000 Total manufacturing overhead $210,000 The company uses activity-based costing to allocate its manufacturing overhead costs to products based on the following schedule: During the current month,the following levels of activities were incurred: -What are the factory foremen salaries allocated to Car Seats during the current month? (Do not round intermediate calculations.Round your answer to the nearest dollar. )

The journal entry to transfer the completed Jefferson Apartments project to Canfield's finished goods inventory would include:

[The following information applies to the questions displayed below.] Riverview Company's budget for the coming year includes $6,000,000 for manufacturing overhead,50,000 hours of direct labor,and 250,000 hours of machine time. -If Riverview applies overhead using a predetermined rate based on machine-hours,what amount of overhead will be assigned to a unit of output which requires 0.5 machine hours and 0.25 labor hours to complete?

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:

Under a job order cost system,costs are accumulated for:

Pepsi Cola would most likely use a job order costing system.

[The following information applies to the questions displayed below.] Riverview Company's budget for the coming year includes $6,000,000 for manufacturing overhead,50,000 hours of direct labor,and 250,000 hours of machine time. -If Riverview applies overhead using a predetermined rate based on labor-hours,what amount of overhead will be assigned to a unit of output which requires 0.5 machine hours and 0.25 labor hours to complete?

[The following information applies to the questions displayed below.] Starbright manufactures children car seats,strollers,and baby swings.Starbright's manufacturing costs are budgeted as follows: Factory utilities $105,000 Factory foremen salaries $75,000 Machinery setup costs $30,000 Total manufacturing overhead $210,000 The company uses activity-based costing to allocate its manufacturing overhead costs to products based on the following schedule: During the current month,the following levels of activities were incurred: -What are the total manufacturing overhead costs allocated to the Baby Swings for the current month? (Do not round intermediate calculations.Round your answer to the nearest dollar. )

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.