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Exam 15: Job Order Costing and Analysis

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Question 81

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The rate established at the beginning of a period that uses estimated overhead and an allocation factor such as estimated direct labor,and that is used to assign overhead cost to jobs,is the:

A) Predetermined overhead rate.
B) Overhead variance rate.
C) Estimated labor cost rate.
D) Chargeable overhead rate.
E) Miscellaneous overhead rate.

F) None of the above
G) C) and D)

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Question 82

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If overhead is overapplied,it means that individual jobs have been charged too much overhead during the year and the cost of goods sold reported is too high.

A) True
B) False

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Question 83

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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.

Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August,of which $212,000 was direct and $73,000 was indirect supervisory costs.The correct journal entry to record the $73,000 indirect labor for the month is:

A company's ending inventory of finished goods has a cost of $45,000 and consists of 750 units.If the overhead applicable to these goods is $8,400,and overhead is applied at the rate of 60% of direct labor cost,what is the cost of the direct materials used to produce these units?

The predetermined overhead rate based on direct labor cost is the ratio of estimated overhead cost to estimated direct labor cost for the period.

The total manufacturing costs on job cost sheets for unfinished jobs equals the total amount in the Work in Process Inventory account in the general ledger.

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased,units issued for use in production,and units that remain in the raw materials inventory,is called a(n) :

The Work in Process Inventory account for DG Manufacturing follows.Compute the cost of jobs completed and transferred to Finished Goods Inventory. The cost of jobs transferred to finished goods is:

Dallas Company uses a job order costing system.The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period.At the end of the period,the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs.Using direct labor hours as a base,what was the predetermined overhead rate?

A ________ is calculated by dividing total estimated factory overhead by an activity base such as total estimated direct labor cost.

A company that uses a job order costing system would make the following entry to record the flow of direct materials into production:

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

Finished goods inventory is $190,000.If overhead applied to these goods is $72,000,and the overhead rate is 120% of direct labor,how much direct materials cost was incurred in producing the inventory?

The total cost of completed but undelivered jobs equals the balance in the Work in Process Inventory account.

When a job involves producing more than one unit of a custom product,it is often called a job lot.

Minstrel Manufacturing uses a job order costing system.During one month,Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost. -The total manufacturing costs added during the period is:

Minstrel Manufacturing uses a job order costing system.During one month,Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost. -The journal entry to record the factory payroll is:

In a job order costing system,any immaterial underapplied overhead at the end of the period can be debited entirely to Cost of Goods Sold.

When indirect labor is recorded,________ is debited.