Cost Accounting A Managerial Emphasis Study Set 1
Quiz 4: Job Costing
What Is the Purpose of Subsidiary Ledgers? How Does a Subsidiary
What is the purpose of subsidiary ledgers? How does a subsidiary ledger relate to the control account in the general ledger?
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Frankenreid Corporation uses a job costing system.Record the following transactions in Frankenreid Corporation's general journal for the current month: a.Purchased raw materials on account, $15,000. b.Requisitioned $19,700 of direct materials and $8,800 of indirect materials for use in production. c.Factory payroll incurred, $142,000; 90% direct labour, 10% indirect labour. d.Recorded depreciation expense factory equipment $19,000, and other manufacturing overhead of $28,600 (credit accounts payable). e.Allocated manufacturing overhead costs based on 120% of direct labour cost. f.Cost of completed production for the current month, $205,000. g.Cost of finished goods sold, $190,000; selling price, $225,000 (all sales on account).
What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.
Why does the Manufacturing Overhead Control account (debit)need to equal the Manufacturing Control account (credit)? What will be the effect of having an end of year remaining balance, debit or credit, on the evaluation of profitability?
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