Question 1

Drop Anchor takes special orders to manufacture sail boats for high-end customers. Prepare journal entries to record the transactions below and prepare job cost sheets for September.

a. Purchased raw materials on credit, $145,000.

b. Materials requisitions: Job 240, $48,000; Job 241, $36,000; Job 242, $42,000; indirect materials were $12,000.

c. Time tickets used to charge labor to jobs: Job 240, $40,000; Job 241, $30,000; Job 242, $35,000, indirect labor is $25,000.

d. The company incurred the following additional overhead costs: depreciation of factory building, $70,000; depreciation of factory equipment, $60,000; expired factory insurance, $10,000; utilities and maintenance cost of $20,000 were paid in cash.

e. Applied overhead to all three jobs. The predetermined overhead rate is 190% of direct labor cost.

f. Transferred jobs 240 and 242 to Finished Goods Inventory.

g. Sold job 240 for $300,000 for cash.

h. Closed the under- or over-applied overhead account balance.

Accepted Answer

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Question 2

A ________ is a separate record maintained for each job.

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Question 3

Overapplied overhead should be ________ to the Cost of Goods Sold account when closed.

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Question 4

Booth Manufacturing uses a job order costing system that charges overhead to jobs on the basis of direct material cost. At year-end, the Work in Process Inventory account shows the following.

a. Determine the predetermined overhead rate used.
b. Only one job remained in process at December 31. Its direct materials cost is $60,000. How much direct labor cost and overhead cost are assigned to it?

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Question 5

When indirect labor is recorded, ________ is debited.

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Question 6

When the actual overhead incurred during an accounting period is more than the overhead applied to jobs, the overhead is said to be ________.

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Question 7

A company charged the following amounts of overhead to jobs during the current year: $12,000 to jobs still in process, $42,000 to jobs completed but not sold, and $66,000 to jobs finished and sold. At year-end, the company's Factory Overhead account has a credit balance of $9,000. What entry (if any) should the company make at year-end related to this overhead balance?

Accepted Answer

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Question 8

Oddley Corp. uses a job order costing system. The following information pertains to costs applied to jobs during the current year:

Jobs still in process at the end of the year:
$167,000, which includes $65,000 direct labor costs.

Jobs finished and sold during the year:
$395,000, which includes $172,000 direct labor costs.

Jobs finished but unsold during the year:
$103,000, which includes $38,000 direct labor costs.

Oddley Corp.'s predetermined overhead rate is 60% of direct labor cost. At the end of the year, the company's records show that $189,000 of actual factory overhead has been incurred.

(a) Determine the amount of overapplied or underapplied overhead.

(b) Prepare the necessary journal entry to close the Factory Overhead account assuming that any remaining balance is not material.

Accepted Answer

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Question 9

The total cost on job cost sheets for all jobs in process equals the amount in the ________ Inventory account.

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Question 10

When direct labor is assigned to specific jobs, ________ is debited.

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Question 11

A ________ accounting system accumulates production costs and assigns them to products or services.

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Question 12

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

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Question 13

At the end of June, job cost sheets for Kennedy Manufacturing show the following total costs accumulated on three custom jobs:

Job 203 was started in production in May and the following costs were assigned to it in May: direct materials, $12,000; direct labor, $6,000; and overhead $8,700. Jobs 204 and 205 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 203 and 204 are finished in June, and Job 205 will be finished in July. No raw materials are used indirectly in June. Using this information, answer the following questions assuming the company's predetermined overhead rate did not change.

a. What is the total cost of direct materials requisitioned in June for the three jobs?

b. What is the total direct labor cost incurred during June for the three jobs?

c. What predetermined overhead rate is used during June?

d. How much total cost is transferred to finished goods during June?

Accepted Answer

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Question 14

In a job order costing system, raw materials requisitioned as direct materials are debited to ________; indirect materials are debited to ________.

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Question 15

The predetermined overhead rate for Shilling Manufacturing is based on estimated direct labor costs of $350,000 and estimated factory overhead of $770,000. Actual costs incurred were:
  a. Calculate the predetermined overhead rate and calculate the overhead applied during the year.
b. Prepare the journal entry to eliminate the over- or underapplied overhead, assuming that it is not material in amount.

Accepted Answer

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Question 16

Match between columns
                        Premises: An asset account where costs are accumulated while jobs are being produced.
A perpetual record that is updated each time units of raw material are purchased and issued for use in production.
The amount by which actual overhead incurred in a period exceeds the overhead applied to jobs with the predetermined overhead rate.
A source document that is used to report how much time an employee spent working on a job or on overhead activities and the labor costs to assign to jobs or overhead.
A cost record maintained for each job in a job order costing system; it shows the costs of direct materials, direct labor, and overhead for each job.
A source document that production managers use to request materials needed for manufacturing and that is used to assign materials costs to specific jobs or to overhead.
The rate established prior to the beginning of a period that relates estimated overhead to an activity base such as estimated direct labor and is used to assign overhead cost to a job.
The amount by which the overhead applied to jobs in a period with the predetermined overhead rate exceeds the actual overhead incurred in a period.
An asset account where costs of completed jobs are kept until the jobs are delivered to customers.
The production of products in response to special orders; also called customized production.
Accumulates production costs and assigns them to products and services.

Accepted Answer

The Answer of Time ticket and Job order production and is...

Quiz 2: Job Order Costing and Analysis