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Exam 2: Job Order Costing and Analysis

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Question 1

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A manufacturing company uses an overhead allocation rate based on direct labor cost.The company's Goods in Process Inventory account has a $15,000 debit balance after all posting is completed, and the cost sheet of the one job still in process shows direct material costs of $6,600 and direct labor costs of $3,000.What is the company's overhead application rate?

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($15,000 -...

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Question 2

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Selected information from the budget of the Khalid Corp.at the beginning of the year follows: Calculate the predetermined overhead allocation rate if the company uses the following as a basis: A.Direct labor hours. B.Direct labor cost. C.Machine hours.

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A.$132,000/55,000 = $2.40 per ...

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Question 3

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When factory payroll is assigned to specific jobs, ______________________ is debited.

Dell Builders manufactures each house to customer specifications.It most likely would use:

Overhead is applied as a percent of direct labor costs.Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively.During the year, actual overhead was $107,400 and actual direct labor cost was $120,000.The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:

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

In a job order cost accounting system, raw materials requisitioned as direct materials are debited to ______________________; indirect materials are debited to ___________________.

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.

Match the following terms to the appropriate definition:

A job order cost accounting system would be appropriate for a manufacturer of automobile tires.

Overapplied or underapplied overhead should be removed from the Factory Overhead account at the end of each accounting period.

A manufacturing firm that produces large numbers of standardized units would normally use a job order cost accounting system.

When factory payroll for indirect labor is assigned, __________________ is debited.

Service firms, unlike manufacturing firms, should only use actual costs when determining a selling price for their services.

The production of one unit of Product BBB used $17.50 of direct materials and $21 of direct labor.The unit sold for $56 and was assigned overhead at a rate of 30% of labor costs.What is the gross profit per unit on its sale?

A company's file of job cost sheets for finished but unsold jobs equals the balance in the Finished Goods Inventory account.

Plumley Ad Agency contracted with a company to prepare an ad campaign.Plumley uses a job order costing system.Plumley estimates that the job will take 145 designer hours at $90 per hour and 85 staff hours at $45 per hour.Plumley uses two overhead rates in applying overhead to jobs: Designer-related at $100 per designer hour and staff-related at $50 per staff hour.Determine the total estimated cost for this job.

The predetermined overhead allocation rate is used to apply overhead cost to products.

At the current year-end, Hardly Company found that its overhead was underapplied by $2,500, and this amount was not deemed to be a material amount.Based on this information, Hardly should:

If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for $8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale?