Job Costing

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Job Costing Questions and Answers

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Explain what would be included in the entry to record actual Manufacturing Overhead costs incurred in a process department.
Discuss the three categories of manufacturing costs. How does each fit in with the flow of physical goods in production?
Explain why are indirect materials and indirect labor classified under manufacturing overhead.
XYZ company recently made a purchase with the terms 1/10, n/30. What effective interest rate is being offered through these early payment discount terms? (assume 360 days in a year)
Classify each of the following costs of a mobile home manufacturer using these symbols: DM=Direct Materials, DL = Direct Labor, MO = Manufacturing Overhead, and O = Other. a. Sheet aluminum. b. Wa...
From the following transactions, prepare the appropriate general journal entries for the month of April. 1. Raw materials costing 560,000 were issued from the storeroom. 2. Direct labor of $53,00...
Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit and the firm is making an accounting profit of $3000. What are the firm's total costs?
In a job order cost system, work-in-process inventory is credited when a. manufactured goods are sold. b. manufactured goods are completed. c. raw materials are used in production. d. none of these.
The introduction of indirect materials into production in a job order cost system is recorded with a debit to a. Work-in-Process Inventory. b. Finished Goods Inventory. c. Raw Materials Inventory....
In a job-order cost system, the application of manufacturing overhead based on a predetermined overhead rate would be recorded as a debit to a. Cost of Goods Sold. b. Work-in-Process Inventory. c....
In a job-order cost system, direct materials requisitioned and introduced into production are recorded with a debit to a. Manufacturing Overhead. b. Finished Goods Inventory. c. Direct Labor Expens...
In a job order cost system, work-in-process inventory is debited when a. actual manufacturing overhead is incurred. b. raw materials are purchased. c. direct labor costs are incurred. d. actual man...
In a manufacturing company the proper journal entry (without numbers) to record the purchase of direct materials would be: Option A Finished Goods Inventory xx Raw Materials Inventory xx Op...
The manufacturing operation most likely to use job-order costing rather than a process costing is a. cereal manufacturing b. candy manufacturing c. crude oil refining d. office building construction
The basis used to apply manufacturing overhead in a job order cost system based on a predetermined overhead rate should be a measurable activity that correlates with or drives overhead costs. (i) T...
Identify and describe an actual company you believe might use a job order cost system. What product (good/service) does the company sell? Why would this company choose to use a job order cost syste...
My School Notebook Company produces custom 3-ring binders with school logos for high schools in the Midwest. They mold hinders in four standard colors and then imprint the school's logo on a to-ord...
A job order costing system would best fit the needs of a company that makes: a. Shoes and apparel. b. Paint. c. Cement. d. Custom machinery. e. Pencils and erasers.
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5850 unit...
As the new accountant at The Mason Company, you have been asked to set up a costing system for their new company. They build custom boats, each one made to order. The best system for them would be:...
Baehr Company is a manufacturing company that uses a normal job-costing system for its production costs. Inventories November 1: Materials used for production: Raw materials $10,500 Job 50 $ 45,0...
You have a task of being in charge of supply chain and logistics of conservatory industry. Explain which manufacturing process would you choose for designing conservatory: production line, continu...
Consider a basic economic order quantity (EOQ) model with the following characteristics: Item cost: $15. Item selling price: $20. Monthly demand: 500 units (constant) Annual holding cost: 9% of th...
Which method of grinding is used to produce a straight or tapered surface on a workpiece?
Lake Appliance produces washers and dryers in an assembly-line process. Payroll costs incurred during a recent period were: corporate executives, $590,000; assembly-line workers, $260,000; security...
Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor...
The most significant factor affecting the difference between planned lead time and actual lead time for a specific order or batch in a shop is/are: (a) Priority (b) Capacity (c) Queues (d) Componen...
Todd Company applied manufacturing overhead totalling $75,000 to various customer orders during the year. This $75,000 in applied manufacturing overhead was added directly to: a. Cost of Goods So...
Greer Company developed the following data for the current year: Beginning work in process inventory $136,000 Direct materials used 208,000 Actual overhead 176,000 Overhead applied 184,000 Cost of...
A company assigns overhead cost to completed jobs on the basis of 119% of direct labor cost. The job cost sheet for Job 313 shows $17,979 in direct materials has been used on the job and that $10,9...
Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $6,700 for direct materials, $9...
Consider the following costs that were incurred during the current year: 1. Tire costs incurred by Ford Motor Company. 2. Sales commissions paid to the sales force of Dell Inc. 3. Wood glue cons...
Randolph Company has two departments (Department A and Department B) for Job #111. As cost drivers used to apply overhead to products. Department A uses machine-hours and Department B uses direct l...
Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct labor-hours required to support estimated production 90,000 Machi...
A job required $9,000 in direct materials, and 500 hours of labour at a cost of $22 per hour. If the job contained 500 units, and the company billed at 75% above the unit product cost on the job co...
Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $6,900, direct labor of $4,100, and applied overhead of $3,485. Custom...
Prepare summary journal entries to record the following transactions and events a through g for a company in its first month of operations. a. Raw materials purchased on account, $86,000. b. Dire...
A corporation manufactures a specialty line of dresses using a job-order costing system. During January, the following costs were incurred in completing job J-1: Direct labor 32,000 Direct materia...
Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helme...
Most of the examples in the text apply job costing to products, but it can also be used by firms providing a service (tax preparer, plumber, real estate agent etc.). Think of a service you have bee...
1. Consider the activities undertaken by a medical clinic in your area. Do you consider a job order cost accounting system appropriate for this clinic? Why/why not? If so, identify factors that wou...
True or False: 1. Total manufacturing costs add up to the sum of beginning work in process and total manufacturing costs incurred. 2. Depreciation on factory equipment is a prime cost. 3. Factor...
True or False: 1. Direct labor is both a prime and conversion cost. 2. Product costs are initially reported on income statements as expenses. 3. Manufacturers typically report three types of inv...
On May 31, the inventory balance of Tog Designer, a manufacturer of high-quality children's clothing, were as follow: Materials Inventory, $21,360; work in process Inventory $15,112 ; and finished...
Lezo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year o...
X Company manufactures a single product, Product A, and budges total manufacturing costs each month. The accountant provides the following Information about Its manufacturing process: Direct mater...
Smith Company completed jobs that cost 25,000 to manufacture. Record the journal entry.
Milner Company is working on two job orders. The job cost sheets show the following: Job 201 Job 202 Direct materials $7,000 $8,800 Direct labor $3,800 $7,800 Manufacturing overhead $5,000 $9,60...
For future management decisions the company makes, what are the implications when a company does not track raw materials and direct labor costs properly to specific jobs in a job costing system?
Vaughn manufacturing thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its job $1,950,000. The company used 1,000 of processin...
McTorry Razors produces deluxe razors that compete with Gillette's Mach line of razors. Total manufacturing costs are $120,000 when 15,000 packages are produced. Of this amount, total variable cost...
A job cost sheet of Sandoval Company is given below. Job Cost Sheet JOB NO. 469 Quantity 2,410 ITEM White Lion Cages Date Requested 7/2 FOR Todd Company Date Completed 7/31 Date Direct Materials...
Bryant Company incurred costs of $50,000 for direct materials (raw) purchased. Direct labor was $60,000 and factory overhead was $35,000 for May. Inventories were as follows: Raw materials beginni...
Jet engines are one of the many products made by the industrial operations division of General Electric. At prices as high as $30 million per engine GE does its best to keep track of costs. Because...
John at Tim's Toys was working on a custom-made miniature car for a customer. The job, BCB101, was begun in March. At the end of March, the job cost sheet for BCB101 showed direct materials of $6,0...
Only direct manufacturing costs are assigned to inventories and cost of goods sold. True False
Hurst Motors applies overhead based on direct labor hours. In completing the 300 motors in job 4329, the company incurred $10,500 indirect materials and 60 direct labor hours at $15 per hour. The p...
When designing a cost system, what points should you consider before starting the design?
Trace the flow of costs through a job-order costing system.
Compare and contrast job order costing with process costing.
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