SB Ch. 2
Jones Company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost sheet for Job #420 listed $4,000 in direct materials cost and $5,000 in direct labor cost to manufacture 7,500 units. The unit cost of Job #420 is ______.
$2.00
A bill of materials contains the ______.
- quantity of each direct material needed to complete a unit of product - type of each direct material needed to complete a unit of product
Based on this information, the predetermined overhead rate per direct labor dollar for Dept. B is $
Blank 1: 1.35
Job XYZ has a total manufacturing cost of $600. If the mark-up percentage is 40%, the job will sell for $
Blank 1: 840
Based on this information, the amount of overhead allocated to a job that used 300 direct labor hours is $
Blank 1: 900
When a company creates overhead rates based on the actions it performs, it is employing an approach called _____ - _____ costing
Blank 1: activity Blank 2: based
Labor costs that are easily traced to a job are called _____ labor costs.
Blank 1: direct
Companies that make many different products each period use _____ - _____ costing.
Blank 1: job Blank 2: order
Which of the following is only true in a multiple predetermined overhead rate system?
Each production department may have its own predetermined overhead rate.
The root cause of inaccurately assigning costs to jobs is generally due to poor tracking of direct labor costs.
False
Which of the following would be considered direct materials in a service firm that uses job-order costing?
Paperwork at a law firm
Which of the following is not a manufacturing cost category?
Selling & administrative costs
Which of the following would not be considered a direct labor cost in a service firm that uses job-order costing?
The salary of the manager at a hair salon.
Which of the following would not be considered a job in a service firm that uses job-order costing?
The tax department in an accounting firm
Cost-plus pricing occurs when
a markup percentage is added to the cost of a job
A job-order costing system may inaccurately assign costs to jobs due to
an inappropriate allocation base
The type and quantity of each type of direct material needed to complete a unit of product is listed on the
bill of materials
Costs assigned to units of product in absorption costing include Blank______ manufacturing costs.
both variable and fixed
The difference between direct labor and indirect labor is that direct labor
can be easily traced to jobs, while indirect labor cannot
Job-order costing would most likely be used in a(n)
construction company
Manufacturing overhead:
contains fixed costs. consists of many different types of costs. is an indirect cost.
A factor that causes overhead costs is called a
cost driver
The adjustment for overapplied overhead Blank______ net income.
decreases cost of goods sold and increases
Categories of manufacturing costs include ______.
direct materials direct labor manufacturing overhead
The total cost of a job includes:
direct materials cost. predetermined manufacturing overhead. direct labor cost.
To calculate the unit product cost using the job cost sheet Blank______ by the number of units produced
divide the total job cost
To calculate the unit product cost using the job cost sheet ______ by the number of units produced.
divide the total job cost
Costs assigned to units of product under absorption costing include:
fixed manufacturing. variable manufacturing.
The adjustment for underapplied overhead Blank______ net income.
increases cost of goods sold and decreases
The document that records the materials, labor, and manufacturing overhead costs charged to a job is the
job cost sheet
Typical cost drivers include ______.
machine-hours, flight-hours, computer time
Manufacturing overhead consists of
many different kinds of indirect costs
Companies that use job-order costing make
many different products
Direct materials costs are recorded on the job cost sheet when the ______.
materials are issued to the job
When compared to a departmental approach, using activity-based costing results in Blank______ overhead rates.
more
Compared to a plantwide overhead rate system, a multiple predetermined overhead rate system is Blank______ accurate.
more complex and more
The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find
overhead applied to the job
The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost, and:
predetermined manufacturing overhead cost.
The formula for applying overhead to a specific job is: ______ amount of allocation base incurred by job.
predetermined overhead rate ×
A multiple predetermined overhead rate system is more accurate than a plantwide overhead rate system because it
reflects differences in how overhead costs are incurred within departments
Based on this information, the predetermined overhead rate per direct labor dollar for Dept. A is
$2.60
Murphy Manufacturing estimated total manufacturing overhead for the year to be $100,000 and that 5,000 direct-labor hours would be used. Actual overhead was $120,000 and actual direct labor-hours were 7,500. The overhead applied to a job completed during the year that used 200 direct labor-hours was
$4,000
