Homework 3

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation used $2,500 of direct materials and used $4,000 of direct labor. The job was not finished in September. An additional $3,000 of direct materials and $6,500 of direct labor were needed to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost. What is the amount of job costs added to Work in Process Inventory during October?

$22,500 3,000 + 6,500 +(6,500x2) = $22,500

A job order costing system is most likely used by which of the following?

An accounting firm specializing in tax returns

During production, to what are the costs in job order costing applied?

Each individual product

Which of the following is a conversion cost?

Factory depreciation expenses

Which of the following is not a feature of job order production?

High production volume

Which document lists the total direct labor used in a specific job?

Job cost sheet

Which document lists the total direct materials used in a specific job?

Job cost sheet

Which document shows the cost of direct materials, direct labor, and overhead applied for each specific job?

Job cost sheet

Large custom aircraft manufacturers normally use:

Job order costing

In a job order cost system, raw materials purchased are debited to which account?

Raw materials inventory

Which of the following product situations is better suited to job order costing than to process costing?

The cost are easily traced to a specific product

In a job order cost system, overhead applied is debited to which account?

Work in process inventory

In a job order cost system, which account shows the overhead used by the company?

Work in process inventory (incorrect) Manufacturing overhead?

Andrew industries purchased $170,000 of raw materials on account during the month of March. The beginning raw materials inventory balance was $23,000, and the materials use to complete jobs during the month were $145,000 of direct materials and $13,500 of indirect materials. What is the ending raw materials inventory balance for March?

$34,000 170,000 + 23,000 - 145,500 - 13,500 = 34,000

A company makes bikes from recycled metal. For a recent job lot of 200 bikes, the company incurred direct materials costs of $6,000 and direct labor costs of $2,000. Factory overhead applied to this job uses a predetermined overhead rate of 150% of the direct materials cost. What is the cost per bike?

$85 150%x 6,000 =9,000 9,000 + 6,000 +2,000 = 17,000 17,000/200 =85

Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 was direct and $73,000 was indirect supervisory costs. The correct journal entry to record the $73,000 indirect labor for the month is:

Debit factory overhead; credit factory wages payable

Materials requisitioned to work in process and manufacturing overhead departments amounted totally to $20,000, of which $15,000 belongs to direct materials and the remaining belongs to indirect materials. A journal entry to record this transaction would indicate:

Debit to materials inventory by $15,000 (incorrect) Debit to work in process by $15,000.

Oxford company uses a job order costing system. This month, the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor. The journal entry to record direct labor consists of a:

Debit work in process inventory $28,900; credit factory wages payable $28,900 (incorrect) Debit work in process inventory $24,600; credit factory wages payable $24,600

Which of the following is a prime cost?

Direct labor

The activity base for service industries is most likely to be ______.

Direct labor hours

In a job order cost system, indirect labor incurred is debited to which account?

Manufacturing overhead

The balance in the work in process in inventory account at any point in time equals:

The sum of manufacturing costs for all jobs in process but not yet completed.

B&T Company's production costs for May are: direct labor, $22,000; indirect labor, $7,400; direct materials, $15,900; property taxes on production facility, $890; factory heat, lights and power, $1,090; and insurance on plant and equipment, $290. B&T Company's factory overhead incurred for May is:

$9,670 7,400 + 890 + 1,090 + 290 = 9,670

In a job order cost system, utility expense incurred is debited to which account?

Manufacturing overhead

Which document lists the inventory that will be removed from the raw materials inventory?

Materials requisition form

A document used to assign direct labor costs to individual jobs and track how much time employees spend on each job is called a:

Time ticket

Morris company applies overhead based on direct labor costs. For the current year, morris company estimated total over head costs to be $400,000, and direct labor cost to be $2,000,000. Actual overhead costs for the year totaled $380,000, and actual direct labor costs totaled $1,800,000 at year-end, factory overhead is:

Under applied by $20,000

Assigning indirect costs to specific jobs is completed by which of the following?

Using the predetermined overhead rate

Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. Minstrel's beginning and ending work in process inventory are $15,000 and $27,000 respectively. Compute the cost of jobs transferred to finished goods inventory.

$440,000 (incorrect) 428,000 = 165,000 + 110,000 + 110,000(150%) + 15,000 -27,000

A company that uses job costing reports the following information. Overhead is applied at the rate of 60% of direct materials. The company has no beginning work in process or finished good inventories. Jobs 1 and 3 are not finished by the end of March, and job 2 is finished but not sold by the end of March. Direct materials: Job 1 - 13,200 Job 2 - 17,200 Job 3 - 6,200 Direct labor used: Job 1 - 21,200 Job 2 - 11,200 Job 3 - 9,200 Determine the total dollar amount of work in process inventory at the end of March.

$48,520 (incorrect) $61,440