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