Chapter 15
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Adams incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year. $10,000 overapplied. $17,200 overapplied. $10,000 underapplied. $17,200 underapplied. $4,800 underapplied.
$10,000 underapplied.
A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used. Work in Process Inventory Finished Goods Inventory DR CR DR CR Beg. Bal. 100,800 Beg. Bal. 118,200 D.M. ? 324,800 301,000 D.L. ? O.H. ? F.G. ? End. Bal. 131,040 End. Bal. 142,000 Factory Overhead DR CR 93,240 90,720 $106,400. $113,120. $30,240. $211,680. $324,800.
$113,120.
Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 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 incurred. What is the balance in the Work in Process account at the end of September relative to Job A3B? $5,500 $11,500 $6,500 $9,500 $14,500
$14,500
The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applied to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units? $3,750. $2,000. $4,000. $6,000. $9,000.
$2,000.
The job order cost sheets used by Greene Company revealed the following: Job No. Bal., May 1 May Production Costs 134 $1,700 $0 135 1,200 300 136 0 900 Job No. 135 was completed during May and Jobs No. 134 and 135 were shipped to customers in May. What was the company's cost of goods sold for May and the Work in Process inventory on May 31? rev: 09_29_2017_QC_CS-103208 $3,200; $900. $2,900; $1,200. $1,200; $2,900. $1,700; $1,200. $4,100; $0.
$3,200; $900.
Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Materials are assigned to each job according to actual cost. If Job M-47 used $350 of materials and took 20 hours of labor to complete, what is the total cost that should be assigned to the job? $590 $600 $380 $950 $710
$950
The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company's overhead application rate is: 40%. 50%. 80%. 200%. 220%.
200%.
CWN Company uses a job order costing system and last period incurred $80,000 of actual overhead and $100,000 of direct labor. CWN estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If CWN bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be: 75%. 80%. 107%. 125%. 133%.
75%.
If a company applies overhead to production with a predetermined overhead rate, a credit balance in the Factory Overhead account at the end of the period means that: The bookkeeper has made an error because the debits don't equal the credits. The balance will be carried forward to the next period as an overhead cost. Actual overhead incurred was less than the overhead amount applied to production. The overhead was underapplied for the period. Actual overhead was greater than the overhead amount applied to production.
Actual overhead incurred was less than the overhead amount applied to production.
A company that makes which of the following types of products would best be suited for a job costing system? Fruit juice Bathing suits Snack chips Compact discs Custom jewelry
Custom jewelry
Oxford Company uses a job order costing system. In the last month, the system accumulated labor time tickets total $24,600 for direct labor and $4,300 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Oxford make to record the indirect labor used? rev: 06_09_2015_QC_CS-17366, 11_27_2015_QC_CS-34729 Debit Payroll Expense $28,900; credit Cash $28,900. Debit Payroll Expense $24,600; credit Factory Wages Payable $28,900. Debit Factory Overhead $4,300; credit Factory Wages Payable $28,900. Debit Work in Process Inventory $24,600; credit Wages Payable $28,900. Debit Work in Process Inventory $28,900; credit Factory Wages Payable $28,900.
Debit Factory Overhead $4,300; credit Factory Wages Payable $28,900.
Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials. How should Andrews journalize the purchase of raw materials for March? Debit Raw Materials Inventory $165,000; credit Accounts Payable $165,000 Debit Work In Process Inventory $165,000; credit Raw Materials Inventory $165,000 Debit Raw Materials Inventory $187,000; credit Cash $187,000 Debit Accounts Payable $165,000; credit Raw Materials Inventory $165,000 Debit Accounts Payable $187,000; credit Raw Materials Inventory $187,000
Debit Raw Materials Inventory $165,000; credit Accounts Payable $165,000
When time ticket information is entered into the accounting system, the journal entry is a debit to Factory Payroll and a credit to Work in Process Inventory. True False
False
Omega Contractors manufactures each house to customer specifications. It most likely would use: Process costing. A periodic inventory system. Unique costing. Job order costing. Activity-based costing.
Job order costing.
Features of a job costing system include all but which of the following: Diversity of products produced. Mass production. Heterogeneity. Customization. Separate manufacturing from other products.
Mass production.
Job order production systems would be appropriate for companies that produce custom homes, specialized equipment, and special computer systems. True False
True
Overapplied or underapplied overhead should be removed from the Factory Overhead account at the end of each accounting period. True False
True
The predetermined overhead rate based on direct labor cost is the ratio of estimated overhead cost to estimated direct labor cost for the period. True False
True
When a job is finished, its job cost sheet is completed and moved from the file of jobs in process to the file of finished jobs that are yet to be delivered to customers. True False
True
When materials are used as indirect materials, their cost is debited to the Factory Overhead account. True False
True