ch 2 homework

Jones company uses a job order costing systm w/ a pre-overhead rate of 120% of direct labor costs. the job cost sheet for Job #420 listed 4k in direct material costs and 5k in direct labor costs to manufacture 7,500 units. unit cost of job #420 is

$2.00 total cost of job= direct material +direct labor +overhead(pre-overhead rate x actual direct labor costs)=4k+5k+1.20 x 5k= 15k unit product cost= 15,000/7,500= 2.00

steps needed to computed predetermined overhead rate in order

-estimate total amount of allocation rate -estimate total fixed man fact over & variable over per unit for upcoming period -estimate total manufacturing overhead for upcoming period compute predetermined overhead rate

steps in requisitioning and issuing materials in order

-production order is issued -production department prepares a materials requisition form -material requisition form is presented to storeroom clerk -storeroom clerk issues materials

income statement in the order how they should appear

1. sales 2. COGS 3. gross margin 4.selling and administration expenses 5.net operating income

estimated manufacturing overhead-500k estimated direct labor cost-250k actual manufacturing overhead-720k actual direct labor cost-300k what is predetermined overhead rate per direct labor dollar

2.00 per direct labor dollar 500,000/250,000

given: COG manufactured of 234k, beg finished goods inventory of 18k, ending finished goods of 24k unadjusted COGS is

228,000 =18k+234k-24k

calculate COG available for sale COG manufactured-234,000 beg. finished goods inv of 18,000 end. finished goods inv. of 24,000

252,000 234,000+18,000

estimated manufacturing overhead 500k estimated direct labor hours 200k actual manufacturing overhead 625k actual direct labor hours 260k company applies overhead using direct labor hours as the cost driver. calculate the amount that overhead was over or under applied

25k 500k/200k=2.50 x 260k= 650k applied. actual overhead = 625k overhead is 25k overapplied

calculate total manufacturing costs direct material-40k direct labor 100k manufacturing overhead applied:120k beg. work in process inventory-30k end. work in process inventory-12k

260,000 total manufacturing costs= 40k+100k+120=260k adjust work in process when calculating the COG manufactured

Meep industries had unadjusted COGS of 300k. overhead was over applied by 20k. adjusted COGS is

280,000 300,000-20,000

gemini had sales of 50k, COGS of 20k, and selling and administrative expenses of 25k. gross margin is

30k =50k-20k

Smith Inc uses job-order costing system w/ predetermined overhead rate of $12 per machine hour. job cost sheet for job 42A listed 12k in direct labor costs, 18k in direct material, 1,200 in direct labor hours and 1,100 machine hours. total cost of job 42A is

43,200 direct material+direct labor+pre-overhead rate x actual machine hours= 18k+12k+(12$ per machine hour x 1,100 machine hours)= 43,200

fillia inc worked on 3 jobs this period. Job 14C, which cost 15k, Job 23A, which cost 28k, and Job 45B, which cost 23k. at the end of the period, only Job 14C was still in process(unfinished). The COG manufactured this period is

51,000 must be completed during work period

calculate COG available for sale COG manufactured of 410k beg.finished goods inventory 110k end. finished goods inventory 125k

520 410+110

raw material inventory was 27k at beginning of year and 25k at end of year. during year 100k in raw materials were purchases, including 28k of indirect material that were put into manufacturing overhead during the period. cost of direct material used during period was

74,000 cost of direct materials= beg. inventory + purchases -indirect material-ending inventory 27k+100k-28k=74k

Department A manufactures parts in a highly automated process, Department B assembles parts by hand. Department C places completed units in a head chamber to sterilize them before being shipped.what is each allocation rate

A-machine hours B-direct labor hours C-batches

sum of all amounts transferred from work in process to finished goods during a period

COG manufactured

overhead is applied if

actual overhead is less than applied overhead

journal entry debited salaries expense and credited salaries and wages payable could record

administrative salary costs

measure such as direct labor hours or machine hours used to assign overhead costs to products and services is called a cost driver or

allocation base

what side of the manufacturing overhead account is actual manufacturing is entered on

always debit side

process used to assign overhead costs to products is called overhead____

application

journal that debits work in process and credit manufacturing overhead is recording

application of manufacturing overhead costs

unit product cost is the same as

average product cost per unit total job cost/# of units

when preparing financial statements in job order costing, finished goods flow first to, and then

balance sheet income statement

how are manufacturing costs that cant be traced to particular product assigned to products and services

by averaging across time and across products

2 accounts involved when under applying or over applied overhead is closed out using the simpler method

cogs AND manu overhead

manufacturing overhead 2 things

contains fixed costs is a indirect cost consists of many different types of costs

beginning balance on job cost sheet represent

cost of work done in prior periods

actual manufacturing overhead was 50k while overhead applied to jobs was 45k. the entry to dispose of under applied or over-applied overhead would

credit manufacturing overhead 5,000

in June 3000$ of prepaid factory insurance expired. the journal entry to record this event would

debit manufacturing overhead and credit prepaid insurance

ceo earned 100k last period. entry to record cost would be

debit salaries expense and credit salaries and wages payable

if over applied overhead is closed out of the COGS account will be

decreased

under applied or over applied overhead is the

difference between overhead applied to work in process and actual overhead

journal entry that debits work in process and manufacturing overhead and credited wages payable is recording

direct and indirect labor costs

categories of manufacturing costs include

direct labor direct material manufacturing overhead

total costs of a job includes

direct labor cost applied manufacturing overhead direct material cost

journal entry that debits manufacturing overhead and credits accounts payable could not record the incurrence of

direct labor costs

widely used allocation base in manufacturing are

direct labor hours units of product machine hours direct labor hours

total cost of job include

direct material costs direct labor costs applied manufacturing overhead

unadjusted COGS is calculated by -

end. finished goods inventory from goods available for sale

predetermined overhead formula is

estimated manufacturing overhead cost divided by estimated allocation base

US requires absorption costing for

external financial reports tax reports

what is cost that car manufacturers incur that can be directly traced to the product

factory installed GPS system

manufacturing overhead costs include

factory insurance factory supervisors salary

example of manufacturing overhead

factory rent

actual overhead costs appear in the work in process account but not on the job cost sheet

false

both direct and indirect labor costs can be easily traced

false

journal entry to record shipping goods to customers includes a credit to

finished goods

when job is completed its costs are transferred into

finished goods

Himber inc completed job that cost 14k in direct materials, 12k in direct labor, 8k in applied manufacturing overhead. journal entry to record completion of job would debit

finished goods 34k and credit work in process 34k

completed units that have not been sold are found in

finished goods inventory

COGS schedule

finished goods inventory, beginning add:COG manufactured COG available for sale deduct: finished goods inventory, ending unadjusted COGS

avg manufacturing overhead costs per unit usually vary from period to period due to

fixed manu overhead remans constant in total even when production changes

journal entry debited COGS and credits finished goods is made when

goods are sold

method used by companies to make many diff. products each period

job order costing

typical cost driver include

machine computers computer time flight hours

manufacturing overhead consists of all

manufacturing costs other than direct labor and direct materials consists of many different items

journal entry to record depreciation on factory equipment debits

manufacturing overhead and credits accumulated depreciation

job cost sheet contains

manufacturing overhead costs charged to job material costs charged to the job labor costs charged to the job

manufacturing overhead is incurred overhead is applied to work in process the period ends

manufacturing overhead is debited manufacturing overhead is credited manufacturing overhead is closed

direct material costs are recorded on job cost sheet when

materials are issued to the job

activity based costing is designed to be ____ than job order costing

more accurate

credit balance in manufacturing overhead account means overhead was

over applied

process used to assign overhead costs to products is called

overhead allocation

to keep track of labor time and costs, many firms have replaced

paper time tickets with computerized systems

formula for applying overhead to a specific job is

predetermined overhead rate x amount of allocation base incurred by job

a journal that debits raw materials and credits accounts payable is recording the

purchase of materials

journal entry to record issuing materials to be used in production credits

raw material

steps for calculating direct materials on the schedule of COG manufactured in order

raw material inventory, beginning add: purchases of raw material total raw materials available deduct-raw material inventory, ending raw materials used in production deduct-indirect materials included in manufacturing overhead

any purchased material that will go into the finished product are first recorded in the ___inventory account

raw materials

journal entry that debits manufacturing overhead and credits property taxes payable records the

recognition of accrued property taxes

journal entry that debits manufacturing overhead and credits accounts payable is made to record____

rent expense on factory equipment factory utilities expense

journal entry that debits advertising expense and credits cash would record the incurrence of a

selling cost

costs that are directly charged to income statement

selling costs administrative costs

time ticket consist of

the job number of jobs worked on nature of indirect tasks worked amount of time spent on each job

bill of material contains the

type of each direct material needed to complete a unit of product quantity of each direct material needed to complete a unit of product

when only a portion of units in job are sold the

unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold

costs assigned to units of product in absorption costing

variable manufacturing costs fixed manufacturing costs

account debited to record direct labor costs

work in process

what accounts are debited in the journal entry to record manufacturing labor costs

work in process and manu overhead

unit of product that are only partially complete are contained in the

work in process inventory

normal cost system=

x pre-overhead rate by the actual amount of allocation base incurred by job

is raw material an asset account

yes