Chapter 2 Job Order Costing

An allocation base is a(n) measure used to assign all manufacturing costs to products and services measure of activity used to assign overhead costs to products and services activity that causes overhead costs to change

measure of activity used to assign overhead costs to products and services

The journal entry to record labor cost credits

salary and wages payable

Typical cost drivers include (check all that apply) Computer Time Machine hours flight hours machine depreciation utilities cost

Computer time machine hours flight hours

Smith, Inc. uses a job order costing system with the predetermined overhead rate of $12 per machine hour. The job cost sheet for Job 42A listed $12,000 in direct labor cost, $18,000 in direct materials cost, 1,200 direct labor hours and 1,100 machine hours. The total cost of Job 42A is $______

$43,000 Total cost of Job 42= Direct materials + Direct Labor+Predetermined overhead rate x Actual machine hours+$18,000+$12,000+($12 per machine hour X 1,100 machine hours)

Fillia, Inc. worked on three jobs this period: Job 14C, which cost $15,000; Job 23A, which cost $28,000, and Job 45B, which cost $23,000. At the end of the period, only Job 14C was still in process (unfinished). the cost of goods manufactured this period is $______

$51,000 The cost of goods manufactured, is the cost of jobs completed during the period. Jobs 23A and 45B

Place these items in order in which they appear on the schedule of Cost of Goods Sold Unadjusted cost of goods sold Add: underapplied overhead Deduct: Finished goods inventory, ending Adjusted cost of goods sold Cost of goods available for sale

1. Cost of goods available for sale 2. Deduct Finished goods inventory, ending 3. Unadjusted cost of goods sold 4. Add Underapplied overhead 5. Adjusted cost of goods sold

The total cost of a job includes: check all that apply A. direct materials cost B. actual manufacturing overhead C. non-manufacturing cost D. direct labor cost E. Applied manufacturing overhead

A. Direct materials cost D. Direct Labor Cost E. Applied manufacturing overhead

Place these items from the income statement in the order in which they should appear A. Sales B. Net operating income C. Cost of goods sold D. Selling and administrative expenses E. Gross Margin

A. Sales C. Cost of goods sold E. Gross Margin D. Selling and administrative expenses B. Net operating income

The journal entry to record the purchase of materials credits:

Credit Accounts Payable

Place these items in the order in which they appear on the schedule of cost of goods sold A. Unadjusted cost of goods sold B. Deduct: Finished goods inventory, ending C. cost of goods available for sale D. Finished goods inventory, beginning E. Add: Cost of goods manufactured

D. Finished goods inventory, beginning E. Add: Cost of goods manufactured C. Cost of goods available for sale B. Deduct: Finished goods inventory, ending A. Unadjusted cost of goods sold

A total of $10,000 manufacturing was applied to Job #40. The journal entry to record this entry would be:

Debit Work in Process $10,000 and Credit Manufacturing Overheard $10,000

What account is debited for the issuance of direct materials into production? Accounts payable manufacturing overheard work in process raw materials

Debit Work in process

Put the steps for calculating direct materials on the schedule of cost of goods manufactured in order A. Deduct: Indirect materials included in manufacturing overhead B. Raw materials used in production C. Deduct: Raw materials inventory, ending D. Add: purchases of raw materials E. Raw materials inventory, beginning F. Total raw materials available

E. Raw materials inventory, ending D. Add: Purchases of raw materials F. Total raw materials available C. Deduct: Raw materials inventory, ending B. Raw materials used in production A. Deduct: Indirect materials included in manufacturing overhead

When a job is completed, its costs are transferred into: Cost of goods sold Finished goods Raw materials Work in process

Finished goods

Which of the following statements are true? check all that apply Raw materials only include the cost of direct materials Raw materials used in production are transferred to Work in process as direct materials When materials are purchased they are recorded in the Raw Materials inventory account. Direct labor costs flow through the Raw materials inventory account.

Raw materials used in production are transferred to Work in process as direct materials. When materials are purchased they are recorded in the Raw materials inventory account.

The schedule of cost of goods_________ summarizes costs that remain in Finished goods inventory and that have been transferred to Cost of goods sold.

Sold

Which of the following would not be a good allocation base for manufacturing overhead? accounting direct labor hours units of products machine hours

accounting hours

A company spent $2000 on factory rent, $1000 on factory utilities, and $5000 on misc factory cost. The journal entry to record these transactions would be:

debit manufacturing overhead cost and credit accounts receivables

Actual manufacturing overhead was $50,000, while overhead applied to jobs was $45,000. The entry to dispose of underapplied or overpapplied overhead would: A. Credit manufacturing overhead $5000 B. Debit manufacturing overhead $50000 C. Credit manufacturing overhead $50,000 D. Debit manufacturing overhead $5,000

A. credit manufacturing overhead $5,000 underapplied overhead results in 5000 debit balance in the overhead account. To dispose of it, manufacturing overhead should be credited for 5000

Match each event in the process of accounting for manufacturing overhead with the appropriate entry. A. Actual overhead is incurred B. Overhead is applied to work in process C. The period ends 1. Manufacturing Overhead is credited 2. Manufacturing overhead is closed 3. Manufacturing Overhead is debited.

A.--3 B.--1 C.--2

Which of the following are used to calculate Cost of goods available for sale on the schedule of cost of goods sold? check all that apply A. Cost of goods sold B. Beginning finished goods inventory C. Cost of goods manufactured D. Ending finished goods inventory

B. Beginning finished goods inventory C. Cost of goods manufactured. ***Ending finished goods inventory would be subtracted from goods available for sale to obtain cost of goods sold.

A journal entry debiting Cost of goods sold and crediting Finished goods is made when A. the period is completed B. Goods are sold C. Goods are started D. Goods are finished

B. Goods are sold