Job Order Costing - Theories

b. 2,250 underapplied

Carlo Company uses a a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. The company estimated manufacturing overhead at P255,000 for the year and direct labor-hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totaled P270,000. Actual direct labor hours were 105,000. What was the overapplied or underapplied overhead for the year? a. P2,250 overapplied b. 2,250 underapplied c. P15,000 overapplied d. P15,000 underapplied

a. 19,500 hours

For the current year, Paxman Company incurred P150,000 in actual manufacturing overhead cost. The manufacturing overhead account showed that overhead was overapplied in the amount of P6,000 for the year. If the predetermined overhead rate was P8.00 per direct labor hour, how many hours were worked during the years? a. 19,500 hours b. 18,500 hours c. 18,750 hours d. 17,750 hours

c. underapplied overhead of P6,000

Freeman company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be P150,000 and direct labor hours would be P10,000. The actual figures for the year were P186,000 for manufacturing overhead and P12,000 direct labor hours. The cost records for this year will show: a. overapplied overhead of P30,000 b. underapplied overhead of P30,000 c. underapplied overhead of P6,000 d. overapplied overhead of P6,000

b. P10,000 overapplied

Harell Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year the company estimated its total manufacturing overhead cost at P400,000 and its direct labor-hours at 100,000 hours. The actual overhead cost incurred during the year was P350,000 and the actual direct labor hours incurred on jobs during the year was 90,000 hours. The manufacturing overhead for the year would be: a. P10,000 underapplied b. P10,000 overapplied c. P50,000 underapplied d. P50,000 overapplied

a. more overhead cost has been incurred during the period

If a company applies overhead to jobs on the basis of a predetermined overhead rate, a credit balance in the Manufacturing Overhead account at the end of any period means that: a. more overhead cost has been incurred during the period b. more overhead cost has been incurred during the period than has been charged to jobs c. the amount of overhead cost charged to jobs is greater than the estimated cost for the period d. the amount of overhead cist charged to jobs in less than the estimated overhead cost for the period

d. Work in Process

In a job order cost system, direct labor costs usually are recorded initially with a debit to: a. Manufacturing overhead b. Finished goods inventory c. Direct labor expense d. Work in Process

a. Work in Process inventory

In a job order cost system, the use of direct materials previously pruchased usually is recorded as a debit to: a. Work in Process inventory b. Finished goods inventory c. Manufacturing overhead d. Raw materials inventory

c. manufacturing overhead

In a job-order cost system, the use of the indirect materials would usually be recorded as a debit to: a. Raw Materials b. Work in Process c. manufacturing overhead d. Finished goods.

d. a machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific job.

In job-order costing, all of the following statements are correct with respect to labor time and cost except: a. time tickets are kept by employees showing the amount of work on specific jobs. b. the job cost sheet for a job will contain all direct labour charges to that particular job. c. labor cost that can be traced to a #ob only with a great deal of effort is treated as part of manufacturing overhead. d. a machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific job.

b. yes yes

The computation of unit product costs involves an averaging process in Job-order costing process costing a. yes no b. yes yes c. no yes d. no no

b. 125%

The work in process inventory account of a manufacturing company shows a balance of P2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of P400 and P200 for direct materials, and charges of P300 and P500 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of: a. 80% b. 125% c. 300% d. 240%

a. job cost sheets.

Work in process is a control account supported by detailed cost data contained in: a. job cost sheets. b. the manufacturing overhead account. c. the Finished goods inventory account. d. purchase requisitions.

d. is part of the ending balance of the work in process inventory account.

in a job order cost system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period: a. is deducted on the income 4tatement as overapplied overhead. b. is closed to cost of goods sold. c. is transferred to Finished goods at the end of the period. d. is part of the ending balance of the work in process inventory account.

a. a credit to the manufacturing overhead account.

in a job order cost system, the journal entry to record the application of overhead cost to #obs would include: a. a credit to the manufacturing overhead account. b. a credit to the work-in-process inventory account. c. a debit to cost of goods sold. d. a debit to the manufacturing overhead account.

b. shipbuilding

which of the following companies would be most likely to use a job-order costing system rather than a process costing system: a. fast food restaurant b. shipbuilding c. crude oil refining d. candy making