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Exam 3: Job Costing

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Question 131

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Manufacturing overhead is overallocated if the amount:

A) estimated for the period is greater than the actual amount incurred.
B) amount estimated for the period is less than the actual amount incurred.
C) allocated during the period is greater than the actual amount incurred.
D) allocated during the period is less than the actual amount incurred.

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Question 132

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The difference between the sales price and the job cost is:

A) cost of goods sold.
B) gross profit.
C) net income.
D) operating income.

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Question 133

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The following information was gathered for the Buckley Corporation for the most recent year.Manufacturing overhead is allocated using direct labor hours. $\begin{array}{|l|r|}\hline \text { Estimated direct labor hours } & 54,000 \\\hline \text { Actual direct labor hours } & 57,000 \\\hline \text { Estimated manufacturing overhead costs } & \$ 729,000 \\\hline \text { Actual manufacturing overhead costs } & \$ 685,000\\\hline\end{array}$ -What is the company's predetermined manufacturing overhead rate?

The cost-plus price is determined as:

The predetermined manufacturing overhead rate is calculated by dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base.

Manufacturing overhead costs can be traced to jobs.

State whether each company below would be more likely to use a :

Addison Company uses a job costing system.Addison Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31. $\begin{array} { | l | r | } \hline \text { Cost of goods manufactured } & \$ 101,000 \\\hline \text { Cost of direct materials used } & 38,000 \\\hline \text { Cost of direct labor (\$25 per hour) } & 80,000 \\\hline \text { Work in process inventory, August 1 } & 12,000 \\\hline\end{array}$ - Actual manufacturing overhead costs for August amount to $42,000. What is the amount of work in process inventory (before any adjustment for overallocated or underallocated manufacturing overhead) on August 31?

Switech Technology's work in process inventory on June 1 has a balance of $24,500 representing Job No.95.During June,$67,500 of direct materials were requisitioned for Job No.95 and $4,300 of direct labor cost was incurred on Job No.95.Manufacturing overhead is allocated at a rate of $15.00 per direct labor hour.Actual manufacturing overhead costs incurred in June amounted to $20,000.There were 600 actual direct labor hours worked in June.No new jobs were started during June.Job No.95 is completed on June 28. a)Determine the total cost assigned to Job No.95. b)Is manufacturing overhead overallocated or underallocated for the month of June? By how much?

The following information was gathered for the Buckley Corporation for the most recent year.Manufacturing overhead is allocated using direct labor hours. $\begin{array}{|l|r|}\hline \text { Estimated direct labor hours } & 54,000 \\\hline \text { Actual direct labor hours } & 57,000 \\\hline \text { Estimated manufacturing overhead costs } & \$ 729,000 \\\hline \text { Actual manufacturing overhead costs } & \$ 685,000\\\hline\end{array}$ -What is the amount of overallocated or underallocated overhead for the year?

Under what circumstance should the amount of overallocation or underallocation be reflected as an adjustment to cost of goods sold?

Wesley Corporation charged Job 110 with $12,000 of direct materials and $13,500 of direct labor.Allocation for manufacturing overhead is 80% of direct labor costs.What is the total cost of Job 110?

Allocating manufacturing overhead costs is done:

The cost of direct materials used in production is recorded as a:

The total cost of a job shown on the job cost record is the sum of the direct labor traced to the job and the manufacturing overhead allocated to the job.

An equal amount of manufacturing overhead should be allocated to each job.

For a manufacturer that uses job costing,show the order of the cost flow through the following accounts by numbering them from 1 to 4. ____ Finished goods inventory ____ Raw materials inventory ____ Cost of goods sold ____ Work in process inventory

When direct materials are requisitioned,they flow directly into:

Manufacturers follow four steps to implement a manufacturing overhead allocation system.The first step is to calculate a manufacturing overhead rate.

When a job is completed,the journal entry involves a: