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Exam 3: Job Costing

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Question 21

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If manufacturing overhead has been overallocated during the period,then:

A) the jobs produced during the period have been undercosted.
B) the jobs produced during the period have been costed correctly.
C) the jobs produced during the period have been overcosted.
D) none of the above occur.

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Question 22

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Waterside Sports Equipment Company's work in process inventory on June 1 has a balance of $21,500 representing Job No.151.During June,$52,000 of direct materials were requisitioned for Job No.151 and $31,000 of direct labor cost was incurred on Job No.151.Manufacturing overhead is allocated at 120% of direct labor cost.Actual manufacturing overhead costs incurred in June amounted to $42,000.No new jobs were started during June.Job No.151 is completed on June 28. -Is manufacturing overhead overallocated or underallocated for the month of June? By how much?

A) $16,167 overallocated
B) $ 4,800 overallocated
C) $ 4,800 underallocated
D) $16,167 underallocated

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Question 23

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Management can use the job cost information to control costs on future jobs.

The most significant cost for a service firm is direct materials cost.

select the letter corresponding to the term that best fits that statement. You may use a letter more than once and some letters may not be used at all.

Manufacturing overhead would include:

The amount of overallocation or underallocation is found by taking the difference between the amount of overhead allocated during the year and the amount of overhead incurred during the year.

On the line in front of each statement,enter the letter corresponding to the term that best fits that statement.You may use a letter more than once and some letters may not be used at all. $\begin{array} { | l | l | l | l | } \hline \text { A. } & \text { bill of materials } & \text { F. } & \text { job cost record } \\\hline \text { B. } & \text { cost driver } & \text { G. } & \text { process costing } \\\hline \text { C. } & \text { materials requisition } & \text { H. } & \text { labor tine record } \\\hline \text { D. } & \text { invaice } & \text { I. } & \text { receiving repart } \\\hline \text { E. } & \text { purchase arder } & \text { J. } & \text { job costing } \\\hline\end{array}$ ____ A bill from a supplier ____ A list of all of the raw materials needed to manufacture a job ____ System for assigning costs to a specific unit or to a small batch of products or services that pass through production steps as a distinct identifiable job ____ A written or electronic document authorizing the purchase of specific raw materials from a specific supplier ____ System for assigning costs to large numbers of identical units that usually proceed in a continuous fashion through a series of uniform production steps or processes ____ A written or electronic document that requests specific materials be transferred from the raw materials inventory storeroom to the production floor ____ A written or electronic document listing the quantity and type of raw materials received in an incoming shipment

Crabtree Ornaments Company uses job costing.Crabtree Ornaments Company has two departments,Trimming and Finishing.Manufacturing overhead is allocated based on direct labor cost in the Trimming Department and direct labor hours in the Finishing Department.The following additional information is available: $\begin{array}{|c|c|c|}\hline \text { Estimated amounts } & \text { Trimming Dept } & \text { Finishing Dept } \\\hline \text { Direct labor cost } &\$ 240,000 &\$ 425,000 \\\hline \text { Direct labor hours } &\$ 25,000 & \$40,000 \\\hline \text { Manufacturing overhead costs } & \$360,000 &\$ 280,000 \\\hline\end{array}$ Actual data for completed Job No.650 is as follows: $\begin{array} { | l | c | c | } \hline \text { Actual amounts } & { \text { Trimming Dept } } &{ \text { Finishing Dept } } \\\hline \text { Direct materials requisitioned } & \$ 24,300 & \$ 9,500 \\\hline \text { Direct labor cost } & \$ 36,100 & \$ 38,500 \\\hline \text { Direct labor hours } & { 4,400 } & 4,000 \\\hline\end{array}$ -What is the predetermined manufacturing overhead rate for the Trimming Department?

If manufacturing overhead has been overallocated during the year,it means the jobs have been overcosted.

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

When using cost-plus pricing,the markup is added to the job cost to help:

Job 2908 requires $12,000 of direct materials,$5,500 of direct labor,500 direct labor hours,and 250 machine hours.It also requires 9 hours of inspection at $40 per hour.Manufacturing overhead is computed at $25 per direct labor hour used and $45 per machine hour used. The total dollars of conversion costs are:

Which of the following is the most significant cost for a service company?

Job 2908 requires $12,000 of direct materials,$5,500 of direct labor,500 direct labor hours,and 250 machine hours.It also requires 9 hours of inspection at $40 per hour.Manufacturing overhead is computed at $25 per direct labor hour used and $45 per machine hour used. The total amount of overhead allocated is:

Star Corporation manufactures custom molds for use in the extrusion industry.The company allocates manufacturing overhead based on machine hours.Selected data for costs incurred for Job 732 are as follows: $\begin{array}{|l|c|}\hline \text { Direct materials used } & \$ \quad 5,600 \\\hline \text { Direct labor cost } &\$ 2,500 \\\hline \begin{array}{l}\text { Predetermined manufacturing overhead rate based on } \\\text { machine hours }\end{array} & \$12 \\\hline \text { Direct labor hours worked } & 250 \\\hline \text { Machine hours used } & 300 \\\hline\end{array}$ What is the manufacturing cost of Job 732?

If the actual amount of the manufacturing overhead allocation base is greater than the estimated amount of the allocation base used to calculate the predetermined rate,then manufacturing overhead must have been underallocated.

Here is some basic data for Mogelson Company: $\begin{array} { | l | r | } \hline \text { Cost of goods manufactured for the period: } & \$ 420,000 \\\hline \text { Work in process inventary, begrning of period: } & 100,000 \\\hline \text { Work in process inventary, end of period: } & 120,000 \\\hline \text { Direct materials used: } & \text { 50,000 } \\\hline\end{array}$ Manufacturing overhead is allocated at 60% of direct labor cost. What are the total costs debited to work in process inventory during the period?

Adjusting of cost of goods sold for the underallocation or overallocation of manufacturing overhead is generally done:

Here are selected data for Fritzel Company: $\begin{array} { | l | r | } \hline \text { Cost of goods manufactured } & \$ 390,000 \\\hline \text { Work in process inventary, beginging } & 112,000 \\\hline \text { Work in process inventary, ending } & 92,000 \\\hline \text { Direct materials used } & 75,000 \\\hline\end{array}$ Manufacturing overhead is allocated at 60% of direct labor cost. What was the amount of direct labor costs?