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Exam 16: Costing Systems: Job Order Costing

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Question 1

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Which of the following is true of activity-based costing?

A) It is also called single-plantwide overhead costing.
B) It is helpful when companies manufacture one product.
C) It categorizes all indirect costs by activity.
D) The total overhead costs accumulate in one cost pool.

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Question 2

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Job order cost cards for incomplete jobs make up the ending balance of the Finished Goods Inventory account.

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Question 3

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Which of the following activities is a manager likely to carry out everyday?

To prepare financial statements at the end of the accounting period,the actual overhead cost for the period and the estimated overhead that was applied during the period must be reconciled in a job order costing system.

During the first month of the current accounting period,Southern California Company experienced a devastating loss due to a fire.Many of the accounting records were lost and the company is now trying to recreate the lost information.Fragments of data found include the following: 1.A portion of the budget indicates that the overhead rate was $10 per direct labor hour. 2.Job 74 was in process and had incurred $9,600 of direct materials and $14,000 of direct labor (1,000 hours).The company has a single hourly wage rate. 3.During the month,4,500 direct labor hours were worked. 4.Actual overhead costs were $48,000.No indirect materials were used. 5.The Materials Inventory account had a beginning balance of $28,000 and an ending balance of $18,000. 6.The Finished Goods Inventory account had a beginning balance of $12,000 and an ending balance of $26,000. 7.The Work in Process Inventory account had a beginning balance of $17,000. 8.The Cost of Goods Sold is $171,000. Calculate the following amounts: a.Ending work in process inventory account balance,Job No.74 b.Cost of goods completed c.Amount of overhead under- or overapplied. d.Direct materials used e.Direct materials purchased

Disposing under- or overapplied overhead into the Cost of Goods Sold account is related to _____ in the management process.

The costs of completed jobs in a service organization is transferred to the

Applied overhead is less than actual overhead incurred during the year.Which of the following journal entries is made to close the Overhead account if this difference is immaterial?

Overhead applied is calculated by multiplying predetermined activity rate and actual cost driver activity.

The traditional approach to applying overhead costs to a product or service is to use a(n)

Identical products are produced in a continuous flow production process.

In a job order costing system,when indirect materials are used,the Overhead account is increased.

If the actual overhead costs are more than applied overhead costs,the difference represents overapplied overhead costs.

In a job order costing system,the purchase of materials on account should be recorded as follows:

A job order costing system measures product costs

Johnson Technology specializes in graphic design and video production.In October 2014,the company incurred the following costs for providing services to one of its clients. Johnson Technology's contract with the client discloses 20% profit margin on the cost incurred. -Determine the total amount to be received by the company from its client.

Financial statements referred by external stakeholders compare actual unit costs with targeted unit costs.

A zero balance in Work in Process Inventory at the start of the period means all previously completed products have been shipped.

In a process costing system,product costs are traced to work cells.

The ending balance of Work in Process account is compared with the total costs shown on the job order cost cards to ensure correctness.