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Exam 19: Job Order Cost Accounting

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Question 81

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The predetermined overhead allocation rate based on direct labor cost is the ratio of estimated overhead cost for the period to estimated direct labor cost for the period.

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Question 82

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A company's job order cost accounting system applies overhead based on direct labor cost. The company's estimated production costs for were: direct labor, $57,600; direct materials, $76,800; and factory overhead, $9,600. Calculate the company's overhead allocation rate.

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Question 83

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Deltan Corp. allocates overhead to production on the basis of direct labor costs. Deltan's total estimated overhead is $450,000 and estimated direct labor is $180,000. Determine the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory.

The collection of job cost sheets for all jobs in process makes up the subsidiary ledger controlled by the _____________________ inventory.

The Dina Corp. has applied overhead to jobs during the period as follows: The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is:

A source document that an employee uses to record the number of hours at work and that is used to determine the total labor cost for each pay period is a:

Describe the purpose of a job cost sheet, and explain what information is found on the job cost sheet.

Selected information from the budget of the Khalid Corp. at the beginning of the year follows:

Using the following accounts and an overhead rate of 90% of direct labor cost, determine the amount of applied overhead.

In comparison to a general accounting system for a manufacturing company, a cost accounting system places an emphasis on:

The file of job cost sheets for completed but undelivered jobs equals the balance in the Goods in Process Inventory account.

Underapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

A job order production system would be appropriate for a company that produces which one of the following items?

Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of $164,000 of which $24,000 were indirect. Docksider incurred a factory payroll of $95,000, paid in cash, of which $25,000 is classified as indirect labor. Docksider uses a predetermined overhead application rate of 170% of direct labor cost. The journal entry to record the application of factory overhead to production is:

Job order production is also known as:

Any material amount of under- or overapplied factory overhead must always be closed to Cost of Goods Sold at the end of an accounting period.

A company that uses a cost accounting system normally has only two inventory accounts: Finished Goods Inventory and Goods in Process Inventory.

Describe how materials flow through a job order cost accounting system, and identify the key documents in the system.

Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period. At the end of the period, the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?

When materials are used as indirect materials, their cost is debited to the Factory Overhead account.