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Exam 2: Job Order Costing

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Question 71

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Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000,and actual labor hours were 21,000.To dispose of the balance in the Manufacturing Overhead account,which of the following would be correct?

A) Cost of Goods Sold would be credited for $15,000.
B) Cost of Goods Sold would be credited for $5,000.
C) Cost of Goods Sold would be debited for $5,000.
D) Cost of Goods Sold would be debited for $15,000.

E) A) and B)
F) A) and C)

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Question 72

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Jenkins Company had the following information for the year: Jenkins Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours.Assume the only inventory balance is an ending Finished Goods Inventory balance of $19,000.What was cost of goods manufactured?

A) $841,000
B) $860,000
C) $883,000
D) $900,000

E) C) and D)
F) None of the above

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Question 73

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Josie Inc.has provided the following information for the year ended 20x8: a.Purchased raw materials on account for $120,000. b.Issued $115,000 in raw materials to production ($22,000 were not traceable to specific jobs). c.Incurred $115,000 in direct labor costs (14,375 hours)and $62,500 in supervision costs (paid in cash). d.Incurred the following additional manufacturing overhead costs: factory lease $24,000 (paid in cash);depreciation on equipment $20,000;custodial supplies $7,500 (paid in cash). e.Incurred the following nonmanufacturing costs,both paid in cash: advertising $75,000;sales commissions $88,000. f.Applied manufacturing overhead to jobs in process at a rate of $10 per direct labor hour. g.Completed jobs costing a total of $345,000. h.Sold jobs for $425,000 on account.The cost of the jobs was $342,000. i.Closed the Manufacturing Overhead account balance. Prepare the journal entries to record these transactions.

Frontier Inc.has provided the following information for the year ended 20x8: a.Purchased raw materials on account for $240,000. b.Issued $230,000 in raw materials to production ($32,000 were not traceable to specific jobs). c.Incurred $242,000 in direct labor costs (24,120 hours)and $92,500 in supervision costs (paid in cash). d.Incurred the following additional manufacturing overhead costs: factory utilities $24,000 (paid in cash);depreciation on equipment $45,000;indirect supplies $17,500 (paid in cash). e.Incurred the following nonmanufacturing costs,both paid in cash: advertising $75,000;sales salaries $88,000. f.Applied manufacturing overhead to jobs in process at a rate of $9 per direct labor hour. g.Completed jobs costing a total of $644,000. h.Sold jobs for $856,000 on account.The cost of the jobs was $642,000. i.Closed the manufacturing overhead account balance. Prepare the journal entries to record these transactions.

Which of the following types of firms would most likely use job order costing?

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $415,000,and actual labor hours were 21,000.The amount credited to the Manufacturing Overhead account would be:

Jackson Company had the following information for the year: Jackson Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours.Assume the only inventory balance is an ending Finished Goods balance of $19,000.How much overhead was applied during the year?

The most common method for disposing of the balance in Manufacturing Overhead is to make a direct adjustment to Cost of Goods Sold.

Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $450,000 and actual direct labor hours were 19,000.The predetermined overhead rate per direct labor hour would be:

Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $450,000 and actual direct labor hours were 19,000.The amount of manufacturing overhead applied to production would be:

Highview Corp.applies manufacturing overhead to production at 125% of direct labor cost.During the year ended 20x8,manufacturing overhead of $100,000 was applied to production;actual manufacturing overhead was $109,000.Beginning Work in Process Inventory was $15,000 and beginning Finished Goods Inventory was $35,000.Work in Process Inventory increased by 10% during the year and Finished Goods Inventory decreased by 20% during the year.Sales for the year ended 20xx were $450,000,yielding a $130,000 gross profit. Complete the following schedule:

Jenkins Company had the following information for the year: Jenkins Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours.Assume the only inventory balance is an ending Finished Goods Inventory balance of $19,000.What was adjusted cost of goods sold?