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Exam 27: Job Order Cost Accounting

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Question 1

True/False

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At the end of each year, the underapplied or overapplied overhead usually is closed out to the Cost of Goods Sold account.

A) True
B) False

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Question 2

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The McGreen Company employees worked 10,000 hours last year with an average hourly rate of $11 per hour. The overhead was $495,000. If overhead is based on direct labor costs, then the overhead rate is ________ per direct labor dollar.

A) $11.00
B) $49.50
C) $4.50
D) $4.95 495,000/(10,000 x 11) .

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

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Question 3

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Match the following definitions with the correct term from the list provided.

Idle time is generally charged to manufacturing overhead.

When a perpetual inventory system is used, sales revenue is recorded as products are sold,

When materials that will become part of a finished product are removed from the storeroom and placed in production,

Fill in the blanks for each of the following. (Blanks are indicated by numbers in parentheses.)

During the year, a firm's direct labor costs were $115,000. The firm applies overhead at the rate of 80 percent of direct labor costs. The firm's actual overhead costs for the year were $90,665. 1. What was the amount of overhead applied? 2. Did the firm have overapplied or underapplied overhead for the year? 3. What amount was overapplied or underapplied?

If manufacturing overhead is applied at a rate of $1.50 per direct labor dollar and the Department B worker had worked 200 hours at $12 an hour on Job L1147, then the applied overhead would be

If a firm estimates that for the coming year it will have expected total direct labor costs of $60,000 and total manufacturing overhead costs of $36,000, its overhead application rate will be 60 percent.

Every job includes some idle time that is usually handled in one of two ways. What are they and under what circumstances is each utilized?

When a cost accounting system is used, perpetual inventory records are kept for raw materials, work in process, and ___________________.

Process cost accounting is appropriate

Purchases of raw materials are debited to the Work in Process Inventory account.

At the end of the year, Easton Company had a balance in Manufacturing Overhead of $20,000, and a balance in Manufacturing Overhead Applied of $19,000. When the Manufacturing Overhead account is closed, the Cost of Goods Sold account will be:

A firm purchased 50 units of materials with a unit price of $1.30 on June 1. On June 15, the firm purchased 50 units with a unit price of $1.20. If the firm uses the FIFO method of inventory pricing, the total cost of 65 units issued on June 20 would be

Under a perpetual inventory system, when goods are completed the Work in Process Inventory account is ___________________.

Wilson Enterprises applies overhead based on direct labor cost. The company estimates that their overhead for the year will be $240,000, and direct labor cost to be $300,000. Actual direct labor cost for Martinez Manufacturing was $280,000 and actual overhead costs were $220,000. At the end of the year, manufacturing overhead was:

The manufacturing overhead recorded in the Work in Process Inventory account is not necessarily the actual overhead incurred.

Based on the information given, complete the Job Order Cost Sheet for Job C3-19.