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Exam 15: Job Order Costing and Analysis

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Question 111

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Job A3B was ordered by a customer on September 25.During the month of September,Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor.The job was not finished by the end of September,but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. -The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred.What is the total cost of the job when it is completed in October?

A) $16,000
B) $22,500
C) $37,000
D) $26,500
E) $32,000

F) A) and B)
G) A) and C)

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Question 112

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

A) A landscaping design for a new hospital.
B) Seedlings for sale in a nursery.
C) Sacks of yard fertilizer.
D) Packets of flower seeds.
E) Small gardening tools,including rakes,shovels,and hoes.

F) A) and E)
G) A) and D)

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Question 113

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Explain why the Factory Overhead account for a company may have a difference between the amount debited and the amount credited,resulting in an end of period balance prior to adjustment.

Cost accounting systems accumulate production costs and then assign them to products and services.

The cost of all direct materials issued to production is debited to Work in Process Inventory.

Clemmens Company applies overhead based on direct labor cost.Estimated overhead and direct labor costs for the year were $112,500 and $125,000,respectively.During the year,actual overhead was $107,400 and actual direct labor cost was $120,000.The entry to close the over- or underapplied overhead at year-end,assuming an immaterial amount,would include

Nutley Company uses a job order cost system and last period incurred $70,000 of overhead and $100,000 of direct labor.Nutley estimates that its overhead next period will be $65,000.The company also expects to incur $100,000 of direct labor.If Nutley bases its overhead applied on direct labor cost,what should be the predetermined overhead rate for the next period?

Job order costing would be appropriate for companies that produce training films for a specific customer or custom-made furniture.

A job cost sheet shows information about each of the following items except:

If overhead applied is less than actual overhead incurred,it is:

Underapplied overhead is the amount by which actual overhead cost exceeds the overhead applied to products during the period.

An example of direct labor cost is:

Job order costing would be used for all of the following except:

A materials requisition is a source document used for recording materials received.

Manufacturing costs incurred for jobs completed during an accounting period can bypass the inventory accounts on the balance sheet and be recorded directly in expense accounts.