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Exam 17: Costing Systems- Job Order Costing

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Question 1

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In a job order costing system,at the end of the accounting period,the balance in the subsidiary ledger for unfinished jobs should equal the ending balance in the Work in Process Inventory account.

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B) False

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Question 2

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Pretty Pillows,Mfg.,manufactures silk throw pillows.Last month the company produced 3,890 pillows.Using job order costing,determine the product unit cost for one pillow based on the following costs: production facility utilities,$1,600; depreciation on production equipment,$650; indirect materials,$400; direct materials,$5,300; indirect labor,$1,000; direct labor,$3,500; sales commissions,$4,000; president's salary,$8,000; insurance on production facility,$1,000; advertising expense,$900; rent on production facility,$6,000; rent on sales office,$4,000; and legal expense,$600.Carry your answer to two decimal places.

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Question 3

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In a service organization using a job order costing system,actual overhead will be the same as applied overhead.

In a job order costing system,when supplies are issued from inventory to production,the Overhead account is increased.

G.M.Richardson,CPA,entered into a cost-plus contract with Ivey Computer Services for software installation and Internet interfacing in her accounting practice.The following is Ivey Computer Services' job cost card for this job.Ivey's profit factor is 30 percent of total costs.Complete the following card,as indicated:

Product costs appear on the income statement in the form of

In a job order costing system,the Factory Payroll account is a clearing account.

The _________ provide(s) the most direct means of calculating unit costs for a job.

Quicker Company uses a job order costing system.On May 1,Quicker Company's Work in Process Inventory account shows a beginning balance of $161,000.Production activity for May was as follows: Materials costing $91,000,along with operating supplies of $18,000,were requisitioned into production.Quicker Company's total payroll was $316,000,of which $77,000 was indirect labor.Overhead is applied at a rate of 120 percent of direct labor cost.Quicker's Cost of Goods Sold for the month of May was $692,000.Finished Goods Inventory was $71,500 on May 1 and $84,000 on May 31.(Quicker does not close out overhead accounts until year-end.) a. Calculate Quicker's cost of goods completed for May. b. Calculate Quicker's work in process ending inventory (May 31). c. One of the jobs that was started in May, Job 266, was completed in June. Job 266 was 200 special-order lamps. The following costs had been applied to Job 266 as of June 1: direct materials, $1,400; direct labor, $1,800; overhead, $2,160. In June, $580 in direct materials cost and $900 of direct labor cost were added to complete Job 266. What was the cost per unit for Job 266? (Show your computations.)

When direct materials are issued from inventory to production under a job order costing system,an increase is recorded in

Bear Country produces hand-carved wooden bears and uses a job order costing system.The following are data on the three jobs worked on in the company's first month of operations: $\begin{array} { l r r r } & \text { Smokey } & \text { Rocky } & \text { Curious } \\\text { Number of bears } & 180 & 100 & 80 \\\text { Direct labor hours worked } & 400 & 200 & 140 \\\text { Direct materials cost } & \$ 4,500 & \$ 2,700 & \$ 2,000 \\\text { Direct labor cost } & \$ 6,000 & \$ 3,000 & \$ 2,100\end{array}$ Overhead cost is applied to job orders on the basis of direct labor hours at a predetermined rate of $10 per hour.The Smokey and Rocky bears were completed during the month,and the Curious bears remained in work in process at the end of the month. a. Compute the cost transferred to finished goods during the month. b. Compute the unit cost for a Rocky bear.

When a job is completed in a service organization,the job costs are transferred to the

When the amount of overhead applied differs from actual,the dollar amount it is usually written off to

The following partially completed T accounts summarize the transactions of Carlton Company for last year: At the end of the year,the company closes out the balance in the Overhead account to Cost of Goods Sold. The cost of goods sold (after adjusting for under- or overapplied overhead) is

Costs for individual jobs are maintained on job order cost cards when job order costing is in use.

Accounting for the incurrence of __________ does not change significantly between job order costing and process costing.

A job order cost card is a type of subsidiary ledger.

The ending balance in the Work in Process Inventory account is supported by individual Overhead account balances.

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

The types of computations for costs to be transferred out of Work in Process Inventory differ if the production process involves multiple departments rather than a single department.