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Exam 2: Job Order Costing

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Question 1

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The recording of the application of factory overhead costs to jobs would include a credit to

A) Factory Overhead
B) Wages Payable
C) Work in Process
D) Cost of Goods Sold

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Question 2

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Present entries to record the following summarized operations related to production for a company using a job order cost system:

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Question 3

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A process cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

Which of the following would most likely use a job order costing system?

The materials requisition is used to

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for

The controlling account for the cost ledger is

At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance.Which of the following describes the nature of this balance and how it would be reported on the interim balance sheet?

A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

The following is a list of costs incurred by several business organizations: a Telephone cable for a telephone company b Membership fees for a health club for executives c Salary of the director of internal auditing d Long-distance telephone bill for calls made by salespersons e Carrying cases for a manufacturer of video camcorders f Cotton for a textile manufacturer of blue jeans g Bandages for the emergency room of a hospital h Cost of company holiday party i Electricity used to operate factory machinery j State unemployment compensation taxes for factory workers k Gloves for factory machine operators l Fees paid for lawn service for office grounds m Salary of secretary to vice-president of finance n Salary of secretary to vice-president of marketing o Production supervisor's salary p Engine oil for manufacturer and distributor of motorcycles q Oil lubricants for factory plant and equipment r Cost of a radio commercial s Depreciation on factory equipment t Wages of checkout clerk in company-owned retail outlet u Maintenance and repair costs for factory equipment v Depreciation on office equipment w Bonuses paid to salespersons x Insurance on factory building y Training for accounting personnel on use of microcomputer z Steel for a construction contractor Classify each of the preceding costs as product costs or period costs.For those costs classified as product costs, indicate whether the product cost is a direct materials cost, direct labor cost, or factory overhead cost.For those costs classified as period costs, indicate whether the period cost is a selling expense or an administrative expense.Use the following tabular headings for preparing your answer.Place an X in the appropriate column.

The journal entry to record the purchase of $45,000 of raw materials is

Match each of the following phrases with the term a-g that it most closely describes. -applied overhead is more than actual overhead incurred

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000.The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours.The machine hours for the month of April for all of the jobs was 4,780.If the actual factory overhead totaled $141,800, determine the over- or under applied amount for the month.

Factory overhead is applied to production using a predetermined overhead rate.

A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a

Job order cost systems can be used to compare unit costs of similar jobs to determine if costs are staying within expected ranges.

Job order cost accounting systems may be used for planning and controlling a service business.

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000.The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours.Calculate the predetermined overhead rate to apply factory overhead.

In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?