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Exam 2: Job Order Costing and Analysis

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Question 61

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Direct materials and direct labor costs are debited to the Factory Overhead account in a job costing system.

A) True
B) False

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Question 62

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The total cost of completed but undelivered jobs equals the balance in the Work in Process Inventory account.

A) True
B) False

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Question 63

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Time tickets for factory employees during the month of August are summarized as follows: Prepare the necessary journal entries to record factory payroll for direct and indirect labor.

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead rate exceeds the actual overhead incurred during a period.

Large aircraft manufacturers normally use:

Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $300,000, and direct labor costs to be $150,000. Actual overhead costs for the year totaled $330,000, and actual direct labor costs totaled $170,000. At year-end, the balance in the Factory Overhead account is a:

Describe the flow of the raw materials, both direct and indirect, through the inventory accounts from purchase to use.

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

Job order costing applies to manufacturing firms only and not to service firms.

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

Only product costs are recorded on job cost sheets.

If overhead is overapplied, it means that individual jobs have not been charged enough overhead during the year and the cost of goods sold reported is too low.

The rate established at the beginning of a period that uses estimated overhead and an allocation factor such as estimated direct labor, and that is used to assign overhead cost to jobs, is the:

Compared to a general accounting system, a cost accounting system for a manufacturing company emphasizes:

KL Company uses a job order costing system. During the month of July, the following events occurred: (a) Purchased raw materials on credit, $32,000. (b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials. (c) Recorded the factory payroll totaling $37,700, which includes $8,200 indirect labor, to jobs and overhead. Make the necessary journal entries to record the above transactions and events.

At year-end, Marshall Enterprise's Factory Overhead account has a credit balance of $5,000, which is not a material amount. What entry should Marshall make at year-end?

When overhead is underapplied at the end of a period, the adjusting journal entry includes a credit to Cost of Goods Sold.

Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. What journal entry should Andrew use to account for direct materials used in March:

When the actual overhead incurred during an accounting period is more than the overhead applied to jobs, the overhead is said to be ________.

Overapplied or underapplied overhead should be removed from the Factory Overhead account at the end of each accounting period.