Académique Documents
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Which of the following costing methods of valuation are acceptable in a job order costing
system?
a.
b.
c.
d.
Actual
Material
Cost
yes
yes
no
yes
ANSWER:
2.
Actual
Labor
Cost
no
yes
yes
yes
Predetermined
Overhead
Cost
yes
no
yes
yes
EASY
ANSWER:
3.
Standard
Material
Cost
yes
no
yes
yes
EASY
In a normal cost system, debits to Work in Process Inventory would not be made for
a.
b.
c.
d.
actual overhead.
applied overhead.
actual direct material.
actual direct labor.
ANSWER:
EASY
51
52
4.
Chapter 5
ANSWER:
5.
b.
c.
d.
EASY
ANSWER:
Process Costing
heterogeneous products
and small quantities
heterogeneous products
and large quantities
homogeneous products
and small quantities
homogeneous products
and large quantities
EASY
ANSWER:
7.
Job order costing and process costing have which of the following characteristics?
a.
6.
EASY
worksheet.
journal.
subsidiary ledger.
book of original entry.
ANSWER:
EASY
Chapter 5
8.
In a job order costing system, the dollar amount of the entry that debits Finished Goods
Inventory and credits Work in Process Inventory is the sum of the costs charged to all jobs
a.
b.
c.
d.
ANSWER:
9.
EASY
ANSWER:
EASY
ANSWER:
11.
Total manufacturing costs for the year plus beginning Work in Process Inventory cost
equals
a.
b.
c.
d.
10.
53
EASY
A journal entry includes a debit to Work in Process Inventory and a credit to Raw Material
Inventory. The explanation for this would be that
a.
b.
c.
d.
ANSWER:
EASY
54
12.
Chapter 5
The source document that records the amount of raw material that has been requested by
production is the
a.
b.
c.
d.
ANSWER:
13.
EASY
job number.
quantity required.
unit cost.
purchase order number.
ANSWER:
EASY
Which of the following statements about job order cost sheets is true?
a.
b.
c.
d.
All job order cost sheets serve as the general ledger control account for Work in
Process Inventory.
Job order cost sheets can serve as subsidiary ledger information for both Work in
Process Inventory and Finished Goods Inventory.
If material requisition forms are used, job order cost sheets do not need to be
maintained.
Job order cost sheets show costs for direct material and direct labor, but not for
manufacturing overhead since it is an applied amount.
ANSWER:
15.
A material requisition form should show all of the following information except
a.
b.
c.
d.
14.
EASY
Clyde Jenkins is an auditor for the General Accounting Office. Clyde is investigating
invoices sent by Proper Paper Products charging the Army $30 per roll for toilet paper.
Proper Paper uses a job order costing system. Where should Clyde look to find total
production costs related to the toilet paper?
a.
b.
c.
d.
ANSWER:
EASY
Chapter 5
16.
bill of materials.
job order cost sheet.
employee time sheet.
materials requisition.
ANSWER:
17.
EASY
ANSWER:
EASY
The __________ provides management with an historical summation of total costs for a
given product.
a.
b.
c.
d.
ANSWER:
19.
The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger
for
a.
b.
c.
d.
18.
55
EASY
Which of the following journal entries records the accrual of the cost of indirect labor used
in production?
a.
b.
c.
d.
ANSWER:
EASY
56
20.
Chapter 5
In job order costing, payroll taxes paid by the employer for factory employees are
commonly accounted for as
a.
b.
c.
d.
ANSWER:
21.
EASY
the insurance company sent the company a refund of its policy premium.
overhead for insurance was applied to production.
insurance for production equipment expired.
insurance was paid on production equipment.
ANSWER:
EASY
ANSWER:
23.
The logical explanation for an entry that includes a debit to Manufacturing Overhead
control and a credit to Prepaid Insurance is
a.
b.
c.
d.
22.
EASY
ANSWER:
EASY
Chapter 5
24.
In a job order costing system, the use of indirect material would usually be reflected in the
general ledger as an increase in
a.
b.
c.
d.
stores control.
work in process control.
manufacturing overhead applied.
manufacturing overhead control.
ANSWER:
25.
EASY
ANSWER:
EASY
ANSWER:
27.
26.
57
EASY
The journal entry to record the incurrence and payment of overhead costs for factory
insurance requires a debit to
a.
b.
c.
d.
ANSWER:
EASY
58
28.
Chapter 5
The source document that records the amount of time an employee worked on a job and
his/her pay rate is the
a.
b.
c.
d.
ANSWER:
29.
EASY
ANSWER:
EASY
In a job order costing system, the subsidiary ledger for Finished Goods Inventory is
comprised of
a.
b.
c.
d.
ANSWER:
31.
30.
EASY
Underapplied overhead resulting from unanticipated and immaterial price increases for
overhead items should be written off by
a.
b.
c.
d.
ANSWER:
EASY
Chapter 5
32.
ANSWER:
33.
EASY
ANSWER:
EASY
In a perpetual inventory system, a transaction that requires two journal entries (or one
compound entry) is needed when
a.
b.
c.
d.
ANSWER:
35.
34.
59
EASY
Which of the following organizations would be most likely to use a job order costing
system?
a.
b.
c.
d.
ANSWER:
MEDIUM
510
36.
Chapter 5
Which of the following organizations would most likely not use a job order costing
system?
a.
b.
c.
d.
Avondale Shipbuilders
Pickle and Weymann, Attorneys-at-Law
Atlantic City Saltwater Taffy
Century City Construction Company
ANSWER:
37.
EASY
ANSWER:
EASY
When job order costing is used, the primary focal point of cost accumulation is the
a.
b.
c.
d.
department.
supervisor.
item.
job.
ANSWER:
39.
38.
EASY
What is the best cost accumulation procedure to use when many batches, each differing as
to product specifications, are produced?
a.
b.
c.
d.
job order
process
actual
standard
ANSWER:
EASY
Chapter 5
40.
standards
an average cost per unit for all jobs
normal costing
overhead allocation based on the jobs direct labor hours
ANSWER:
41.
EASY
assignment.
origination.
identification.
measurement.
ANSWER:
42.
511
EASY
While the use of standard costing is acceptable for job order costing systems,
actual cost records should still be maintained.
It is normally more time-consuming for a company to use standard costs in a job
order costing system.
Standards can be used in a job order costing system, if the company usually
produces items that are similar in nature.
Standard costs may be used for material, labor, or both material and labor in a job
order costing environment.
ANSWER:
EASY
512
43.
Chapter 5
C Co. uses a job order costing system. During April 2001, the following costs appeared in
the Work in Process Inventory account:
Beginning balance
Direct material used
Direct labor incurred
Applied overhead
Cost of goods manufactured
$ 24,000
70,000
60,000
48,000
185,000
C Co. applies overhead on the basis of direct labor cost. There was only one job left in
WIP Inventory at the end of April which contained $5,600 of overhead. What amount of
direct material was included in this job?
a.
b.
c.
d.
$4,400
$4,480
$6,920
$8,000
ANSWER:
44.
MEDIUM
Q Co. is a print shop that produces jobs to customer specifications. During January 2001,
Job #1253 was worked on and the following information is available:
Direct material used
Direct labor hours worked
Machine time used
Direct labor rate per hour
Overhead application rate per
hour of machine time
What was the total cost of Job #1253 for January?
a.
b.
c.
d.
$3,025
$2,812
$2,770
$2,713
ANSWER:
EASY
$2,500
15
6
$7
$18
Chapter 5
513
Direct Material
$3,400
1,100
Direct Labor
$510
289
Overhead
$255
?
Ark pays its workers $8.50 per hour and applies overhead on a direct labor hour basis.
45.
$0.50
$2.00
$4.25
$30.00
ANSWER:
46.
EASY
How much overhead was included in the cost of Job #461 at the beginning of January?
a.
b.
c.
d.
$144.50
$153.00
$2,200.00
$2,456.50
ANSWER:
47.
EASY
During January, Ark employees worked on Job #479. At the end of the month, $714 of
overhead had been applied to this job. Total Work in Process Inventory at the end of the
month was $6,800 and all other jobs had a total cost of $3,981. What amount of direct
material is included in Job #479?
a.
b.
c.
d.
$677
$1,391
$2,142
$4,658
ANSWER:
MEDIUM
514
48.
Chapter 5
Black Corp. manufactures products on a job order basis. The job cost sheet for Job #329
shows the following for March:
Direct material
Direct labor (100 hours @ $7.25)
Machine hours incurred
Predetermined overhead rate per
machine hour
$5,000
$725
40
$26
At the end of March, what total cost appears on the job cost sheet for Job #329?
a.
b.
c.
d.
$5,725
$5,765
$6,765
$8,325
ANSWER:
49.
EASY
Fabricating
$1,590
?
22
5
429
$2,647
$3,005
$3,093
$3,203
ANSWER:
MEDIUM
Finishing
$580
48
6
15
?
Chapter 5
50.
515
Carolina Co. applies overhead to jobs at the rate of 40 percent of direct labor cost. Direct
material of $1,250 and direct labor of $1,400 were expended on Job #44 during June. At
May 31, the balance of Job #44 was $2,800. The June 30th balance is
a.
b.
c.
d.
$3,210.
$4,760.
$5,450.
$6,010.
ANSWER:
EASY
$120,000
$8.50
120%
Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and
25 percent; the balance of the requisitions was considered indirect. Direct labor hours per job are
2,500; 3,100; and 4,200; respectively. Indirect labor is $33,000. Other actual overhead costs
totaled $36,000.
51.
$42,250
$57,250
$73,250
$82,750
ANSWER:
52.
MEDIUM
$18,250
$26,350
$30,000
$31,620
ANSWER:
MEDIUM
516
53.
Chapter 5
$36,000
$69,000
$93,000
$99,960
ANSWER:
54.
MEDIUM
$69,000
$99,960
$132,960
$144,000
ANSWER:
MEDIUM
If Job #12 is completed and transferred, what is the balance in Work in Process Inventory
at the end of the period if overhead is applied at the end of the period?
a.
b.
c.
d.
$96,700
$99,020
$170,720
$139,540
ANSWER:
56.
55.
DIFFICULT
Assume the balance in Work in Process Inventory was $18,500 on June 1 and $25,297 on
June 30. The balance on June 30 represents one job that contains direct material of
$11,250. How many direct labor hours have been worked on this job (rounded to the
nearest hour)?
a.
b.
c.
d.
751
1,324
1,653
2,976
ANSWER:
MEDIUM
Chapter 5
517
Job #123
Job #125
Job #201
Direct Labor
$4,500
5,000
?
Overhead
?
?
$5,550
XYZ Co. applies overhead for Job #123 at 140 percent of direct labor cost and at 150 percent of
direct labor cost for Jobs #125 and #201. The total cost of Jobs #123 and #125 is identical.
57.
$4,800
$5,550
$6,300
$7,500
ANSWER:
58.
EASY
$8,325
$7,500
$7,000
$5,000
ANSWER:
59.
EASY
$1,950
$1,500
$3,700
$7,500
ANSWER:
MEDIUM
518
60.
Chapter 5
Assume that Jobs #123 and #201 are incomplete at the end of September. What is the
balance in Work in Process Inventory at that time?
a.
b.
c.
d.
$18,920
$22,620
$28,920
$30,120
ANSWER:
MEDIUM
Packaging
1,000
$23,000
$51,750
What is the overhead application rate per machine hour for Processing?
a.
b.
c.
d.
$22.00
$1.24
$17.80
$0.81
ANSWER:
62.
Processing
2,500
$44,500
$55,000
EASY
$23.00
$51.75
$2.25
$0.44
ANSWER:
EASY
Chapter 5
63.
519
Which of the following conclusions would be reasonable to draw from the Baker Co.s
overhead application system?
a.
b.
c.
d.
ANSWER:
EASY
What amount of direct labor cost has been charged to Job #33?
a.
b.
c.
d.
$6,000
$8,640
$7,200
$14,400
ANSWER:
65.
EASY
$30,200
$21,800
$11,000
$10,800
ANSWER:
EASY
520
Chapter 5
9,000
$110,500
$0.20
$5.00
$5.38
$38.89
ANSWER:
EASY
What is the total cost of Job #101 assuming that overhead is applied at the rate of 135
percent of direct labor cost (rounded to the nearest whole dollar)?
a.
b.
c.
d.
$192,650
$268,250
$275,000
$329,675
ANSWER:
68.
What is the overhead application rate if Kool uses a predetermined overhead application
rate based on direct labor hours (rounded to the nearest whole dollar)?
a.
b.
c.
d.
67.
65,000
$350,000
$70,000
EASY
At the end of the last fiscal year, Baehr Company had the following account balances:
Overapplied overhead
Cost of Goods Sold
Work in Process Inventory
Finished Goods Inventory
$ 6,000
$980,000
$ 38,000
$ 82,000
If the most common treatment of assigning overapplied overhead was used, the final
balance in Cost of Goods Sold would have been
a.
b.
c.
d.
$985,340.
$974,660.
$974,000.
$986,000.
ANSWER:
EASY
Chapter 5
69.
521
Carley Products has no Work in Process or Finished Goods inventories at the close of
business on December 31, 2000. The balances of Carleys accounts as of December 31,
2001, are as follows:
Cost of goods sold
Selling & administrative expenses
Sales
Manufacturing overhead control
Manufacturing overhead applied
$2,040,000
900,000
3,600,000
700,000
648,000
$608,000.
$660,000.
$712,000.
undeterminable from the information given.
ANSWER:
70.
ANSWER:
EASY
complicated to access.
manufacturing, but not accounting, oriented.
real-time accessible.
expensive to install, but easier to use.
ANSWER:
72.
MEDIUM
71.
EASY
ANSWER:
MEDIUM
522
73.
Chapter 5
ANSWER:
74.
EASY
effectiveness
complexity
homogeneity
efficiency
ANSWER:
EASY
A company producing which of the following would be most likely to use a price standard
for material?
a.
b.
c.
d.
furniture
NFL-logo jackets
picture frames
none of the above
ANSWER:
76.
After the completion of production, standard and actual costs are compared to determine
the ______ of the production process.
a.
b.
c.
d.
75.
MEDIUM
A company producing which of the following would be most likely to use a time standard
for labor?
a.
b.
c.
d.
mattresses
picture frames
floral arrangements
stained-glass windows
ANSWER:
MEDIUM
Chapter 5
77.
A service organization would be most likely to use a predetermined overhead rate based
on
a.
b.
c.
d.
machine hours.
standard material cost.
direct labor.
number of complaints.
ANSWER:
78.
EASY
ANSWER:
EASY
ANSWER:
80.
79.
523
MEDIUM
a.
b.
c.
d.
(1)
yes
no
no
yes
ANSWER:
(2)
no
yes
no
yes
(3)
no
yes
no
yes
DIFFICULT
524
81.
Chapter 5
can be used only if standard costs are used for materials and labor.
will provide reasonable product cost information only when all jobs utilize
approximately the same quantities of material and labor.
may be maintained using either actual or predetermined overhead rates.
emphasizes that large customers create the most costs even though they also
provide the most revenues.
ANSWER:
82.
DIFFICULT
Kauai Mfg. Co. produces beach chairs. Chair frames are all the same size, but can be made
from plastic, wood, or aluminum. Regardless of frame choice, the same sailcloth is used
for the seat on all chairs. Kauai has set a standard for sailcloth of $9.90 per square yard
and each chair requires 1 square yard of material. Kauai produced 500 plastic chairs, 100
wooden chairs, and 250 aluminum chairs during June. The total cost for 1,000 square
yards of sailcloth during the month was $10,000. At the end of the month, 50 square yards
of sailcloth remained in inventory. The unfavorable material price variance for sailcloth
purchases for the month was
a.
b.
c.
d.
$100.
$495.
$1,090.
$1,585.
ANSWER:
83.
MEDIUM
Use the information from #13. Assuming that there was no sailcloth in inventory at the
beginning of June, the unfavorable material quantity variance for the month was
a.
b.
c.
d.
$495.
$500.
$990.
$1,000.
ANSWER:
MEDIUM
Chapter 5
84.
525
Use the information from #13. Kauai Mfg. Co. could set a standard cost for which of the
following?
a.
b.
c.
d.
Frame
cost
yes
no
yes
no
ANSWER:
Predetermined
OH rate
yes
no
no
yes
d
Labor
rate
yes
no
no
yes
DIFFICULT
SHORT ANSWER/PROBLEMS
1.
2.
526
3.
Chapter 5
4.
5.
Chapter 5
6.
527
Prepare the necessary journal entries from the following information for TriCo, which uses
a perpetual inventory system.
a.
b.
c.
d.
e.
f.
g.
ANSWER:
a.
b.
c.
d.
e.
f.
g.
MEDIUM
56,700
56,700
45,360
8,505
53,865
33,100
12,500
45,600
66,900
66,900
36,410
36,410
97,600
97,600
51,320
51,320
77,600
77,600
528
Chapter 5
$100,300
85,000
$ 63,000
$ 50,000
EASY
8.
What amount of overhead is charged to Jobs #17 and #19? Machine hours are split
between Jobs #17 and #1965 percent and 35 percent, respectively. Actual machine
hours equal budgeted machine hours.
ANSWER:
EASY
9.
Fifty-four percent of raw material belongs to Job #17 and 38 percent belongs to Job #19,
and the balance is considered indirect material. What amount of raw material used was
allocated to overhead as indirect material?
ANSWER:
EASY
10.
Labor cost was split 25 percent and 70 percent, respectively, between Jobs #17 and #19
for direct labor. The remainder was indirect labor cost. What are the total costs of Jobs
#17 and #19?
ANSWER:
DM
MEDIUM
$ 34,020
DL
MOH
Job #17
$23,940
12,500
65,195
$111,715
Job #19
35,000
35,105
$94,045
Chapter 5
11.
529
Can standard costing be used in job order costing? If so, what conditions must exist? If
not, explain why.
ANSWER:
Yes. Firms that use job order costing can also base their costs on standards.
Each job must be fairly similar to each other job. Standards may be used for the prices of
material and labor if the jobs use basically the same kind of material and labor. If jobs are
homogeneous enough, standards can also be used for materials and labor quantities. Some
companies may choose to only use price standards, others only quantity standards, and
others may use both price and quantity standards.
MEDIUM
530
12.
Chapter 5
ABC Company manufactures custom-built conveyor systems for factory and commercial
operations. Lisa French is the cost accountant for ABC and she is in the process of
educating a new employee, Julie English, about the job order costing system that ABC
uses. (The system is based on normal costs; overhead is applied based on direct labor cost
and rounded to the next whole dollar.) Lisa gathers the following job order cost records
for May:
Job No.
Materials
667
669
670
671
672
Direct
Labor
$ 5,901
18,312
406
51,405
9,615
Direct
Applied OH
$1,730
1,810
500
9,500
550
Total
Cost
$ 1,990
2,082
575
10,925
633
$ 9,621
22,204
1,481
71,830
10,798
To explain the missing job number, Lisa informed Julie that Job #668 had been
completed in April. She also told her that Job #667 was the only job in process at the
beginning of May. At that time, the job had been assigned $4,300 for direct material and
$900 for direct labor. At the end of May, Job #671 had not been completed; all others
had. Lisa asked Julie several questions to determine whether she understood the job order
system.
Required: Help Julie answer the following questions:
a.
b.
c.
What was total prime cost incurred for the month of May?
d.
Chapter 5
531
ANSWER:
a.
b.
DM
DL
FOH
c.
JOB $670
$575
$500
= 115%/DL Cost
$4,300
900
1,035 ($900 115%)
$6,235
532
13.
Chapter 5
James Co. uses a job order costing system and has the following information for the first
week of June 2002:
1.
Direct Material
$1,500
960
415
345
652
308
835
$5,015
2.
3.
4.
5.
6.
Required:
a.
Prepare a summary that will show the total cost assigned to each job.
b.
c.
Calculate the cost of the work in process at the end of the week.
Chapter 5
533
ANSWER:
a.
Job No.
498
506
507
508
509
511
512
b.
Actual MOH
Applied MOH
Underapplied
$1,480
1,280
$ 200
c.
JOB 507
508
511
512
Ending WIP
$ 577
723
398
1,105
$2,803
EASY
DM
$1,500
960
415
345
652
308
835
$5,015
DL
$ 464
64
72
168
96
40
120
$1,024
OH
$ 580
80
90
210
120
50
150
$1,280
Total
$2,544
1,104
577
723
868
398
1,105
$7,319
534
14.
Chapter 5
The Watson Tool Corporation, which commenced operations on August 1, employs a job
order costing system. Overhead is charged at a normal rate of $2.50 per direct labor hour.
The actual operations for the month of August are summarized as follows:
a.
b.
Job No.
101
102
103
104
105
c.
Units
10,000
8,800
16,000
8,000
20,000
Material
$4,000
3,600
7,000
3,200
8,000
Direct
labor cost
$6,000
5,400
9,000
4,800
3,600
Direct
labor hours
3,000
2,700
4,500
2,400
1,800
$18,500
15,000
d.
e.
Sales$105,000. All units produced on Jobs 101, 102, and 103 were sold.
Material inventory
b.
c.
d.
e.
Chapter 5
ANSWER:
a.
b.
c.
d.
e.
MEDIUM
535
536
15.
Chapter 5
You are asked to bring the following incomplete accounts of Ticker Printing Inc. up to
date through January 31, 2001. Consider the data that appear in the T-accounts as well as
additional information given in items (a) through (i).
Tickers job order costing system has two direct cost categories (direct material and direct
manufacturing labor) and one indirect cost pool (manufacturing overhead, which is
allocated using direct manufacturing labor costs).
Materials Inventory Control
12/31/2000
Balance 15,000
Work in Process Inventory Control
57,000
Manufacturing Overhead Control
12/31/2000
Balance 20,000
Additional Information:
a.
Manufacturing department overhead is allocated using a budgeted rate set every
December. Management forecasts next years overhead and next years direct
manufacturing labor costs. The budget for 2001 is $400,000 of direct
manufacturing labor and $600,000 of manufacturing overhead.
b.
The only job unfinished on January 31, 2001 is No. 419, on which direct
manufacturing labor costs are $2,000 (125 direct manufacturing labor hours) and
direct material costs are $8,000.
c.
Total material placed into production during January is $90,000.
d.
Cost of goods completed during January is $180,000.
e.
Material inventory as of January 31, 2001 is $20,000.
f.
Finished goods inventory as of January 31, 2001 is $15,000.
g.
All plant workers earn the same wage rate. Direct manufacturing labor hours for
January totals 2,500. Other labor and supervision totals $10,000.
h.
The gross plant payroll on January paydays totals $52,000. Ignore withholdings.
All personnel are paid on a weekly basis.
i.
All actual manufacturing department overhead incurred during January has
already been posted.
Chapter 5
537
Required:
a.
Material purchased during January
b.
Cost of Goods Sold during January
c.
Direct Manufacturing Labor Costs incurred during January
d.
Manufacturing Overhead Allocated during January
e.
Balance, Wages Payable Control, December 31, 2000
f.
Balance, Work in Process Inventory Control, January 31, 2001
g.
Balance, Work in Process Inventory Control, December 31, 2000
h.
Balance, Finished Goods Inventory Control, January 31, 2001
i.
Manufacturing Overhead underapplied or overapplied for January
ANSWER
a.
b.
c.
d.
e.
f.
g.
h.
i.
APPLIED $60,000
ACTUAL 57,000
$ 3,000 overapplied
DIFFICULT
BEGIN = $5,000
BEGIN = $3,000
538
16.
Chapter 5
The Smith Company manufactures special purpose machines to order. On 1/1/2001 there
were two jobs in process, 405 and 406. The following costs were applied to them in
2000:
Job No.
Direct material
Direct labor
Overhead
Total
405
$ 5,000
4,000
4,400
$13,400
406
$ 8,000
3,000
3,300
$14,300
Direct materials
Direct labor
*
*
*
*
*
*
*
407
$3,000
5,000
JOB
408
$10,000
6,000
409
$ 7,000
4,000
Job $405 and Job #406 were completed after incurring additional direct labor costs
of $2,000 and $4,000, respectively
Wages paid to production employees during January totaled $25,000.
Depreciation for the month of January totaled $10,000.
Utilities bills in the amount of $10,000 were paid for December 2000 operations.
Utilities bills totaling $12,000 were received for January operations.
Supplies costing $2,000 were used.
Miscellaneous overhead expenses totaled $24,000 for January.
Actual overhead is applied to individual jobs at the end of each month using a rate based
on actual direct labor costs.
Required:
a.
b.
c.
Chapter 5
539
ANSWER:
a.
b.
DM
DC
MOH
BB
c.
Beg WIP
+ DM
+ DL
+ MOH
End WIP
MEDIUM
JOB
#405
$ 2,000
4,952
13,400
$20,352
JOB
#406
$ 4,000
9,905
14,300
$28,205
$27,700
20,000
21,000
52,000
72,143
$48,557
JOB
#407
$ 3,000
5,000
12,381
$20,381
JOB
#408
$10,000
6,000
14,857
$30,857
JOB
#409
$ 1,000
4,000
9,905
$20,905
= $ 20,000
=
21,000
=
52,000
=
27,700
$120,700
540
17.
Chapter 5
Fred Company employs a job order costing system. Only three jobsJob #105, Job #106,
and Job #107were worked on during November and December. Job #105 was
completed December 10; the other two jobs were still in production on December 31, the
end of the companys operating year. Job cost sheets on the three jobs follow:
Job #105
$16,500
13,000
20,800
$ 9,300
7,000
11,200
4,000
?
8,200
6,000
?
21,300
10,000
?
b.
Raw Material
Work in Process
Finished Goods
$40,000
?
85,000
Chapter 5
541
Required:
a.
Prepare T-accounts for Raw Material, Work in Process Inventory, Finished Goods
Inventory, and Manufacturing Overhead Control. Enter the November 30
inventory balances given previously; in the case of Work in Process Inventory,
compute the November 30 balance and enter it into the Work in Process Inventory
T-account.
b.
Prepare an entry to record the issue of materials into production and post
the entry to appropriate T-accounts. (In the case of direct material, it is not
necessary to make a separate entry for each job.) Indirect materials used
during December totaled $4,000.
2.
Prepare an entry to record the incurrence of labor cost and post the entry
to appropriate T-accounts. (In the case of direct labor, it is not necessary
to make a separate entry for each job.) Indirect labor cost totaled $8,000
for December.
3.
c.
What apparent predetermined overhead rate does the company use to assign
overhead cost to jobs? Using this rate, prepare a journal entry to record the
application of overhead cost to jobs for December (it is not necessary to make a
separate entry for each job). Post this entry to appropriate T-accounts.
d.
As stated earlier, Job #105 was completed during December. Prepare a journal
entry to show the transfer of this job off of the production line and into the finished
good warehouse. Post the entry to appropriate T-accounts.
e.
542
Chapter 5
ANSWER:
a.
RM Inventory
BB 40,000
31,500
b.
c.
1.
WIP Inventory
BB 77,800
29,500 60,700
20,000
32,000
98,600
WIP INV
MOH
RM INV
2.
WIP INV
MOH CONTROL
PAYROLL
3.
MOH CONTROL
A/P
e.
29,500
4,000
33,500
20,000
8,000
28,000
19,000
19,000
d.
FG Inventory
BB 85,000
60,700
FG INV
60,700
WIP INV
106 = $51,300
WIP INV
BB
DM
DC
FOH
MEDIUM
32,000
60,700
98,600 <
107 = $47,300
JOB #105
$50,300
0
4,000
6,400
$60,700
JOB #106
$27,500
8,200
6,000
9,600
$51,300
JOB #107
$21,300
10,000
16,000
$47,300
MOH Control
4,000
8,000 32,000
19,000