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Exam 19: Job Order Costing

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Question 31

True/False

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For a service company,such as an accounting firm,each client is considered a job.

A) True
B) False

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Question 32

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Arabica Manufacturing uses a predetermined overhead allocation rate based on the number of machine hours.At the beginning of the year,it estimated total manufacturing overhead costs to be $1,000,000,total number of direct labor hours to be 4,500,and total number of machine hours to be 26,000 hours.What was the predetermined overhead allocation rate? (Round your answer to the nearest cent.)

A) $222.22 per machine hour
B) $32.79 per direct labor hour
C) $38.46 per machine hour
D) $46.51 per direct labor hour

E) B) and C)
F) A) and D)

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Question 33

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Altima,Inc.finished Job A40 on the last working day of the year.It utilized $300 of direct materials and $3,380 of direct labor.Altima uses a predetermined overhead allocation rate based on a percentage of direct labor costs,which has been fixed at 40%.The entry to record the completion of the job should involve a ________.

At the end of the year,Metro,Inc.has an unadjusted credit balance in the Manufacturing Overhead account of $750.Which of the following is the year-end adjusting entry needed to adjust the account?

On January 1,Standard Manufacturing had a beginning balance in Work-in-Process Inventory of $80,900 and a beginning balance in Finished Goods Inventory of $21,000.During the year,Standard incurred manufacturing costs of $354,000. During the year,the following transactions occurred: Job A-12 was completed for a total cost of $124,000 and was sold for $128,000. Job A-13 was completed for a total cost of $202,000 and was sold for $211,000. Job A-15 was completed for a total cost $63,000 but was not sold as of year-end. The Manufacturing Overhead account had an unadjusted credit balance of $12,000 and was adjusted to zero at year-end. What was the amount of gross profit reported by Standard at the end of the year?

Brink Financial Advisors provides accounting and finance assistance to customers in the retail business.Brink has four professionals on staff,plus an office with six clerical staff.Total compensation,including benefits,for the professional staff runs up to $800,000 per year,and normal billable hours are about 3,400 billable hours per year.The professional staff keep detailed time sheets organized by client number.The total office and administrative costs for the year are $290,000. Brink allocates office and administrative costs to clients monthly,using a predetermined overhead allocation rate based on billable hours.During July,Brink's professionals spent 43 hours on their client,Waseca Sales.Brink adds a 30% markup on its costs to calculate the amount billed to the customer.How much gross profit did Brink earn from Waseca Sales in July? (Round any intermediate calculations to two decimal places,and your final answer to the nearest whole number.)

Caltran,Inc.completed manufacturing Job 445.It included $390 of direct materials cost,$1,220 of direct labor cost,and $500 of allocated manufacturing overhead.Which of the following is the correct journal entry needed to record the completed job?

Which of the following will be categorized as a manufacturing overhead cost?

Work-in-Process Inventory is debited when indirect labor costs are incurred in a job order costing system.

The total amount of manufacturing overhead costs incurred during the period is recorded on the credit side of the Manufacturing Overhead account.

Baptiste Accounting Services expects its accountants to work a total of 32,000 direct labor hours per year.The company's estimated total indirect costs are $155,000.The direct labor rate is $105 per hour.The company uses direct labor hours as the allocation base for indirect costs.If Baptiste performs a job requiring 49 hours of direct labor and bills the client using a standard markup of 40% of costs,calculate the amount of the client's bill.(Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

Venus Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,it estimated the manufacturing overhead rate to be 20% of the direct labor cost.In the month of June,Venus completed Job 13C and its details are as follows: $\begin{array} { | l | r | } \hline \text { Direct materials cost } & \$ 6,680 \\\hline \text { Direct labor cost } & \$ 23,000 \\\hline \text { Direct labor hours } & 34 \text { hours } \\\hline \text { Units of product produced } & 250 \\\hline\end{array}$ What is the total cost incurred for Job 13C?

Which of the following is true about ERP systems?

Oxford Manufacturing Company completed jobs that cost $48,000 to produce.In the same period, the company sold jobs for $102,000 that cost $53,000 to produce.Prepare the journal entries for the completion and sales of the jobs.All sales are on account.Omit explanations.

The journal entry for adjustment of overallocated manufacturing overhead includes a ________.

Lake Country Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances.Lake Country has four public relations specialists plus an office staff.At the beginning of the year,Lake Country estimated the total cost of salaries and benefits for the public relations specialists at $656,000 and a total of 8,000 billable hours for the year.The office and administrative costs were estimated at $392,000.The allocation base for office and administrative costs is billable hours.In June,Lake Country signed a contract for a Russian ballet performance.It negotiated a price of $6,700 for its services.When the job was complete,Lake Country's records showed that it had logged 37.5 billable hours.What was the amount of gross profit that Lake Country made on the job?

The cost of indirect materials is transferred out of the Manufacturing Overhead account and accumulated in the Raw Materials Inventory account.

Define a process costing system and list two types of businesses that would use a process costing system.

On June 30,Coral,Inc.finished Job 750 with total job costs of $4,200,and transferred the costs to Finished Goods Inventory.On July 6,it completed the sale of the goods to a customer for $5,900 cash.Which of the following is the correct journal entry to record the cost of goods sold?

Neptune Accounting Services expects its accountants to work for 28,000 direct labor hours per year.The company's estimated total indirect costs are $220,000.The direct labor rate is $70 per hour.The company uses direct labor hours as the allocation base for indirect costs.If Neptune performs a job requiring 20 hours of direct labor,what is the total job cost? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)