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Exam 3: Job-Order Costing

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Question 1

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Job 434 was recently completed. The following data have been recorded on its job cost sheet: The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $12 per machine-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.

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Eggins Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In May, the company completed job Q30I that consisted of 23,000 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job Q30I shows that the job's total cost was $1,292,600. During the month, the actual manufacturing overhead cost incurred was $352,820 and the manufacturing overhead cost applied was $379,500. And during the month, 17,000 completed units from job Q30I were sold. No other products were sold during the month. Required: Determine the unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for May. Show your work!

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Kinstle Inc. uses job-order costing. In September, the company charged the following costs to jobs: direct materials, $39,000; direct labor, $56,000; and manufacturing overhead cost applied, $76,000. The beginning work in process inventory was $12,000 and the ending work in process inventory was $16,000. Required: Determine the cost of goods manufactured for September. Show your work!

Babb Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,000 machine-hours and incur $272,000 in manufacturing overhead cost. The following transactions were recorded for the year: • Raw materials were requisitioned for use in production, $412,000 ($376,000 direct and $36,000 indirect). • The following employee costs were incurred: direct labor, $330,000; indirect labor, $69,000; and administrative salaries, $157,000. • Selling costs, $113,000. • Factory utility costs, $29,000. • Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling, general, and administrative activities. • Manufacturing overhead was applied to jobs. The actual level of activity for the year was 15,000 machine-hours. • Sales for the year totaled $1,282,000. Required: a. Prepare a schedule of cost of goods manufactured in good form. b. Was the overhead underapplied or overapplied? By how much? c. Prepare an income statement for the year in good form. The company closes any underapplied or overapplied overhead to Cost of Goods Sold.

The Donaldson Company uses a job-order costing system. The following data were recorded for July: Overhead is applied to jobs at the rate of 80% of direct materials cost. Jobs 475, 477, and 478 were completed during July and transferred to finished goods. Jobs 475 and 478 have been delivered to the customer. Donaldson's Work in Process inventory balance on July 31 was:

Capalbo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 52,000 labor-hours. The estimated variable manufacturing overhead was $2.78 per labor-hour and the estimated total fixed manufacturing overhead was $1,192,360. The actual labor-hours for the year turned out to be 52,600 labor-hours. The predetermined overhead rate for the recently completed year was closest to:

Malcolm Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The cost records for September will show:

Choice of allocation base should be made based on:

Kelsh Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year: Kelsh estimates that 5,000 direct labor-hours and 10,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:

Currey Inc., which uses job-order costing, has provided the following data for August: $\begin{array} { l r r } \text { Inventories: } & \text { Beginning } & \text { Ending } \\\text { Work in process ..... } & \$ 19,000 & \$ 21,000 \\\text { Finished goods ...... } & \$ 25,000 & \$ 50,000\end{array}$ The unadjusted cost of goods sold (in other words, cost of goods sold before adjusting for any underapplied or overapplied overhead) for August is closest to:

The cost of goods manufactured equals beginning work in process inventory, plus the total manufacturing cost charged to jobs, plus ending work in process inventory.

The applied manufacturing overhead for the year was closest to:

Lietz Corporation has provided the following data concerning manufacturing overhead for January: The company's Cost of Goods Sold was $369,000 prior to adjusting for any underapplied or overapplied overhead. Which of the following statements is true?

The cost of goods sold that appears on the income statement for May and that has been adjusted for any underapplied or overapplied overhead is closest to:

Job 599 was recently completed. The following data have been recorded on its job cost sheet: The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $20 per direct labor-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.

Watwood Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month. The company's cost of goods manufactured for June was $230,000; its beginning finished goods inventory was $34,000; its ending finished goods inventory was $52,000; its manufacturing overhead was underapplied by $1,000. The cost of goods sold that appears on the income statement for June and that has been adjusted for any underapplied or overapplied overhead is closest to:

The cost of goods sold that appears on the income statement for February and that has been adjusted for any underapplied or overapplied overhead is closest to:

The following cost data relate to the manufacturing activities of Newberry Company during the just completed year: The company uses a predetermined overhead rate to apply manufacturing overhead cost to production. The predetermined overhead rate for the year was $15 per machine-hour. A total of 23,000 machine-hours was recorded for the year. Required: a. Compute the amount of underapplied or overapplied overhead cost for the year. b. Prepare a Schedule of Cost of Goods Manufactured for the year.

Which of the following documents is used to specify the type and quantity of materials drawn from the storeroom, and identifies the job to which the costs of the materials are to be charged?

The cost of goods sold that would appear on the income statement for January, after adjustment for any underapplied or overapplied overhead, is closest to: