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Exam 27: Job Order Cost Accounting

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Question 1

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The Manufacturing Overhead Applied account for Cullverin Manufacturing had activity of $860 in indirect materials and supplies, $992 in indirect labor, and $4,654 in other overhead costs recorded in the account at April 30 of the current year. The Manufacturing Overhead Applied account had a total of $6,740 in overhead applied during April. What is the over- or underapplied overhead for April? Prepare the journal entry to close the related overhead accounts.

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Question 2

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Wilson Enterprises applies overhead based on direct labor cost. The company estimates that their overhead for the year will be $240,000, and direct labor cost to be $300,000. Actual direct labor cost for Martinez Manufacturing was $316,000. The journal entry to record manufacturing overhead would include a:

A) Debit to Work in Process Inventory for $316,000.
B) Credit to Manufacturing Overhead Applied for $252,800.
C) Credit to Work in Process Inventory for $252,800.
D) Credit to Manufacturing Overhead Applied for $316,000.

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

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Question 3

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Acceptable methods for determining the cost of inventory include FIFO, LIFO, weighted average cost, specific identification and standard cost.

Manufacturing costs for each unit produced are calculated by dividing job order costs by-----------.

Morion Hat Manufacturing made the following charge purchases on February 4 of the current year. Felt $5,687; Ribbon $1,234; Straw $6,723; Dye (for the straw)$39; Thread $47; Various plastic fruits, flowers, etc. $179; and Glue $28. Assume that all items purchased were requisitioned for production during the year. Complete one journal entry for all purchases and one summary journal entry dated February 20 for the requisitioning of those materials into production. Also, explain the internal controls applied to safeguard raw materials.

Direct labor costs of $10,000 and indirect labor costs of $1,500 associated with a job would be recorded on the job cost sheet with a corresponding debit to Work in Process for $11,500.

Fill in the blanks for each of the following. (Blanks are indicated by numbers in parentheses.)

At the end of the year, Easton Company had a balance in Manufacturing Overhead of $23,000, and a balance in Manufacturing Overhead Applied of $26,000. When the Manufacturing Overhead account is closed, the Cost of Goods Sold account will:

Finished Goods beginning and ending balances are $23,000 and $17,000, respectively. The cost of goods manufactured for the period was $187,500. Actual manufacturing overhead for the period was $32,000 and applied overhead was $34,000. The adjusted cost of goods sold was:

Purchases of raw materials are debited to the Work in Process Inventory account.

At the end of each year, the underapplied or overapplied overhead is closed to the Work in Process inventory account.

Process cost accounting is appropriate:

If actual overhead costs exceed the overhead applied during the year, the difference represents---------overhead.

The entry to record applied overhead includes a(n)-----------to the Work in Process Inventory account.

Use the following information for the questions. Adams Manufacturing has three jobs in process in October of the current year, B2-19, C3-19, and D4-4. All thr were begun during the first week of October. Job C3-19 was completed on October 10 with total labor costs of $14,750 and total material costs of $8,855 (details of the individual direct material and direct labor costs charged to job C3-19 are given on the Job Order Cost Sheet provided). No other jobs were completed in October. The total balance in Job D4-4 is $8,250 ($4,275 in materials and $3,975 in labor) and in Job B2-19 is $17,850 ($10,425 in materials and $7,425 in labor) before overhead is applied. Overhead is applied based on total direct labor dollars. Estimated total direct labor dollars for the year is $440,000 and total estimated manufacturing overhead is $352,000. -Based on the information given: 1. Determine the overhead rate for Adams Manufacturing; 2. Prepare the journal entry to apply manufacturing overhead to manufacturing process for the month of October; 3. Determine the balance in the Work in Process account at the end of October.

A raw material subsidiary ledger:

A job order cost sheet would be utilized to track the cost of the following costs except for:

The entry to charge work in process inventory with the appropriate amount of applied overhead consists of a debit to Work in Process Inventory and a credit to Manufacturing Overhead Applied.

During the year, a firm's direct labor costs were $126,000. The firm applies overhead at the rate of 82% of direct labor costs. The firm's actual overhead costs for the year were $101,620. 1. What was the amount of overhead applied? 2. Did the firm have overapplied or underapplied overhead for the year? 3. What amount was overapplied or underapplied?

If manufacturing overhead is applied at a rate of $1.62 per direct labor dollar and the Department B employee worked 198 hours at $12.50 an hour on Job L1147, then the applied overhead would be