Question 1

Jinnah Company applies overhead on the basis of 200% of direct labor cost. Job No. 501 is charged with $240,000 of direct materials costs and $320,000 of manufacturing overhead. The total manufacturing costs for Job No. 501 is

Accepted Answer

- The formula to calculate manufacturing costs is:
Manufacturing Costs = Direct Materials + Direct Labor + Manufacturing Overhead
- We know Direct Materials costs is $240,000
- We don't know Direct Labor costs, but we know that Manufacturing Overhead is charged at 200% of Direct Labor costs. We can use this information to find the Direct Labor cost:
Manufacturing Overhead = 200% x Direct Labor
$320,000 = 2 x Direct Labor
Direct Labor = $160,000
- To find the total manufacturing costs for Job No. 501, we can apply the formula:
Manufacturing Costs = $240,000 + $160,000 + $320,000
Manufacturing Costs = $720,000
Therefore, the best choice is C, with an explanation as shown above.

Question 2

In a job order cost system, it would be correct in recording the purchase of raw materials to debit

Accepted Answer

Raw materials are recorded in the Raw Materials Inventory account because they have not yet been put into production. Once they are used in production, they will be transferred to the Work in Process Inventory account.

Question 3

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

Accepted Answer

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a predetermined overhead rate. This rate is calculated at the beginning of the period by estimating the total amount of overhead costs to be incurred and then dividing that amount by an estimated level of activity such as direct labor hours, machine hours, or units produced. The predetermined overhead rate is then used to allocate overhead costs to individual jobs or products based on the actual level of activity that is incurred.

Question 4

Which of the following is not a control account?

Accepted Answer

The answer of Which of the following is not a...

Question 5

Which of the following statements about under- or overapplied manufacturing overhead is correct?

Accepted Answer

Once the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead will indeed have a zero balance.

Question 6

Overapplied manufacturing overhead exists when overhead assigned to work in process is

Accepted Answer

Overapplied manufacturing overhead occurs when the overhead assigned to work in process exceeds the actual overhead incurred, resulting in a credit balance in the Manufacturing Overhead account at the end of the period.

Question 7

When the company assigns factory labor costs to jobs, the direct labor cost is debited to

Accepted Answer

The answer of When the company assigns factory labor costs...

Question 8

In a manufacturing company, the cost of factory labor consists of all of the following except

Accepted Answer

The cost of factory labor includes gross earnings of factory workers, employer payroll taxes, and fringe benefits incurred by the employer. However, it does not include the net earnings of factory workers, as this refers to what the workers actually take home after taxes and other deductions.

Question 9

A process cost system would be used for all of the following except the

Accepted Answer

A process cost system is used for products that are produced in large quantities and have similar production processes, making it easier to assign costs to each unit of product. While cereal, petroleum, and automobiles are all manufactured in large quantities with standardized processes, the printing of wedding invitations is a custom job that would require a job-order cost system rather than a process cost system.

Question 10

Usually, under- or overapplied overhead is considered to be an adjustment to

Accepted Answer

The answer of Usually, under- or overapplied overhead is considered...

Quiz 14: Job Order Costing