Don Lieberman and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs worked on during November. Direct materials Auditor labor costs Auditor hours Blossom Crane Cullumber Blossom Inc. $640 $6,400 74 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $54 per auditor hour. The Blossom Inc. job is the only incomplete job at the end of November. Actual overhead for the month was $13,600. (a) Determine the cost of each job. SA Cost 11036 12426 Crane Inc. $450 $6,900 94 6557 Cullumber Inc. $290 $3,675 Balance in service contracts in process account 48 (b) Indicate the balance of the Service Contracts in Process account at the end of November. Balance in operating overhead account 11036 (c) Calculate the ending balance of the Operating Overhead account for November. Dr V

Don Lieberman and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs worked on during November. Direct materials Auditor labor costs Auditor hours Blossom Crane Cullumber Blossom Inc. $640 $6,400 74 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $54 per auditor hour. The Blossom Inc. job is the only incomplete job at the end of November. Actual overhead for the month was $13,600. (a) Determine the cost of each job. SA Cost 11036 12426 Crane Inc. $450 $6,900 94 6557 Cullumber Inc. $290 $3,675 Balance in service contracts in process account 48 (b) Indicate the balance of the Service Contracts in Process account at the end of November. Balance in operating overhead account 11036 (c) Calculate the ending balance of the Operating Overhead account for November. Dr V

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 9P: Channel Products Inc. uses the job order cost system of accounting. The following is a list of the...

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Gerken Fabrication Inc. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of March: a. Compute the total production cost of each job. b. Prepare the journal entries to charge the costs of materials, labor, and factory overhead to Work in Process. c. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. d. Compute the unit cost of each job. e. Compute the selling price per unit for each job, assuming a mark-on percentage of 50%.
The general ledger of Lawson Lumber Co. contains the following control account: If the materials charged to the one uncompleted job still in process amounted to $3,400, what amount of labor and factory overhead must have been charged to the job if the factory overhead rate is 100% of direct labor cost? (Hint: First determine the balance in Work in Process.)
The following information, taken from the books of Herman Brothers Manufacturing represents the operations for January: The job cost system is used, and the February cost sheet for Job M45 shows the following: The following actual information was accumulated during February: Required: 1. Using the January data, ascertain the predetermined factory overhead rates to be used during February, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Prepare a schedule showing the total production cost of Job M45 under each method of applying factory overhead. 3. Prepare the entries to record the following for February operations: a. The liability for total factory overhead. b. Distribution of factory overhead to the departments. c. Application of factory overhead to the work in process in each department, using direct labor hours. (Use the predetermined rate calculated in Requirement 1.) d. Closing of the applied factory overhead accounts. e. Recording under- and overapplied factory overhead and closing the actual factory overhead accounts.
Channel Products Inc. uses the job order cost system of accounting. The following is a list of the jobs completed during March, showing the charges for materials issued to production and for direct labor. Assume that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 200%. Required: Compute the amount of overhead to be added to the cost of each job completed during the month. Compute the total cost of each job completed during the month. Compute the total cost of producing all the jobs finished during the month.
San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in space exploration. As the specifications for the lenses are determined by the customer and vary considerably, the company uses a job-order costing system. Manufacturing overhead is applied to jobs on the basis of direct labor hours, utilizing the absorption- or full-costing method. San Mateos predetermined overhead rates for 20x1 and 20x2 were based on the following estimates. Jim Cimino, San Mateos controller, would like to use variable (direct) costing for internal reporting purposes as he believes statements prepared using variable costing are more appropriate for making product decisions. In order to explain the benefits of variable costing to the other members of San Mateos management team, Cimino plans to convert the companys income statement from absorption costing to variable costing. He has gathered the following information for this purpose, along with a copy of San Mateos 20x1 and 20x2 comparative income statement. San Mateo Optics, Inc. Comparative Income Statement For the Years 20x1 and 20x2 San Mateos actual manufacturing data for the two years are as follows: The companys actual inventory balances were as follows: For both years, all administrative expenses were fixed, while a portion of the selling expenses resulting from an 8 percent commission on net sales was variable. San Mateo reports any over-or underapplied overhead as an adjustment to the cost of goods sold. Required: 1. For the year ended December 31, 20x2, prepare the revised income statement for San Mateo Optics, Inc., utilizing the variable-costing method. Be sure to include the contribution margin on the revised income statement. 2. Describe two advantages of using variable costing rather than absorption costing. (CMA adapted)
Charles Wilson and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November. Waters Inc. Renolds Inc. Bayfield Inc. Direct materials $610 $480 $300 Auditor labor costs $6,300 $7,600 $3,575 Auditor hours 76 90 48 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $55 per auditor hour. The Waters job is the only incomplete job at the end of November. Actual overhead for the month was $13,900.(a) Determine the cost of each job. Cost Waters $ Renolds $ Bayfield $ (b) Indicate the balance of the Service Contracts in Process account at the end of November. Balance in service contracts in process account $ (c) Calculate the ending balance of the Operating Overhead account…
Binus and Associates is an auditing firm that uses job order costing to capture the costsof its audit jobs. There were no audit jobs in process at the beginning of November. Listedbelow are data concerning the three audit jobs conducted during November. Lynn Brian Mike Direct materials $600 $400 $200 Auditor labor costs $5,400 $6,600 $3,375 Auditor hours 72 88 45 Overhead costs are applied to jobs on the basis of auditor hours, and the predeterminedoverhead rate is $50 per auditor hour. The Lynn job is the only incomplete job at the endof November. Actual overhead for the month was $11,000.Instructions:(a) Determine the cost of each job. (b) Indicate the balance of the Service Contracts in Process account at the end ofNovember. (c) Calculate the ending balance of the Operating Overhead account for November. (d) There are two basic types of cost accounting systems: (1) a process cost system and(2) a job order cost system. Explain each of the costing system and…
Landis Company uses a job-order costing system with a predetermined plantwide overhead rate based on direct labor-hours. In an effort to improve its ability to measure job profitability and make decisions, the company is considering allocating some of its overhead costs, such as electrical costs, based on machine-hours instead of direct labor-hours. To further explore the potential benefits of this approach, the company has gathered the following eight weeks of actual (not estimated) data with respect to its electrical costs: Machine-Hours Direct Labor-Hours Electrical Costs Week 1 7,700 8,910 76,200 Week 2 8,900 8,920 83,800 Week 3 8,600 8,870 81,000 Week 4 8,100 8,840 80,800 Week 5 7,600 8,990 79,400 Week 6 7,100 8,940 70,700 Week 7 5,500 8,870 61,500 Week 8 6,800 8,910 73,900 Total 60,300 71,250 607,300 Using the data above, the company…
8. John Morris Associates, a C.PA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data conceming the three audit jobs conducted during November. Aaron Sharon Daron Direct materials Auditor labor costs Auditor hours $550 $5,500 74 $220 $3.400 42 $440 $6,800 06 Overhead costs are applied to jobs on the basis of auditor hours, and the predelermined overhead rate is $53 per auditor hour. The Aaron job is the only incomplete job at the end of November. Actual overhead for the month was $11,000. Instructions (a) Determine the cost of each job. (b) Indicate the balance of the Work in Process account at the end of November (c) Calculate the ending balance of the Manufacturing Overhead account November.
8. John Morris Associates, a C.P.A. firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November.
8. John Morris Associates, a C.P.A. firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November. Aaron Sharon Daron Direct materials $550 $440 $220 Auditor labor costs $5,500 $6,800 $3,400 Auditor hours 74 90 42 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $53 per auditor hour. The Aaron job is the only incomplete job at the end of November. Actual overhead for the month was $11,000. Instructions (a) Determine the cost of each job. (b) Indicate the balance of the Work in Process account at the end of November. (c) Calculate the ending balance of the Manufacturing Overhead account for November.
As an assistant cost accountant for Mississippi Industries, you have been assigned to review the activity base for the predetermined factory overhead rate. The president, Tony Favre, has expressed concern that the over- or underapplied overhead has fluctuated excessively over the years.An analysis of the company’s operations and use of the current overhead rate (direct labor cost) has narrowed the possible alternative overhead bases to direct labor cost and machine hours. For the past five years, the following data have been gathered: Attachment In teams:1. Calculate a predetermined factory overhead rate for each alternative base, assuming that rates would have been determined by relating the total amount of factory overhead for the past five years to the base.2. For each of the past five years, determine the over- or underapplied overhead based on the two predetermined overhead rates developed in part (1).3. Which predetermined overhead rate would you recommend? Discuss the basis for…