Question

Clicker Assignment: Ch. 10 & Job Order Costing Clicker questions will be asked in class based on your completion of this preparation guide. Example in class question: What is the answer to Question 2? You will not have time to complete this guide in class!  

1. Classify each cost as direct materials (DM), direct labor (DL), manufacturing overhead (MOH), or a period cost for a shoe manufacturer.

Leather                                                                         DM       DL         MOH    Period Cost

Utility bill for the manufacturing plant                           DM       DL         MOH    Period Cost

Depreciation expense on accounting dept. copier           DM       DL         MOH    Period Cost

Wages of production line employees                              DM       DL        MOH    Period Cost

Wages of sales employees                                             DM       DL        MOH    Period Cost

Shoe laces                                                                    DM       DL         MOH    Period Cost

Plant supervisor                                                            DM       DL         MOH    Period Cost

Depreciation expense on sewing machines                     DM       DL         MOH    Period Cost

2. Dixon Company reported the following year-end information:

Beginning raw materials inventory                30,000

Ending raw materials inventory                     48,000

Beginning work in process inventory             108,000

Ending work in process inventory                  90,000

Raw Materials purchased                               110,000

Direct Labor                                                    96,000

Manufacturing Overhead                               77,000

What is Dixon Company’s cost of direct materials used?

3. Given the following information, solve for Cost of Goods Sold (COGS).  

Raw Materials Inventory, January 1, 2016                      $14,500

Raw Materials Inventory, December 31, 2016                $16,000

Work in Process Inventory, January 1, 2016                    $30,000

Work in Process Inventory, December 31, 2016              $24,000

Finished Goods Inventory, January 1, 2016                     $10,000

Finished Goods Inventory, December 31, 2016               $12,000

Cost of Goods Manufactured                                         $140,000

4. Answer the questions below to describe the flow of costs in a Job Order Costing system.  

1. What are the three categories of manufacturing costs?  

2. What account is increased when manufacturing costs are assigned to a Job?

3. What account is increased when transferring the cost of a completed job?

4. What account is increased when a completed job is sold?

5. The Anderson Company estimates that total manufacturing overhead for the year will be $15,000,000 and total machine hours will be 200,000 hours. However, the actual manufacturing overhead is $8,000,000 and the actual machine hours are 100,000 hours. If the company uses a predetermined overhead rate based on machine hours for applying overhead, what is the predetermined overhead rate?

PLEASE ANSWER ALL QUESTIONS

Answer 1

1.

Particulars	Type of cost
Leather	Direct material
Utility bill for the manufacturing plant	Manufacturing overhead
Depreciation expense on accounting department copier	Period cost
Wages of production line employees	Direct labor
Wages of sales employees	Period cost
Shoe laces	Direct material
Plant supervisor	Manufacturing overhead
Depreciation expense on sewing machine	Manufacturing overhead

2. Direct material used = Beginning raw material inventory + Raw material purchases - Ending raw material inventory

= 30,000 + 110,000 - 48,000

= $92,000

3. Cost of goods sold = Finished goods inventory, January 1, 2016 + Cost of goods manufactured - Finished goods inventory, December 31, 2016

= 10,000 + 140,000 - 12,000

= $138,000

4. (a) The three categories of manufacturing costs are: direct materials cost, direct labor cost and manufacturing overhead.

(b) Work in process account will increase when manufacturing cost are assigned to a job

(c) Finished goods account is increased when transferring the cost of a completed job.

(d) Cost of goods sold account is increased when a completed job is sold.

5. Predetermined overhead is calculated based on estimated not actual overhead.

Predetermined overhead rate = $15,000,000/200,000 = $75 per hour