Question
In: Accounting
True Or False Required 1:With job order costing, manufacturing costs incurred are assigned to jobs when...
True Or False
Required 1:With job order costing, manufacturing costs incurred are assigned to jobs when costs can be readily identified with specific customers, jobs, or projects and customized products.
Required 2: The following journal entry would be made when units that have been completed are transferred to the finished goods warehouse:
Debit Finished Goods; Credit Work in Process
Required 3: A flour manufacturer is more likely to use job-order costing than a process costing whereas a manufacturer of customized leather jackets is more likely to use process costing than job-order costing.
Solutions
Expert Solution
Required 1:With job order costing, manufacturing costs incurred are assigned to jobs when costs can be readily identified with specific customers, jobs, or projects and customized products.
The given statement is TRUE as job costing allocate costs based on a specific job order as every client is different and unique.
Required 2: The following journal entry would be made when units that have been completed are transferred to the finished goods warehouse:
Debit Finished Goods; Credit Work in Process
The given statement is TRUE as Finished Goods will increase by the amount WIP decreases as WIP is now converted into Finished Goods.
Required 3: A flour manufacturer is more likely to use job-order costing than a process costing whereas a manufacturer of customized leather jackets is more likely to use process costing than job-order costing.
The given statement is FALSE as Job costing is used for customised orders whereas process costing is used where different processes ( steps after steps ) are involved.
ekkarill92 answered 2 years agoRelated Solutions
Job Order Costing: Wadadli Products uses a job-order costing system Overhead costs are applied to jobs...
Job Order Costing: Wadadli Products uses a job-order costing
system Overhead costs are applied to jobs on the basis of
machine-hours. At the beginning of the year, management estimated
that 170,000 machine-hours would be required for the periods
estimated level of production. The company also estimated $212,500
of fixed manufacturing overhead expenses for the coming period and
variable manufacturing overhead of $1.50 per machine hour.
Required: 1. Compute the company’s predetermined overhead rate. 2.
Assume that during the year of...
Sterling Products Company uses a job- order costing system. The company incurred the following manufacturing costs...
Sterling Products Company uses a job- order costing system. The
company incurred the following manufacturing costs during
March:
a. Purchased materials on credit,$58,800.
b. Issued materials to production as follows: direct,$51,000;
indirect,$111,300.
c. Incurred factory wages,$59,400.
d. Allocated factory wages to production as follows:
direct,$45,000;indirect,$14,900.
e. incurred factory overhead costs on account,$2,500.
f. Recognized other factory overhead costs as follows:
depreciation of equipment,$4,00; depreciation of
building,$5,000;expired insurance,$600; accrued property taxes,
$1,800.
g. Applied factory overhead to production,$32,500.
h. completed jobs...
Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet...
Morrison Company uses a job-order costing system to assign
manufacturing costs to jobs. Its balance sheet on January 1 is as
follows:
Morrison Company
Balance Sheet
January 1
Assets
Cash
$
37,950
Raw materials
$
9,900
Work in process
8,350
Finished goods
31,800
50,050
Prepaid expenses
2,600
Property, plant, and equipment (net)
120,000
Total assets
$
210,600
Liabilities and Stockholders’ Equity
Accounts payable
$
16,200
Retained earnings
194,400
Total liabilities and stockholders’ equity
$
210,600
During January the company completed...
Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet...
Morrison Company uses a job-order costing system to assign
manufacturing costs to jobs. Its balance sheet on January 1 is as
follows:
Morrison Company
Balance Sheet
January 1
Assets
Cash
$
43,950
Raw materials
$
15,200
Work in process
6,100
Finished goods
24,000
45,300
Prepaid expenses
3,125
Property, plant, and equipment (net)
158,000
Total assets
$
250,375
Liabilities and Stockholders’ Equity
Accounts payable
$
7,300
Retained earnings
243,075
Total liabilities and stockholders’ equity
$
250,375
During January the company completed...
Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet...
Morrison Company uses a job-order costing system to assign
manufacturing costs to jobs. Its balance sheet on January 1 is as
follows:
Morrison Company
Balance Sheet
January 1
Assets
Cash
$
40,500
Raw materials
$
15,100
Work in process
6,300
Finished goods
22,650
44,050
Prepaid expenses
3,200
Property, plant, and equipment (net)
140,000
Total assets
$
227,750
Liabilities and Stockholders’ Equity
Accounts payable
$
12,100
Retained earnings
215,650
Total liabilities and stockholders’ equity
$
227,750
During January the company completed...
True or False 1. Job order costing is used by companies that make large or unique...
True or False
1. Job order costing is used by companies that make large or
unique products.
2. In a job order costing system, product costs are traced to
work cells or departments.
3. A process costing system is used by companies that
manufacture large amounts of similar products or liquid
products.
4. In a process costing system, product costs are traced to
individual products.
5. A basic part of a job order costing system is the set of
procedures...
1. Benner Company uses a job-order costing system and applies manufacturing overhead to jobs using a...
1. Benner Company uses a job-order costing system and applies
manufacturing overhead to jobs using a predetermined overhead rate
based on direct labor hours. Manufacturing overhead and direct
labor hours were estimated at $66,000 and 22,000 hours,
respectively. In June, Job #461 was completed. Materials costs on
the job totaled $4,923 and labor costs totaled $2,325 at $7.50 per
hour (310 hours worked on this job). At the end of the year, it was
determined that the company worked 23,975...
The Ilarion Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on...
The Ilarion Manufacturing Company operates a job-order costing
system and applies overhead cost to jobs on the basis of direct
labor cost. Its predetermined overhead rate was based on a cost
formula that estimated $139,500 of manufacturing overhead for an
estimated allocation base of $93,000 direct labor dollars. The
company has provided the following data.
Inventories
Beginning
Ending
Raw materials
$
43,000
$
18,000
Work in process
$
59,000
$
43,000
Finished goods
$
85,000
$
68,000
The following...
The Collins Company uses a job-order costing system and applies manufacturing overhead cost to jobs on...
The Collins Company uses a job-order costing system and applies
manufacturing overhead cost to jobs on the basis of the cost of
materials used in production. At the beginning of the most recent
year, the following estimates were made as a basis for computing
the predetermined overhead rate for the year:
Manufacturing overhead cost: $200,000
Direct materials cost: $160,000
The following transactions took place during the year (all
purchases and services were acquired on account):
a.) Raw materials purchased: $86,000....
ABC, Corp. is a manufacturing firm that uses job-order costing. The company applies overhead to jobs...
ABC, Corp. is a manufacturing firm that uses job-order costing.
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 50,000 machine-hours and incur
$450,000 in manufacturing overhead cost. The following transactions
were recorded for the year: a. Raw materials were purchased,
$325,000. b. Raw materials were requisitioned for use in
production, $175,000 ($100,000 direct and $75,000 indirect). c. The
following employee costs...
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