Job order costing system

Multiple choice questions (MCQs)

The companies that produce many different products or services usually use:

Which of the following costs is recorded on the job cost sheet?

Which of the following journal entries is correct for the issuance of direct materials to production?

The GSM company uses job order costing system and provides you the following data for the current period:

• Direct materials issued to production: $180,000
• Indirect materials issued to production: $16,000
• Direct labor cost: $214,000
• Manufacturing overhead cost – applied: $226,000
• Manufacturing overhead cost – actual: $250,000

There was no beginning and ending work in process and finished goods inventory. The company uses a predetermined overhead rate to apply manufacturing overhead to work in process (WIP) inventory.

Based on the above information, what is the cost of goods manufactured of GSM Company?

The SK manufacturing company computes predetermined overhead rate on the basis of machine hours in the machining department and direct labor cost in the assembly department. The following estimates were made at the beginning of the year:

Based on the above information, what are the predetermined overhead rates for machining department and assembly department?

Which of the following is a correct journal entry to record direct labor cost?

The ABC company has the following estimated costs for the next year:

• Direct materials: $15,000
• Indirect materials: $5,000
• Direct labor: $55,000
• Salary of production supervisor: $35,000
• Rent on factory equipment: $16,000
• Sales commission: $75,000
• Advertising expenses: $11,000

It is estimated that 53,000 machine hours and 8,000 direct labor hours will be worked during the next year. What will be the predetermined overhead rate if company applies manufacturing overhead cost to jobs on the basis of direct labor hours.

Under job order costing system, which of the following costs would be recorded as debit to manufacturing overhead account?

In a job order costing system, which of the following costs is not an example of manufacturing overhead cost?

Which of the following is a correct journal entry to apply manufacturing overhead cost to jobs?

• Estimated manufacturing overhead cost at the beginning of the year: $100,000
• Estimated direct labor hours at the beginning of the year: 10,000
• Actual manufacturing overhead cost incurred during the year: $118,000
• Actual direct labor hours worked during the year: 11,000

Based on the above information, the cost record of the company will show:

The following information belongs to Delta Company which uses job order costing system:

• Overapplied balance of manufacturing overhead account: $22,000
• Work in process inventory account – ending balance: $10,000
• Finished goods inventory account – ending balance: $15,000
• Cost of goods sold account – ending balance: $25,000

On the basis of ending balances, which of the following is a correct allocation of overapplied overhead balance among work in process, finished goods and cost of goods sold?

The Robert Company uses a job order costing system and computes its predetermined overhead rate at the beginning of each period on the basis of direct labor cost. At the end of current period, the only job in process is the job number 555B. The cost sheet related to job number 555B shows that the following direct materials and direct labor costs were incurred during the period:

• Direct materials cost: $800
• Direct labor cost: $1,200

The work in process inventory account shows a balance of $2,600 at the end of current period.

One the basis of above information, what is the predetermined overhead rate as a percentage of direct labor cost?

Manufacturing overhead would be overapplied if:

The Fine Company uses a job order costing system. The following information belongs to current period:

• Estimated manufacturing overhead at the beginning of the period: $440,000
• Actual manufacturing overhead incurred during the period: $400,000
• Manufacturing overhead underapplied: $16,000
• Predetermined overhead rate: $20 per direct labor hour

On the basis of above information, how many direct labor hours were worked during the current period?

The following cost data relates to job 355C:

• Direct materials: $27,400
• Direct labor cost: $9,600
• Manufacturing overhead cost – applied: $4,000 (160 machine hours @ $25/machine hour)
• Selling and shipping cost: $14,000

The job 355C consists of 2,000 units and has been completed. What is the cost of goods sold per unit of job 355C?

The total cost assigned to job 777C is $24,000 which includes direct materials cost of $6,000. The factory overhead is applied to work in process @ 150% of direct labor cost. What is the amount of direct labor cost charged and factory overhead applied to job 777C?

Which of the following is a correct journal entry to record the transfer of finished goods from production department to finished goods store room?

Which of the following is a correct journal entry to record the shipment of a completed job to to customer?

Which of the following journal entries correctly records the cost of the job shipped to a customer?

The correct journal entry to dispose off an underapplied manufacturing overhead balance to cost of goods sold account is:

Which of the following source documents is used to record the amount of direct materials on the job cost sheet?