Warning: foreach() argument must be of type array|object, bool given in /var/www/html/web/app/themes/studypress-core-theme/template-parts/header/mobile-offcanvas.php on line 20

Distinguishing between job order costing and process costing

Would the following companies most likely use job order costing or process costing?

d. A professional service firm

Short Answer

Expert verified

A professional service firm is most likely to use a job-order costing system.

Step by step solution

01

Job order costing system

A job order costing system is used by an organization to identify the total cost of the product or service provided by the company on an individual job basis.

02

Professional service firm

Professional service firms provide services to their client based on different assignments. Hence, they use the job order costing system while computing the service cost.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Question: Wesson Company is a consulting firm. The firm expects to have \(45,000 in indirect costs during the year and bill customers for 6,000 hours. The cost of direct labor is \)75 per hour.

16. Calculate the predetermined overhead allocation rate for Wesson using estimated billable hours for the allocation base.

17. Wesson completed a consulting job for George Peterson and billed the customer for 15 hours. What was the total cost of the consulting job?

18. If Wesson wants to earn a profit equal to 60% of the cost of a job, how much should the company charge Mr. Peterson?

Selected cost data for Classic Print Co. are as follows:

Estimated manufacturing overhead cost for the year

$125,000

Estimated direct labor cost for the year

78,125

Actual manufacturing overhead cost for the year

116,000

Actual direct labor cost for the year

67,000

Requirements

3. Use a T-account to determine the amount of underallocated or overallocated

manufacturing overhead.

June production generated the following activity in Bentley Chassis Companyโ€™s Work-in-Process Inventory account:

June 1 balance

\(36,000

Direct materials used

32,000

Direct labor assigned to jobs

40,000

Manufacturing overhead allocated to jobs

28,000

Additionally, Bentley Chassis has completed Jobs 142 and 143, with total costs of

\)37,000 and $48,000, respectively.

Requirements

1. Prepare the journal entry for production completed in June.

Journalize the following labor-related transactions for Portland Glass Creations at its plant in Portland, Oregon. Assume that the labor has been incurred, but not yet paid.

The T-account showing the manufacturing overhead activity for Aliyah Corp. for 2018 is as follows:

Manufacturing overhead

195000203,000

Requirements

3. Is manufacturing overhead underallocated or overallocated? By how much?

See all solutions

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free