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Chapter 17: Q 15E_i (page 941)

Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.

i. A company that makes large quantities of one type of tankless hot water heaters.

Short Answer

Expert verified

Answer:

Process costing system is used by the companies that manufacture large quantities of one type of tankless hot water heaters.

Step by step solution

01

Step-by-Step Solution:

Step 1: Process costing system

The companies that are engaged in manufacturing the same product in large quantity are expected to use the process costing system for determining the cost of the each product manufactured by the company.

02

Classification of costing system according to the characteristics

A company making the large quantities of one type of tankless hot water heaters use process costing system because the company manufacture the heaters in large quantity of one type only.

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Most popular questions from this chapter

June production generated the following activity in Bentley Chassis Company’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.

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?

Root Trailers’ job cost records yielded the following information:

Use the dates in the table to identify the status of each job. Compute the following

balances for Root:

b. Finished Goods Inventory at July 31

Why would the manager of a service company need to use job order costing?

Question: Smith Company expected to incur \(10,000 in manufacturing overhead costs and use 4,000 machine hours for the year. Actual manufacturing overhead was \)9,700, and the company used 4,250 machine hours.

9. Calculate the predetermined overhead allocation rate using machine hours as the allocation base.

10. How much manufacturing overhead was allocated during the year?
See all solutions

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