Chapter 17: Q.17-3RQ (page 937)
Question: What types of companies use process costing systems?
Answer:
Soft drink companies, surfboard manufacturers, and medical equipment manufacturers use the process costinh system for computing the cost of production.
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Question: Using job order costing in a service company
Roth Accounting pays Jack Smith $90,000 per year.
Requirements
2. What direct labor cost would be assigned to Client 507 if Smith works 15 hours to prepare Client 507’s financial statements?
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:
a. Work-in-Process Inventory at July 31
Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.
f. Allocated manufacturing overhead to jobs, 200% of direct labor costs.
Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.
h. Sold inventory on account, \(22,000; cost of goods sold, \)18,000.
Young Foundry uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based on the machine hours required. At the beginning of 2018, the company expected to incur the following:
Manufacturing overhead costs | \(840,000 |
Direct labor cost | 1,480,000 |
Machine hours | 70,000 hours |
At the end of 2018, the company had actually incurred:
Direct labor cost | \)1,230,000 |
Depreciation on manufacturing plant and equipment | 620,000 |
Property taxes on plant | 35,500 |
Sales salaries | 26,000 |
Delivery driver’s wages | 22,500 |
Plant janitor’s wages | 17,000 |
Machine hours | 60,000 hours |
Requirements
1. Compute Young’s predetermined overhead allocation rate.
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