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Chapter 15: Job Order Costing and Analysis

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Financial & Managerial Accounting
Pages: 670 - 715

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60 Questions for Chapter 15: Job Order Costing and Analysis

  1. Question: The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of the end of June, Business Solutions’s job cost sheets show the following total costs accumulated on three furniture jobs.

    Found on Page 670
  2. Question: Assume that your company sells portable housing to both general contractors and the government. It sells jobs to contractors on a bid basis. A contractor asks for three bids from different manufacturers. The combination of low bid and high quality wins the job. However, jobs sold to the government are bid on a cost-plus basis. This means price is determined by adding all costs plus a profit based on cost at a specified percent, such as 10%. You observe that the amount of overhead applied to government jobs is higher than that applied to contract jobs. These allocations concern you.

    Found on Page 670
  3. Assume that Apple produces a batch of 1,000 iPhones. Does it account for this as 1,000 individual jobs or as a job lot? Explain (consider costs and benefits).

    Found on Page 694
  4. Use information in Exercise 15-7 to prepare journal entries for the following events for the month of May.

    Found on Page 698
  5. Refer to the information in QS 15-9. During the month, the jobs used direct labor as shown below. Jobs 1 and 3 are not finished by the end of March, and Job 2 is finished but not sold by the end of March.

    Found on Page 696
  6. Why must a company use predetermined overhead rates when using job order costing?

    Found on Page 695
  7. In December 2016, Shire Computer’s management establishes the 2017 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $747,500 of overhead costs and $575,000 of direct labor cost in year 2017. During March 2017, Shire began and completed Job 13-56.

    Found on Page 698
  8. A company applies overhead at a rate of 150% of direct labor cost. Actual overhead cost for the current period is $950,000, and direct labor cost is $600,000. Prepare the journal entry to close over- or underapplied overhead to Cost of Goods Sold.

    Found on Page 696
  9. How would a hospital apply job order costing? Explain.

    Found on Page 695
  10. Lorenzo Company uses a job order costing system that charges overhead to jobs on the basis of direct materials cost. At year-end, the Work in Process Inventory account shows the following

    Found on Page 699

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