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Chapter 17: 17-1SE-e (page 938)
Distinguishing between job order costing and process costing
Would the following companies most likely use job order costing or process costing?
e. A landscape contractor
Landscape contractors were most likely to use a job-order costing system.
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Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.
j. A governmental agency that takes bids for specific items it utilizes where each item requires a separate bid.
Oak Outdoor Furniture manufactures wood patio furniture. If the company reportsthe following costs for June 2018, what is the balance in the Manufacturing Overheadaccount before overhead is allocated to jobs? Assume that the labor has been incurred,but not yet paid. Prepare journal entries for overhead costs incurred in June.
Wood | $270,000 |
Nails, glue, stain | 18,000 |
Depreciation on saws | 5,300 |
Indirect manufacturing labor | 45,000 |
Depreciation on delivery truck | 1,700 |
Assembly-line worker’s wages | 51,000 |
Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.
d. Companies that produce large numbers of identical products.
Question: Using job order costing in a service company
Assume that Roth’s accountants are expected to work a total of 8,000 direct labor hours in 2018. Roth’s estimated total indirect costs are $96,000 and the allocation base used is direct labor hours.
Requirements
2. What indirect costs will be allocated to Client 507 if Jack Smith, an accountant at Roth Accounting, works 15 hours to prepare the financial statements?
For the following accounts, indicate what causes the account to increase and decrease. The first account is completed as an example.
Account | Is increased by: | Is decreased by: |
Raw material inventory | Material purchased | Material used |
Work in process inventory | ||
Finished goods inventory | ||
Cost of goods sold |
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