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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

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

3. Post the manufacturing overhead transactions to the Manufacturing Overhead T-account. Is manufacturing overhead underallocated or overallocated? By how much?

Question: Give the journal entry for the completion of a job. How is the accounting equation affected?

Question: What types of companies use job order costing systems?

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

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.
See all solutions

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