CHAPTER 2 Job Order Costing Online library download

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ASSIGNMENT CHARACTERISTICS TABLE,Problem Difficulty Time. Number Description Level Allotted min, 1A Prepare entries in a job order cost system and job cost Simple 30 40. 2A Prepare entries in a job order cost system and partial Moderate 30 40. income statement, 3A Prepare entries in a job order cost system and cost of Simple 30 40. goods manufactured schedule, 4A Compute predetermined overhead rates apply overhead Simple 20 30. and calculate under or overapplied overhead, 5A Analyze manufacturing accounts and determine missing Complex 30 40.
2 2 Weygandt Managerial Accounting 7 e Solutions Manual For Instructor Use Only. BLOOM S TAXONOMY TABLE, Weygandt Managerial Accounting 7 e Solutions Manual. Correlation Chart between Bloom s Taxonomy Learning Objectives and End of Chapter Exercises and Problems. Learning Objective Knowledge Comprehension Application Analysis Synthesis Evaluation. 1 Describe cost systems and the Q2 5 Q2 1 Q2 4 BE2 2 E2 6 P2 1A P2 2A. flow of costs in a job order Q2 7 Q2 2 Q2 6 DI2 1 E2 7 P2 3A P2 5A. system Q2 8 Q2 3 BE2 1 E2 1 E2 8 E2 4,E2 3 E2 11, 2 Use a job cost sheet to assign Q2 11 Q2 9 BE2 3 E2 2 E2 10 P2 2A. costs to work in process Q2 12 Q2 10 BE2 4 E2 3 E2 12 P2 5A. BE2 5 E2 6 P2 1A,DI2 2 E2 7 P2 3A, 3 Demonstrate how to determine Q2 15 Q2 13 BE2 6 E2 6 P2 1A E2 5. and use the predetermined Q2 14 BE2 7 E2 7 P2 3A P2 2A. overhead rate DI2 3 E2 8 P2 4A P2 5A,E2 2 E2 11,E2 3 E2 12. 4 Prepare entries for Q2 16 BE2 8 E2 6 E2 11 P2 2A. manufacturing and service jobs BE2 9 DI2 4 E2 7 E2 12 P2 5A. completed and sold E2 2 E2 8 P2 1A,E2 3 E2 10 P2 3A.
5 Distinguish between under and Q2 17 E2 9 P2 3A DI2 5 P2 2A. overapplied manufacturing Q2 18 BE2 10 P2 4A E2 4 P2 5A. overhead E2 13 E2 5, Broadening Your Perspective BYP2 3 CD 2 BYP2 2 BYP2 1. BYP2 4 BYP2 5,ANSWERS TO QUESTIONS, 1 a Cost accounting involves the measuring recording and reporting of product costs A cost. accounting system consists of manufacturing cost accounts that are fully integrated into the. general ledger of a company, b An important feature of a cost accounting system is the use of a perpetual inventory system. that provides immediate up to date information on the cost of a product. 2 a The two principal types of cost accounting systems are 1 job order cost system and. 2 process cost system Under a job order cost system costs are assigned to each job or. batch of goods at all times each job or batch of goods can be separately identified A job. order cost system measures costs for each completed job rather than for set time periods. Under a process cost system product related costs are accumulated by or assigned to. departments or processes for a set period of time Job order costing lends itself to specific. special order manufacturing or servicing while process costing is better suited to similar large. volume products and continuous process manufacturing. b A company can use both types of systems For example General Motors uses process costing. for standard model cars and job order costing for custom made vehicles. 3 A job order cost system is most likely to be used by a company that receives special orders or. custom builds or produces heterogeneous items or products that is the product manufactured or. the service rendered is tailored to the customer or client s requests needs or situation Examples. of industries that use job order systems are custom home builders commercial printing companies. motion picture companies construction contractors repair shops accounting and law firms. hospitals shipbuilders and architects, 4 A process cost system is most likely to be used by manufacturing firms with continuous production. flows usually found in mass production assembly line large volume uniform or relatively similar. product industries Companies producing appliances chemicals pharmaceuticals rubber and tires. plastics cement petroleum and automobiles utilize process cost systems. 5 The major steps in the flow of costs in a job order cost system are 1 accumulating the manufacturing. costs incurred and 2 assigning the accumulated costs to work done. 6 The three inventory control accounts and their subsidiary ledgers are. Raw materials inventory materials inventory records. Work in process inventory job cost sheets,Finished goods inventory finished goods records.
7 The source documents used in accumulating direct labor costs are time tickets and time cards. 8 Disagree Entries to Manufacturing Overhead are also made at the end of an accounting period. For example there will be adjusting entries for factory depreciation property taxes and insurance. 9 The source document for materials is the materials requisition slip and the source document for. labor is the time ticket The entries are,Materials Labor. Work in Process Inventory XX Work in Process Inventory XX. Manufacturing Overhead XX Manufacturing Overhead XX. Raw Materials Inventory XX Factory Labor XX, 2 4 Weygandt Managerial Accounting 7 e Solutions Manual For Instructor Use Only. Questions Chapter 2 Continued, 10 The purpose of a job cost sheet is to record the costs chargeable to a specific job and to determine. the total and unit costs of the completed job, 11 The source documents for charging costs to specific jobs are materials requisition slips for direct. materials time tickets for direct labor and the predetermined overhead rate for manufacturing. 12 The materials requisition slip is a business document used as an authorization to issue materials. from inventory to production It is approved and signed by authorized personnel so that materials may. be removed from inventory and charged to production to specific jobs departments or processes. The materials requisition slip is the basis for posting to the materials inventory records and to the job. cost sheet, 13 Disagree Actual manufacturing overhead cannot be determined until the end of a period of time.
Consequently there could be a significant delay in assigning overhead and in determining the. total cost of the completed job, 14 The relationships for computing the predetermined overhead rate are the estimated annual overhead. costs and an expected activity base such as direct labor hours The rate is computed by dividing. the estimated annual overhead costs by the expected annual operating activity. 15 At any point in time the balance in Work in Process Inventory should equal the sum of the costs. shown on the job cost sheets of unfinished jobs Alternatively posting to Work in Process Inventory. may be compared with the sum of the postings to the job cost sheets for each of the manufacturing. cost elements, 16 Jane is incorrect There is a difference in computing total manufacturing costs In job order costing. manufacturing overhead applied is used whereas in Chapter 1 actual manufacturing overhead. 17 Underapplied overhead means that the overhead assigned to work in process is less than the. overhead incurred Overapplied overhead means that the overhead assigned to work in process. is greater than the overhead incurred Manufacturing Overhead will have a debit balance when. overhead is underapplied and a credit balance when overhead is overapplied. 18 Under or overapplied overhead is not closed to Income Summary The balance in Manufacturing. Overhead is eliminated through an adjusting entry Under or overapplied overhead generally is. considered to be an adjustment of Cost of Goods Sold. Weygandt Managerial Accounting 7 e Solutions Manual For Instructor Use Only 2 5. BRIEF EXERCISE 2 1, Raw Materials Inventory Work in Process Inventory Finished Goods Inventory. 1 Purchases 4 Materials 4 Direct 7 Cost of com 7 Cost of com 8 Cost of goods. used materials used pleted jobs pleted jobs sold,5 Direct labor. 6 Overhead,SOLUTIONS TO BRIEF EXERCISES,Factory Labor Cost of Goods Sold.
Weygandt Managerial Accounting 7 e Solutions Manual. 2 Factory labor 5 Factory labor 8 Cost of goods,incurred used sold. Key to Entries,Accumulation Assignment,1 Purchase raw materials 4 Raw materials are used. 2 Incur factory labor 5 Factory labor is assigned,3 Incur manufacturing 6 Overhead is applied. overhead 7 Completed goods are recognized,8 Cost of goods sold is recognized. Manufacturing Overhead,3 Depreciation 6 Overhead,Insurance applied.
4 Indirect,materials used,5 Indirect,For Instructor Use Only. labor used,BRIEF EXERCISE 2 2,Jan 31 Raw Materials Inventory 4 000. Accounts Payable 4 000,31 Factory Labor 6 000,Factory Wages Payable 5 200. Employer Payroll Taxes Payable 800,31 Manufacturing Overhead 2 000. Utilities Payable 2 000,BRIEF EXERCISE 2 3,Jan 31 Work in Process Inventory 2 800.
Manufacturing Overhead 600,Raw Materials Inventory 3 400. BRIEF EXERCISE 2 4,Jan 31 Work in Process Inventory 5 200. Manufacturing Overhead 800,Factory Labor 6 000,BRIEF EXERCISE 2 5. Job 1 Job 2,Direct Direct Direct Direct,Date Materials Labor Date Materials Labor. 1 31 900 1 31 1 200,1 31 2 200 1 31 1 600,Direct Direct.
Date Materials Labor,1 31 1 400, Weygandt Managerial Accounting 7 e Solutions Manual 2 7. BRIEF EXERCISE 2 6, Overhead rate per direct labor cost is 180 or 900 000 500 000. Overhead rate per direct labor hour is 18 or 900 000 50 000 DLH. Overhead rate per machine hour is 9 or 900 000 100 000 MH. BRIEF EXERCISE 2 7,Jan 31 Work in Process Inventory 28 000. Manufacturing Overhead,40 000 X 70 28 000,Feb 28 Work in Process Inventory 21 000. Manufacturing Overhead,30 000 X 70 21 000,Mar 31 Work in Process Inventory 35 000.
Manufacturing Overhead,50 000 X 70 35 000,BRIEF EXERCISE 2 8. Mar 31 Finished Goods Inventory 50 000,Work in Process Inventory 50 000. 31 Cash 35 000,Sales Revenue 35 000,31 Cost of Goods Sold 20 000. Finished Goods Inventory 20 000,BRIEF EXERCISE 2 9. Service Contracts in Process 28 000,Operating Overhead 8 000.
Service Salaries and Wages 36 000,Service Contracts in Process. 28 000 X 25 7 000,Operating Overhead 7 000, 2 8 Weygandt Managerial Accounting 7 e Solutions Manual. BRIEF EXERCISE 2 10,Shimeca Company,Dec 31 Cost of Goods Sold 1 200. Manufacturing Overhead 1 200,Garcia Company,Dec 31 Manufacturing Overhead 900. Cost of Goods Sold 900,SOLUTIONS FOR DO IT REVIEW EXERCISES.
a Raw Materials Inventory 18 000,Accounts Payable 18 000. Purchases of raw materials on account,b Factory Labor 40 000. Factory Wages Payable 31 000,Employer Payroll Taxes Payable 9 000. To record factory labor costs,c Manufacturing Overhead 15 300. Accumulated Depreciation Buildings 9 500,Utilities Payable 3 100.
Prepaid Property Taxes 2 700,To record overhead costs. Weygandt Managerial Accounting 7 e Solutions Manual 2 9. The three summary entries are,Work in Process Inventory 7 200 9 000 16 200. Raw Materials Inventory 16 200,To assign materials to jobs. Work Process Inventory 4 000 8 000 12 000,Factory Labor 12 000. To assign labor to jobs,Work in Process Inventory 5 200 9 800 15 000.
Manufacturing Overhead 15 000,To assign overhead to jobs. The predetermined overhead for Washburn Company is. 200 000 2 500 hours 80 00, The amount of overhead assigned to number 551 would be. 90 hours 80 00 7 200, The entry to record the assignment of overhead to job number 551 on. January 15th is,January 15 Work in Process Inventory 7 200. Manufacturing Overhead 7 200,To assign overhead to jobs.
2 10 Weygandt Managerial Accounting 7 e Solutions Manual. Finished Goods Inventory 120 000,Work in Process Inventory 120 000. To record completion of Job 310 costing,70 000 and Job 312 costing 50 000. Accounts Receivable 90 000,Sales Revenue 90 000,To record sale of Job 312. Cost of Goods Sold 50 000,Finished Goods Inventory 50 000. To record cost of goods sold for Job 312, Manufacturing overhead applied 130 X 85 000 110 500.
Underapplied manufacturing overhead 115 000 110 500 4 500. Weygandt Managerial Accounting 7 e Solutions Manual 2 11. SOLUTIONS TO EXERCISES,EXERCISE 2 1,a Factory Labor 90 000. Factory Wages Payable 76 000,Employer Payroll Taxes Payable 8 000. Employer Fringe Benefits Payable 6 000,b Work in Process Inventory 90 000 X 85 76 500. Manufacturing Overhead 13 500,Factory Labor 90 000. EXERCISE 2 2,a May 31 Work in Process Inventory 10 400.
Manufacturing Overhead 800,Raw Materials Inventory 11 200. 31 Work in Process Inventory 12 500,Manufacturing Overhead 1 200. Factory Labor 13 700,31 Work in Process Inventory,12 500 X 60 7 500. Manufacturing Overhead 7 500,31 Finished Goods Inventory 7 540. Work in Process Inventory 7 540,2 000 2 500 1 900 1 140.
1 900 X 60,b Work in Process Inventory,May 1 Balance 3 500 May 31 7 540. May 31 Balance 26 360, 2 12 Weygandt Managerial Accounting 7 e Solutions Manual. EXERCISE 2 2 Continued,Job Cost Sheets,Job Beginning Work Direct Direct Manufacturing. No in Process Material Labor Overhead Total,430 1 500 3 500 3 000 1 800 9 800. 431 0 4 400 7 600 4 560 16 560,1 500 7 900 10 600 6 360 26 360.
Direct labor X 60,EXERCISE 2 3,a 1 15 200 or 5 000 6 000 4 200. 2 Last year 70 or 4 200 6 000 this year 80 either 6 400. 8 000 or 3 200 4 000,b Jan 31 Work in Process Inventory 8 000. Weygandt Managerial Accounting 7 e Solutions Manual For Instructor Use Only 2 5 Questions Chapter 2 Continued 10 The purpose of a job cost sheet is to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job 11 The source documents for charging costs to specific jobs are materials requisition slips for direct materials time tickets

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