1. Answer the following questions:(Horngrens)

1. Distinguish between job order costing and process costing?

1. Why do managers need to know the cost of their products?

1. What is the purpose of a job cost record?

1. Explain the difference between cost of goods manufactured and cost of goods sold.

1. Define the following terms:

1. Job order costing system:

1. Process costing system:

1. Underallocated overhead:

1. Overallocated overhead:

ing for materials

Maestro manufactures backpacks. Its plant records include the following materials-related data:

Raw Materials Inventory beginning balance	35,200
Purchases of canvas, on account		68,957
Purchases of sewing lubricating oil, on account	1,258
Materials requisitions:
Canvas					65,231
Sewing machine lubricating oil		4,561
Canvas red color				5,632

Journalize the entries to record the transactions, post to the Raw Materials Inventory account, and determine the ending balance in Raw Materials Inventory.

Date	Accounts and Explanation	Debit	Credit

Allocating overhead

A. Job 701 includes direct materials costs of $650 and direct labor costs of $451. If the predetermined overhead allocation rate is 65% of direct labor cost, what is the total cost assigned to Job 701?

Direct materials
Direct labor
Manufacturing overhead
Total cost of Job 701

B. Job 703 includes direct materials costs of $980 and direct labor costs of $524. If the predetermined overhead allocation rate is 72% of direct labor cost, what is the total cost assigned to Job 703?

Direct materials
Direct labor
Manufacturing overhead
Total cost of Job 703

Calculating predetermined overhead allocation rate, allocating overhead

Milestone Company estimates the company will incur $988,900 in overhead costs and 6,100 direct labor hours during the year. Actual direct labor hours were 4,500. Calculate the predetermined overhead allocation rate, and prepare the journal entry for the allocation of overhead.

Predetermined Overhead Allocation Rate
=	Total estimated overhead cost
Total estimated quantity of the overhead allocation base
	=

Allocated Manufacturing Overhead Cost	=	Predetermined Overhead Allocation Rate		Actual Quantity of the Allocation Based used by Each Job
	=

Using job order costing in a service company

1. Blake Accounting pays Jaclyn Sawyer $75,250 per year.

Requirements

1. What is the hourly cost to Blake Accounting of employing Sawyer? Assume a 30-hour week and a 46-week year.
2. What direct labor cost would be assigned to Client 508 if Sawyer works 18 hours to prepare Client 508's financial statements?
3. What direct labor cost would be assigned to Client 509 if Sawyer works 19.5 hours to prepare Client 509's financial statements?
4. What direct labor cost would be assigned to Client 510 if Sawyer works 12 hours to prepare Client 510's financial statements?

1. Cash Accounting pays Tom Sawyer $82,352 per year.

Requirements

1. What is the hourly cost to Cash Accounting of employing Sawyer? Assume a 32-hour

week and a 48-week year.

2. What is the hourly cost to Cash Accounting of employing Sawyer? Assume a 34-hour

week and a 49-week year.

3. What is the hourly cost to Cash Accounting of employing Sawyer? Assume a 25-hour

week and a 42-week year.

4. What is the hourly cost to Cash Accounting of employing Sawyer? Assume a 37-hour

week and a 49-week year.

Answer rating: 100% (QA)

Job order costing and process costing Job order costing tracks costs by individual jobsorders It is used in industries where products are custommade t... View the full answer