ACCT 2101 Chapter : Chapter 2 Notes Wiley Edited 3

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15 Mar 2019

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The product is usually of a like kind nature. Cost flow- right side of t accumulates; left side assigns. Inventory (asset acct) cost portion spent to sold make all. March 16, 2019 sec xx xx xx (1) (2a) (2b) Record debits to accumulate the bills as they come in. actual costs as they are incurred. The timing does not necessarily relate to the production of the product. The debit side of the account accumulates all of the (3) (4) xx xx xx xx xx xx xx xx (5) xx xx. Credits recorded show the application of overhead to the process as units of product are made. Start with a t account with the debit and credit side headings and formulas. Total estimated annual oh cost $ = pdohr. Other possible terms for the word estimated are projected, budgeted, planned, and expected. Other possible terms for the word activity are units, machine hours, labor.

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pleas help me ASAP

Remnant Carpet Company sells and installs commercial carpeting for office buildings. Remnant Carpet Company uses a A type of cost accounting system that provides for a separate record of the cost of each particular quantity of product that passes through the factory.job order cost system. When a prospective customer asks for a price quote on a job, the estimated cost data are inserted on an unnumbered An account in the work in process subsidiary ledger in which the costs charged to a particular job order are recorded.job cost sheet. If the offer is accepted, a number is assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between the estimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on future jobs. On October 1, Remnant Carpet Company gave Jackson Consulting an estimate of $2,436 to carpet the consulting firmâs newly leased office. The estimate was based on the following data:

Estimated direct materials:
30 meters at $30 per meter	$ 900
Estimated direct labor:
16 hours at $30 per hour	480
Estimated factory overhead (75% of direct labor cost)	360
Total estimated costs	$1,740
Markup (40% of production costs)	696
Total estimate	$2,436

On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation were completed on October 10.

The related The form or electronic transmission used by a manufacturing department to authorize materials issuances from the storeroom.materials requisitions and The form on which the amount of time spent by each employee and the labor cost incurred for each individual job, or for factory overhead, are recorded.time tickets are summarized as follows:

Materials Requisition No.	Description	Amount
112	15 meters at $30	$450
114	19 meters at $30	570

Time Ticket No.	Description	Amount
H10	8 hours at $30	$240
H11	12 hours at $30	360

Required:

Enter amounts as positive numbers.

1. Complete that portion of the job order cost sheet that would be prepared when the estimate is given to the customer.

2. Record the costs incurred, and complete the job order cost sheet.

JOB ORDER COST SHEET

Customer	Jackson Consulting	Date	October 1
		Date wanted	October 10
		Date completed	October 10
		Job. No.
ESTIMATE

Direct Materials

Direct Labor

Summary

Amount

ACTUAL

Direct Labor

Summary

Mat. Req. No.

Description

Amount

Time Ticket No.

Description

Amount

Item

Amount

What is the best explanation for the variances between actual costs and estimated costs. (For this purpose, assume that the additional meters of material used in the job were spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.)

a.)The direct materials cost exceeded the estimate by $120 because 4 meters of materials were spoiled. The direct labor cost exceeded the estimate by $120 because an additional 4 hours of labor were used by an inexperienced employee. The factory overhead cost exceeded the estimate because an additional $90 of factory overhead was allocated because of the increase in direct labor.

b.)Management didn't provide enough direction to complete tasks on budget.

c.)The direct materials cost exceeded the estimate by $75 because 3 meters of materials were spoiled.

d.) The direct labor cost exceeded the estimate by $120 because an additional 4 hours of labor were used by an inexperienced employee.

greenbat203

I. The basic parts of a joborder costing system are the:

A. Cost______________ and _________________ procedures.

B. ____________________ documents.

C. Accountsthat a company uses when it incurs costs for direct ____________,direct ________________, and ___________________.

II. Accounting for materialsrequires three types of entries.

A. With the ______________ of materials,debit Materials Inventory and credit Accounts Payable.

B. With the _______________ of directmaterials to ________________, debit Work in Process Inventory andcredit Materials Inventory.

C. With the transfer of__________________ materials to production, debit Overhead andcredit Materials Inventory.

III. Accounting for labor requirestwo types of entries.

A. For payroll costs incurred for_____________ labor, debit Work in Process Inventory and creditPayroll Payable.

B. For payroll costs incurred for_______________ labor, debit Overhead and credit PayrollPayable.

IV. Accounting for other overhead requires twotypes of entries.

A. Other overhead includes plant____________, property _____________, insurance, and_______________.

B. To record _____________ overhead costs,debit Overhead and credit Cash or Accumulated Depreciation.

C. To record _____________ overheadcosts, debit Work in Process Inventory and credit Overhead.

D. The actual (debits) and estimated(credits) overhead costs are ________________ at the end of theperiod to determine the accuracy of overhead costrecognition.

V. To recordthe transfer of ________________ units, debit Finished GoodsInventory and credit Work in Process Inventory.

VI. When a companyuses a perpetual inventory system, two accounting entries are madewhen products are sold.

A. To record the sold productâs________________, debit Accounts Receivable (or Cash) and creditSales.

B. To record the sold productâsassociated ____________, debit Cost of Goods Sold and creditFinished Goods Inventory.

VII. Each job in production has a job order_________________.

A. Hasspace for direct materials, direct labor, and overhead costs.

B. Includesthe job order number, product specifications, customer name, dateof order, projected completion date, and a cost summary.

C. Forincomplete jobs, they make up the _______________ ledger for theWork in Process Inventory account.

D. When ajob is completed, the costs are totaled on the_____________________.

1. Unit cost is computed to_____________ items in inventory.

2. Product ___________Cost = Total Costs for Job Ã· Number of Good Units Produced

VIII. Job order costing systems are also used in______________ organizations.

A. Job ordercost cards track ________________ contracts.

IX. Overhead costs are allocated in foursteps.

A. Step 1: _____________ the overheadrate.

1. A ________________ overheadrate is calculated as estimated overhead costs divided by estimatedcost driver activity.

B. Step 2:______________ the overhead rate.

1. Costs are assigned by multiplyingthe actual cost _____________ activity by the predeterminedoverhead rate.

C. Step 3:Record ________________ overhead costs

D. Step 4:_________________ applied and actual overhead amounts

1. Ifover- or underapplied amounts are minimal, credit or debit_________________.

2. Ifover- or underapplied amounts are material, adjustments should bemade to the inventory accounts affected.

X. The__________________ approach to applying overhead costs is to use asingle plantwide rate.

XI. The moreaccurate _____________________ approach to applying overhead costscreates many smaller activity pools and establishes separate ratesfor each pool.

carminewhale946

All questions have to do with cost accounting systems,more in particular, process cost systems.

Complete each of the following statements by writing theappropriate words or amounts in the answers blanks.

1-5. Identify whether the process cost or job order cost systemwould be more appropriate for each of the followingbusinesses:
1. accounting firm 1. ____
2. breakfast cereal manufacturer 2. ____
3. ship construction 3. ____
4. pharmaceuticals company 4. ____
5. computer chip manufacturer 5. ____

6. The number of units that could have been completed within agiven accounting period with respect to direct materials andconversion costs is the 6. ____

7. Direct labor and factory overhead are referred to as 7.____

8â9. Oslo Manufacturing incurred $72,000 of direct materialscosts, direct labor costs of $24,500, and factory overhead of$20,500. If 1,000 direct materials equivalent units and 900conversion equivalent units were manufactured, then:
8. The equivalent unit cost for direct materials is 8. $____
9. The equivalent unit cost for conversion is 9. $____

10. The periodic report prepared for each processing department,summarizing (1) the units for which the department is responsibleand their disposition and (2) the costs charged the department andtheir allocation, is termed the 10. ____

11. The method of inventory costing that assumes the unitproduct costs should be determined separately for each period inthe order in which the costs were incurred is 11. ____

12â15. In a process cost system, the cost of goods completed andthe ending inventory valuation are determined by using thefollowing four steps:
12. ____
13. ____
14. ____
15. ____

16â17. The transferred costs of completed production inDepartment A using a process cost system include:
16. ____
17. ____

18â20. The three categories of units to be assigned cost for anaccounting period in a process cost system are:
18. ____
19. ____
20. ____

21â24. Department W had 8,000 units in work in process that were30% converted at the beginning of the period at a cost of $16,400.During the period, 15,000 units of direct materials were added at acost of $48,000, 16,000 units were completed, and 7,000 units were40% completed. The first-in, first-out cost method is used and allmaterials are added at the beginning of the process. Direct laborwas $30,000, and factory overhead was $54,000 during theperiod.
21. The number of equivalent units of conversion for the period was21. ____
22. The total conversion costs for the period were 22. $____
23. The conversion cost of the units started and completed duringthe period was 23. $____
24. The conversion cost of the 7,000 units in process at the end ofthe period was 24. $____

Indicate the titles of the accounts to be debited and creditedin recording the selected transactions given below by inserting theletter or letters of the account titles listed in the appropriatecolumns. (Do not record the amounts.)

ACCOUNTS

A. Accounts Payable E. FactoryOverheadâDepartment A I. Sales

B. Accounts Receivable F.Factory OverheadâDepartment B J. Wages Payable

C. Cash G. Finished GoodsK. Work in ProcessâDepartment A

D. Cost of Goods Sold H.Materials L. Work inProcessâDepartment B


TRANSACTIONS	Debit		Credit
0. Paid cash for wages owed, $47,000.............................................................	J	0. ____	C	0. ____
1-2. Materials requisitioned for use in Department A,$36,000, of which $31,500 entered directly into the product.....................................................		1. ____		2. ____
3-4. Labor in Department A, $13,000, was used directlyin the manufacture of the product.....................................................................................................		3. ____		4. ____
5-6. Factory overhead applied to production inDepartment A, $6 per machine hour.....................................................................................................		5. ____		6. ____
7-8. Goods finished in Department A and transferred toDepartment B, $79,000...............................................................................................................		7. ____		8. ____
9-10. Goodsfinished in Department B and transferred to finished goods,$114,000.............................................................................................................		9. ____		10. ____
11-12. Cost of finishedgoods sold, $126,374.........................................................		11. ____		12. ____

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ACCT 2101 Chapter : Chapter 2 Notes Wiley Edited 3

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