Answer The Following Cost Accounting Questions Related To JO ✓ Solved

Answer the following cost accounting questions related to jo

Answer the following cost accounting questions related to job order costing, process costing, and overhead. Question 7: Alaska Corporation purchased, on account, 6,600 pounds of raw materials at $6.50 per pound on January 2, 2019. The production manager requisitioned and received 2,350 pounds of raw material into production on January 15. Use this information to prepare the General Journal entries (without explanation) for January 2 and January 15. If no entry is required then write "No Entry Required." General Journal: Date Accounts Debit Credit 1/2/19

Question 8: Warren Company uses a job order cost system and applies overhead based on estimated rates. The overhead application rate is based on total estimated overhead costs of $280,000 and direct labor hours of 20,000. During the month of February 2019, Job 2-1 incurred direct labor of 450 hours. Use this information to prepare the end of the month application General Journal entry (without explanation) of factory overhead for Job 2-1 for the month. If no entry is required then write "No Entry Required." General Journal: Date Accounts Debit Credit 2/28/19

Question 9: During March 2019, Virginia Bay Corporation recorded $275,000 of costs related to factory overhead. Virginia Bay's overhead application rate is based on direct labor hours. The preset formula for overhead application estimated that $256,000 would be incurred, and 6,000 direct labor hours would be worked. During March, 11,000 hours were actually worked. Use this information to determine the standard overhead rate. (round & enter any final dollar answers to the nearest cent): YOUR ANSWER:

Question 10: During March 2019, Roberts Corporation recorded $242,000 of costs related to factory overhead. Alaska's overhead application rate is based on direct labor hours. The preset formula for overhead application estimated that $250,000 would be incurred, and 12,500 direct labor hours would be worked. During March, 12,300 hours were actually worked. Use this information to determine the amount of overhead over or under applied. Enter overapplied overhead as a negative number. (round & enter any final dollar answers to the nearest whole dollar) YOUR ANSWER:

Question 11: On March 31, 2019, Dorchester Corporation recorded the following factory overhead costs incurred: Factory Manager Salary $5,500; Factory Utilities 2,800; Machinery Depreciation 9,000; Machinery Repairs 1,800; Factory Rent 2,000. The overhead application rate is based on direct labor hours. The preset formula for overhead application estimated that $22,000 would be incurred, and 2,000 direct labor hours would be worked. During March, 650 hours were actually worked on Job Order 3-1 and 1,200 hours were actually worked on Job Order 3-2. Use this information to prepare the March 31 General Journal entries, without explanations, for the: 1) to record the factory overhead costs 2) the allocation of factory overhead to Job Order 3-1 and 3-2 3) the adjusting entry to dispose of any over or under application of factory overhead.

Question 12: March 1, 2019, Dorchester Company's beginning work in process inventory had 7,000 units. This is its only production department. Beginning WIP units were 50% complete as to conversion costs. Dorchester introduces direct materials at the beginning of the production process. During March, all beginning WIP was completed and an additional 13,500 units were started and completed. Dorchester also started but did not complete 5,500 units. These units remained in ending WIP inventory and were 60% complete as to conversion costs. Dorchester uses the weighted average method. Use this information to determine for March 2019 the equivalent units of production for conversion costs. (Round & enter final answers to: the nearest whole dollar for total dollar answers, nearest penny for unit costs or nearest whole number for units) YOUR ANSWER:

Question 13: Dorchester Company, on March 1, 2019 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. On March 1, Dorchester started into production 18,500 units. At the end of the month there were 11,000 units completed and transferred into the Finished Goods Inventory. The ending WIP was 45% complete with respect to conversion. For the month of March the following costs were incurred and recorded in the WIP: Direct Material $11,000 Direct Labor 17,000 Factory Overhead 25,000. Dorchester uses the weighted-average process costing method. Use this information to determine the cost per equivalent unit of conversion for the month of March: (Round & enter final answers to the nearest cent.) YOUR ANSWER:

Question 14: Manufacturing costs or product costs consist of: Question 14 options: A) direct materials, direct labor, and factory overhead. B) direct materials and direct labor. C) factory overhead. D) None of these. E) direct labor and factory overhead.

Question 15: Under normal circumstances, the Work in Process account used in a job order cost system: Question 15 options: A) will include only charges for direct labor and direct material. B) will include charges for direct labor, direct material, and actual overhead. C) None of these. D) will include charges for direct labor, direct material, and applied overhead. E) will include only charges for direct materials and applied overhead.

Question 16: Boulder Company uses a job order cost system and applies overhead based on estimated rates. The overhead application rate is based on total estimated overhead costs of $300,000 and direct labor hours of 60,000. For job 8365, direct labor hours were 500. Question 16 options: A) Overhead Expense should be credited for $3,000. B) Factory Overhead should be credited for $3,000. C) Overhead Expense should be debited for $3,000. D) None of these. E) Factory Overhead should be debited for $3,000.

Question 17 (2 points): Which of the following sequences describes cost flow in a job cost system? Question 17 options: A) Materials, work in process, cost of goods sold, finished goods. B) Work in process, materials, cost of goods sold, finished goods. C) Work in process, materials, finished goods, cost of goods sold. D) None of these. E) Materials, cost of goods sold, work in process, finished goods.

Question 18 (2 points): An equivalent unit of material is equal to: Question 18 options: A) the amount of material necessary to complete one unit of production. B) fifty percent of the material cost of a unit of finished goods. C) a unit of work in process inventory. D) the amount of material necessary to start a unit of production into work in process. E) None of these.

Question 19 (2 points): Which of the following statements is true regarding average fixed costs? Question 19 options: A) Average fixed costs per unit fall as the level of activity rises. B) Average fixed costs per unit remain fixed regardless of level of activity. C) Average fixed costs per unit rise as the level of activity rises. D) Average fixed costs per unit cannot be determined. E) Average fixed costs per unit rise as the level of activity rises.

Question 20 (2 points): Variable costs are expenses that ________. Question 20 options: A) remain constant on a per-unit basis but change in total based on activity level B) remain constant on a per-unit basis and remain constant in total regardless of activity level C) decrease on a per-unit basis as activity level increases D) remain constant in total regardless of activity level within a relevant range E) none of these answers is correct

Question 21 (2 points): In a job order cost system, indirect labor incurred is debited to which account? Question 21 options: A) work in process inventory B) finished goods inventory C) manufacturing overhead D) cost of goods sold E) any of these is correct

Paper For Above Instructions

Introduction and overview

This assignment combines journal entries, overhead allocation, and cost-flow reasoning across job order costing and process costing contexts. The standard framework used in cost accounting relies on identifying direct materials, direct labor, and overhead as the primary cost pools, then applying overhead via predetermined rates and tracking the flow of costs through work in process, finished goods, and cost of goods sold. When overhead is applied, the typical journal entry debits work in process and credits overhead control (or overhead applied), reflecting the movement of costs from the overhead pool to the units in production. Journal entries for purchases and transfers between raw materials and work in process are governed by the basic flow of materials, labor, and overhead through the production cycle (Garrison, Noreen, Brewer, 2014; Horngren et al., 2013).

Q7 – Journal entries for raw materials purchase and requisition

Purchase of raw materials: 6,600 pounds × $6.50 = $42,900. Entry: Dr Raw Materials Inventory $42,900; Cr Accounts Payable $42,900. Requisition into production: 2,350 pounds × $6.50 = $15,275. Entry: Dr Work in Process Inventory $15,275; Cr Raw Materials Inventory $15,275. These entries reflect the conversion of raw materials into work in process and the initiation of production, consistent with standard cost-flow principles (Horngren et al., 2013).

Q8 – Overhead application for Job 2-1

Predetermined overhead rate = $280,000 / 20,000 hours = $14.00 per direct labor hour. For 450 hours, overhead applied = 450 × $14.00 = $6,300. Entry: Dr Work in Process Inventory $6,300; Cr Factory Overhead (Applied) $6,300. This shows the allocation of overhead into WIP for the month (Garrison et al., 2014; Hilton et al., 2009).

Q9 – Standard overhead rate

Estimated overhead = $256,000; Estimated direct labor hours = 6,000. Standard overhead rate = $256,000 / 6,000 hours = $42.6667 per direct labor hour, rounded to $42.67 per hour. This rate forms the basis for overhead allocation during March (Drury, 2013; Blocher et al., 2019).

Q10 – Overhead under- or over-applied

Predetermined rate = $250,000 / 12,500 hours = $20.00 per hour. Applied overhead for 12,300 hours = 12,300 × $20 = $246,000. Actual overhead incurred = $242,000. Overhead is overapplied by $4,000 (since $246,000 applied > $242,000 incurred). Report as -$4,000 (per instructions). The treatment of under- or over-applied overhead is typically closed to cost of goods sold or allocated to WIP/FG depending on policy (Garrison et al., 2014; Horngren et al., 2013).

Q11 – Dorchester March 31 entries for overhead costs, allocation, and adjustment

Total overhead costs incurred: $5,500 + $2,800 + $9,000 + $1,800 + $2,000 = $21,100. Predetermined overhead rate: $22,000 / 2,000 hours = $11.00 per direct labor hour. Hours charged: 650 on 3-1 and 1,200 on 3-2, total 1,850 hours. Allocation to jobs: 650 × $11.00 = $7,150 to 3-1; 1,200 × $11.00 = $13,200 to 3-2. Overhead control entry: Dr Factory Overhead $21,100; Cr various payable accounts for salaries, utilities, depreciation, repairs, rent. Allocation entries: Dr Work in Process – 3-1 $7,150; Dr Work in Process – 3-2 $13,200; Cr Factory Overhead $20,350. Under- or over-application: Debit COGS or similar for the remaining $750 to dispose of the under-applied overhead (since actual $21,100 vs allocated $20,350). These steps align with standard MOH accounting in job order settings (Horngren et al., 2013; Hilton et al., 2009).

Q12 – Equivalent units of conversion (March; weighted-average)

Beginning WIP: 7,000 units at 50% conversion. All beginning WIP completed during March. Started and completed: 13,500 units. Ending WIP: 5,500 units at 60% conversion. Under weighted-average, EUP for conversion = units completed and transferred (7,000 + 13,500 = 20,500) plus ending WIP conversion (5,500 × 0.60 = 3,300) = 23,800 equivalent units. Therefore, conversion cost per EUP is not needed for the prompt’s data in terms of dollars here; the EUP quantity is 23,800 units. This illustrates the method used to compute EUP for conversion costs in weighted-average costing (Garrison et al., 2014; Drury, 2013).

Q13 – Cost per equivalent unit of conversion (March; weighted-average)

Total conversion costs for March = Direct Labor $17,000 + Factory Overhead $25,000 = $42,000. Ending WIP units = 7,500, 45% complete = 3,375 conversion units; Units completed and transferred = 11,000. EUP for conversion = 11,000 + 3,375 = 14,375. Cost per conversion EUP = $42,000 / 14,375 ≈ $2.92 per conversion unit (rounded to nearest cent). Materials are separate in this problem, as materials are added at the beginning, but the prompt asks specifically for conversion cost per EUP (Horngren et al., 2013; Blocher et al., 2019).

Q14–Q21 – Conceptual and multiple-choice questions

Q14: Manufacturing costs or product costs consist of A) direct materials, direct labor, and factory overhead. Q15: Under normal circumstances, the Work in Process account used in a job order cost system D) will include charges for direct labor, direct material, and applied overhead. Q16: Overhead allocation calculation for job 8365 yields $2,500, which is not among the provided options; the correct selection is D) None of these (the rate is $5 per direct labor hour, and 500 hours × $5 = $2,500). Q17: The correct sequence describing cost flow in a job cost system is D) None of these (the standard flow is Materials → Work in Process → Finished Goods → Cost of Goods Sold; the closest correct option would be “Materials, work in process, finished goods, cost of goods sold,” not present as given). Q18: An equivalent unit of material is equal to A) the amount of material necessary to complete one unit of production. Q19: Average fixed costs fall as the level of activity rises; A) is true. Q20: Variable costs are expenses that A) remain constant on a per-unit basis but change in total based on activity level. Q21: Indirect labor incurred in a job order cost system is debited to C) manufacturing overhead. These answers reflect standard cost accounting theory (Garrison et al., 2014; Drury, 2013).

Summary of key concepts

Across these questions, the core ideas include: applying overhead using predetermined rates, distinguishing actual overhead from applied overhead, computing standard overhead rates from estimated costs and hours, performing equivalent-unit calculations under weighted-average process costing, and understanding the flow of costs through raw materials, work in process, finished goods, and cost of goods sold. The calculations illustrate how managerial accounting translates into journal entries and cost allocations that drive production decision-making (Horngren et al., 2013; Blocher et al., 2019).

Conclusion

The problems presented require a mix of journal-entry preparation, predetermined overhead rate computations, overhead variance analysis, and process-costing concepts. By applying the standard frameworks, we can systematically determine the proper accounting treatment for each scenario and demonstrate the link between theory and practice in cost management (Kaplan & Cooper, 1998; Merchant & Van der Stede, 2012).

References

• Horngren, C. T., Sundem, G. L., Stratton, W. O., Burgstahler, D., & Schatzberg, J. (2013). Introduction to Management Accounting. Pearson.
• Horngren, C. T., Datar, S. M., & Rajan, M. (2015). Cost Accounting: A Managerial Emphasis. Pearson.
• Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2014). Managerial Accounting. McGraw-Hill.
• Drury, C. (2013). Management and Cost Accounting. Cengage.
• Hilton, R. W., Maher, M. W., & Selto, F. (2009). Cost Management: Strategies for Business Decisions. McGraw-Hill.
• Blocher, E. J., Stout, D. E., Chen, K. H., & Cokins, G. (2019). Cost Management: A Strategic Emphasis. McGraw-Hill Education.
• Kaplan, R. S., & Cooper, R. (1998). Cost & Effect: Using Integrated Cost Systems to Drive Profit. Harvard Business School Press.
• Kaplan, R. S., & Anderson, S. (2007). Time-Driven Activity-Based Costing. Harvard Business Review Press.
• Langfield-Smith, K., Thorne, W., & Hilton, R. (2013). Management Accounting: Information for Creating and Managing Value. Pearson.
• Merchant, K. A., & Van der Stede, W. A. (2012). Management Control Systems: Performance Measurement, Evaluation and Incentives. Pearson.