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Which of the following statements concerning job cost sheets are correct?
A job cost sheet shows the direct materials used on that specific job
A job cost sheet shows the selling costs associated with a particular job
The amount of factory overhead on a job cost sheet is charged at a pre-determined rate
A.1 and 2 only
B.1 and 3 only
C.2 and 3 only
D.1, 2 and 3The correct answer is B.
Selling costs do not appear on a job cost sheet, only manufacturing costs.
Generally, when we write a cost card, we include both production and non production overheads to arrive at total cost of the job. Why it’s stated that selling cost are included in Job cost sheet which I’m assuming is another term for cost card in the context of job costing.
Qesution 2:
JM uses a job order cost system. Overhead is charged at $20 per direct labour hour. Job number 666 includes $2,000 of direct labour cost and 150 direct labour hours. $1,500 of indirect labour cost was also incurred.
9. Which journal entry correctly records the wage-related cost?
A Dr Work in progress $3,500
?Cr Wages payable $3,500B Dr Wage expense $3,500
?Cr Wages payable $3,500C Dr Work in progress $2,000
Dr Factory overhead $1,500
?Cr Wages payable $3,500D Dr Work in progress $3,500
?Cr Factory overhead $1,500
?Cr Wage expense $2,000he correct answer is C.
The correct journal entry reflects $2,000 Dr to work in progress for direct labour costs and $1,500 Dr to factory overhead for the indirect labor costs incurred.
As per accruals concept, cost are supposed to be recorded immediately when theyre incurred. Why have they not recorded the wage exp and payable first then transfer them to WIP and overhead account.
First question:
Job cost sheets are used in the factory to list all of the costs of production as they are incurred. So they will not include selling costs.
(The cost cards will use information from the sheets and then will add on any other costs)
Second question:
The accruals concept is for financial accounting, not for management accounting (and is one of several reasons for differences as I explain in my free lectures).
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