GNBExam03

GNBExam03 - GNB 12e Practice Exam Chapter 3 1 When is...

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GNB 12e Practice Exam – Chapter 3 1. When is job-order costing typically used by a company? How does it differ from process costing? What documents are typically used in a job-order system? A job-order costing system is used in situations where many different products are produced each period. A process costing system is used in situations where the company produces many units for a single product for long periods. When job-order costing is used, the costs for each job (or production order) are captured and the documents used to record each job’s costs typically include a bill of materials, production order, materials requisition form, job cost sheets, and time tickets (or other source of information on the direct and indirect labor related to the job). Manufacturing overhead is allocated to the job using predetermined overhead rates which are entered on the job cost sheet. 2. Stephens, Inc. had the following estimated costs for next year: Advertising expense $ 88,000 Direct materials 120,000 Direct labor 440,000 Indirect materials 40,000 Rent on factory equipment 128,000 Sales commissions 600,000 Salary of production supervisor 280,000 The company estimates that 80,000 direct labor hours will be worked and 64,000 machine hours will be incurred during the year. If overhead is applied on the basis of machine hours, what will be the overhead rate per hour?
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This note was uploaded on 07/15/2010 for the course ECON 137A taught by Professor Watson during the Fall '08 term at UCSB.

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GNBExam03 - GNB 12e Practice Exam Chapter 3 1 When is...

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