A job-order costing system is likely to be used by a (Points : 2) 1. soft-drink

Question

A job-order costing system is likely to be used by a (Points : 2)
1. soft-drink bottler.
2. breakfast cereal manufacturer.
3. paint manufacturer.
4. caterer.


EXERCISE 2-4. Product Costing Systems [LO 4] For the list of product manufacturers below,
indicate whether a job-cost system (J) or a process cost system (P) would be most appropriate.
______ a. Chemicals processor
______ b. Paint manufacturer
______ c. Law firm
______ d. Producer of molds used by other manufacturing firms to shape their products
______ e. Dog food producer
______ f. Custom home builder



PROBLEM 2-10. Accounting for a Job-Order Cost System [LO 3, 6, 7, 9] Bob and Beth Ford
retired from the food services industry and began catering wedding receptions on a limited
basis. The major costs in setting up their business included: linens, $1,200; two complete silver
services, $1,000; glass plates and cups, $1,400; and cake-decorating tools and accessories,
$600. It is expected that all of these items will last 10 years with no salvage value. Bob and
Beth do all their food preparation in their apartment and have found that, in an average
month, their utility bill is $100 higher than when they did not cater. All baking and cooking
supplies are treated as “direct materials,” and the only other cost incurred is liability insurance
at $1,400 per year. All direct materials are purchased at a local grocery for cash, and Bob and
Beth pay themselves an hourly wage of $30 per hour.During the month of June, Bob and Beth
catered five weddings.
Redfern wedding $ 400 25
Material Labor hours

Redfern Wedding 400 25
Miller wedding 800 40
Walker wedding 500 20
DeSilva wedding 1700 90
Estes wedding 600 30
The overhead allocation base is labor hours with an estimated 1,000 hours per year, and billings are
at 120 percent of job cost.Overhead allocations and markups are rounded to the nearest dollar.
Required
a. Prepare job cost sheets for each of the five catering jobs.
b. Calculate income for the month of June.

Explanation / Answer

A job-order costing system is likely to be used by a (Points : 2)
1. soft-drink bottler.
2. breakfast cereal manufacturer.
3. paint manufacturer.
4. caterer.


EXERCISE 2-4. Product Costing Systems [LO 4] For the list of product manufacturers below,
indicate whether a job-cost system (J) or a process cost system (P) would be most appropriate.
process cost system a. Chemicals processor
process cost system b. Paint manufacturer
process cost system (P c. Law firm
job-cost system (J)d. Producer of molds used by other manufacturing firms to shape their products
job-cost system (J)e. Dog food producer
process cost system (P) f. Custom home builder

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