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Job Order Assignment PDF

The document provides information about the job order costing system used by the Jeep Company. It includes materials, labor, and job costs for 4 jobs in September. It also provides overhead application rates and information about completed jobs. It asks 10 multiple choice questions related to calculating costs, inventory amounts, and overhead application for 3 different companies - The Gym Company, Parcor Company, and Seed Corporation - that use job order costing.

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Anne Marie
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534 views

Job Order Assignment PDF

The document provides information about the job order costing system used by the Jeep Company. It includes materials, labor, and job costs for 4 jobs in September. It also provides overhead application rates and information about completed jobs. It asks 10 multiple choice questions related to calculating costs, inventory amounts, and overhead application for 3 different companies - The Gym Company, Parcor Company, and Seed Corporation - that use job order costing.

Uploaded by

Anne Marie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Assignment: AC9

Job Order Costing

The Jeep Company uses a job-order cost system. The following information was recorded for September

Added during September


Job Number Inventory Materials Labor
1 1,000.00 300.00 200.00
2 1,400.00 250.00 300.00
3 500.00 1,500.00 150.00
4 750.00 4,000.00 400.00

The direct labor wage rate is P10 per hour. Overhead is applied at the rate of P5 per direct labor-hour. Jobs 1, 2, and
3 have been completed and transferred to finished goods. Job 2 has been delivered to the customer.

1. The ending Work in Process inventory is:


a. P7,575
b. P5,350
c. P4,325
d. P5,150

2. The Cost of Goods Manufactured for September is


a. P10,750
b. P11,275
c. P5,925
d. P7,625

3. The Cost of Goods Sold for September (before disposition of any under- or overapplied overhead) is:
a. P2,100
b. P5,925
c. P3,700
d. P1,950

The Gym Company's records for May contained the following information:

Actual direct labor-hours ....... 9,000 hours


Actual direct labor cost ........ P 47,000
Direct material purchased ....... 16,000
Direct material used ............ 14,000
Cost of goods sold .............. 100,000
Overapplied overhead ............ 5,000
Ending inventories:
Raw materials ................. 30,000
Work in process ............... 50,000
Finished goods ................ 70,000

The company uses a predetermined overhead rate of P5.00 per direct labor hour to apply manufacturing overhead to
jobs.

4. The actual overhead cost incurred during the month was:


a. 50,000
b. 55,000
c. 40,000
d. 45,000

5. The total cost added to Work in Process during May was:


a. 101,000
b. 106,000
c. 61,000
d. 111,000

Parcor Company uses a job order cost system and applies manufacturing overhead to jobs using a predetermined
overhead rate based on direct labor-hours. Last year manufacturing overhead and direct labor-hours were estimated
at P50,000 and 20,000 hours, respectively, for the year. In June, Job #461 was completed. Materials costs on the job
totaled P4,000 and labor costs totaled P1,500 at P5 per hour. At the end of the year, it was determined that the
company worked 24,000 direct labor hours for the year and incurred P54,000 in actual manufacturing overhead
costs.

Required:

6. Job #461 contained 100 units. Determine the unit cost that would appear on the job cost sheet

7. Determine the under- or overapplied overhead for the year

Seed Corporation, which began operations on January 1 of the current year, reported the following
information:

Estimated manufacturing overhead 600,000


Actual manufacturing overhead 639,000
Estimated direct labor cost 480,000
Actual direct labor cost 500,000
Total debits in the Work-In-Process account 1,880,000
Total credits in the Work-In-Process account 920,000

Saturns uses a normal cost system and applies manufacturing overhead to jobs on the basis of direct labor
cost. A 60% markup is added to the cost of completed production when finished goods are sold. On
December 31, job no. 18 was the only job that remained in production. That job had direct-material and
direct-labor charges of 16,500 and 36,000, respectively

Required:

1. Determine the company's predetermined overhead rate.


2. Determine the amount of under- or overapplied overhead. Be sure to label your answer
3. Compute the amount of direct materials used in production.
4. Calculate the balance the company would report as ending workin-process inventory
5. Prepare the journal entry(ies) needed to record Buckman's sales, which are all made on account

Air Star, Inc., which uses a job-costing system, began business on January 1, 2019 and applies
manufacturing overhead on the basis of direct-labor cost. The following information relates to 2019:

 Budgeted direct labor and manufacturing overhead were anticipated to be 200,000 and
250,000, respectively
 Job nos. 1, 2, and 3 were begun during the year and had the following charges for direct
material and direct labor:

Job # Direct Materials Direct Labor


1 145,000.00 35,000.00
2 320,000.00 65,000.00
3 55,000.00 80,000.00

 Job nos. 1 and 2 were completed and sold on account to customers at a profit of 60% of cost.
Job no. 3 remained in production
 Actual manufacturing overhead by year-end totaled 233,000. Rock Star adjusts all under- and
overapplied overhead to cost of goods sold.

6. Compute the company's predetermined overhead application rate.


7. Compute Rock Star's ending work-in-process inventory
8. Determine Rock Star's sales revenue
9. Was manufacturing overhead under- or overapplied during 2019? By how much
10. Present the necessary journal entry to handle under- or overapplied manufacturing overhead at
year-end

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