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Advanced Accounting and Reporting 1713 Job Order Costing

This document contains two problems related to job order costing and allocation of service department costs. Problem 1 provides costs for Job Order 201 and asks to calculate the cost per unit based on whether rework costs were attributable to the job order or internal failure. Problem 2 provides budgeted overhead costs and hours for various production and service departments, and asks to calculate costs allocated to departments under different allocation methods.

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Don Cabasi
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128 views2 pages

Advanced Accounting and Reporting 1713 Job Order Costing

This document contains two problems related to job order costing and allocation of service department costs. Problem 1 provides costs for Job Order 201 and asks to calculate the cost per unit based on whether rework costs were attributable to the job order or internal failure. Problem 2 provides budgeted overhead costs and hours for various production and service departments, and asks to calculate costs allocated to departments under different allocation methods.

Uploaded by

Don Cabasi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1713

SAINT FERDINAND COLLEGE


ILAGAN ISABELA

ADVANCED FINANCIAL ACCOUNTING AND REPORTING JOB ORDER COSTING

PROBLEM 1: For the year ended December 3, 2016, UA Inc. incurred the following costs on Job Order 201 for
manufacturing of 500 units:

Original cost accumulation:


Direct materials 500,000
Direct labor 400,000
Factory overhead 100,000

Direct costs of reworking 100 units:


Direct materials 100,000
Direct labor 200,000

1. What is the cost per unit of Job Order 201 if the rework costs were attributable to the exacting specification of
Job Order 201?
A. 2,600
B. 2,500
C. 2,700
D. 2,200

2. What is the cost per unit of Job Order 201 if the rework costs were attributable to internal failure?
A. 2,500
B. 2,400
C. 2,000
D. 2,300

PROBLEM 2: Adidas Inc. is exploring ways to allocate the cost of service department such as Quality Control and
Maintenance to the production departments such as Machining and Assembly. The controller of the company has
provided the following information:

Quality Control Maintenance Machining Assembly Total


Budgeted
overhead costs P 350,000 P 200,000 P 400,000 P 300,000 P 1,250,000
before allocation
Budgeted
machine hours - - 50,000 hrs. - 50,00 hrs.
Budgeted direct
labor hours - - - 25,000 hrs. 25,000 hrs.
Budgeted hours
of service of - 7,000 hrs. 21,000 hrs. 7,000 hrs. 35,00 hrs.
quality control
Budgeted hours
of service of 10,000 hrs. - 18,000 hrs. 12,000 hrs. 40,000 hrs.
maintenance

1. Under direct method of allocating service department costs, what are the total service costs allocated to the
machining and assembly department, respectively?
A. 382,500 and 167,500
B. 300,000 and 130,000
C. 412,500 and 137,500
D. 330,000 and 220,000

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2. Under the step-down method of allocating service department costs from quality control to maintenance,
what are the total service costs allocated to the machining and assembly departments, respectively?
A. 372,000 and 178,000
B. 412,500 and 137,500
C. 330,00 and 220,000
D. 405,00 and 145,000

3. Under the reciprocal methods of allocating service department costs, what are the total amount of quality
control costs and total amount of maintenance costs, respectively, to be allocated to the other
departments?
A. 421,053 and 284,211
B. 453,201 and 290,640
C. 410,250 and 282,050
D. 435,800 and 287,160

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