Question 1

The Terrapin Manufacturing Company has the following job cost sheets on file. They represent jobs that have been worked on during June of the current year. This table summarizes information provided on each sheet:
(a) What is the cost of the goods in process inventory on June 30?
(b) What is the cost of the finished goods inventory on June 30?
(c) What is the cost of goods sold for the month of June?

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Question 2

A company uses a job order cost accounting system and applies overhead on the basis of direct labor cost. A summary of the company's Goods in Process Inventory account for December appears below.
Fill in the blanks for the following:
(1) The total cost of the direct materials, direct labor, and factory overhead applied in the December 31 goods in process inventory is $_______________________.
(2) The company's overhead application rate is ____________________%
(3) Job No. 6 had $26,550 of direct labor cost. Therefore, the job must have had $__________ of direct materials cost.
(4) Job No. 8 had $73,998 of direct materials cost. Therefore, the job must have had $__________ of factory overhead cost.

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Question 3

Medlar Corp. maintains a Web-based general ledger. Overhead is applied on the basis of direct labor costs. Its bookkeeper accidentally deleted most of the entries that had been recorded for January. A printout of the general ledger (in T-account form) showed the following:
A review of the prior year's financial statements, the current year's budget, and January's source documents produced the following information:
(1) Accounts Payable is used for raw material purchases only. January purchases were $49,000.
(2) Factory overhead costs for January were $17,000 none of which is indirect materials.
(3) The January 1 balance for finished goods inventory was $10,000.
(4) There was a single job in process at January 31 with a cost of $2,000 for direct materials and $1,500 for direct labor.
(5) Total cost of goods manufactured for January was $90,000.
(6) All direct laborers earn the same rate ($13/hour). During January, 2,500 direct labor hours were worked.
(7) The predetermined overhead allocation rate is based on direct labor costs. Budgeted (expected) overhead for the year is $195,000 and budgeted (expected) direct labor is $390,000.
Fill in the missing amounts a through o above in the T-accounts above.

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Question 4

Prepare journal entries to record the following transactions and events for April using a job order cost accounting system.
(a) Purchased raw materials on credit, $69,000.
(b) Raw materials requisitioned: $26,000 direct and $5,400 indirect.
(c) Factory payroll totaled $46,000 (paid in cash), including $9,500 indirect labor.
(d) Paid other actual overhead costs totaling $14,500 cash.
(e) Applied overhead totaling $28,200.
(f) Finished and transferred jobs totaling $77,500.
(g) Jobs costing $58,800 were sold on credit for $103,000.

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Question 5

A company's ending inventory of finished goods has a cost of $35,000 and consists of 750 units. If the overhead applicable to these goods is $8,400, and overhead is applied at the rate of 60% of direct labor, what is the cost of the direct materials used to produce these units?

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Question 6

A company that uses a job order cost accounting system incurred $10,000 of factory payroll during May. Present the May 31 entry assuming $8,000 is direct labor and $2,000 is indirect labor.

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Question 7

Dina Corp. uses a job order cost accounting system. Four jobs were started during the current year. The following is a record of the costs incurred:
Actual overhead costs were $55,800. The predetermined overhead allocation rate is $2.40 per direct labor hour. During the year, Jobs 1010, 1012, and 1013 were completed. Also, Jobs 1010 and 1013 were sold for $387,000. Assuming that this is Dina's first year of operations:
(a) Make the necessary journal entries to charge the costs to the jobs started and to record the completion and sale of finished jobs.
(b) Calculate the balance in the Goods in Process Inventory, Finished Goods Inventory, and Factory Overhead accounts. Does the Factory Overhead account balance indicate an over- or under applied overhead?

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Question 8

The production of one unit of Product BBB used $17.50 of direct materials and $21.00 of direct labor. The unit sold for $56.00 and was assigned overhead at a rate of 30% of labor costs. What is the gross profit per unit on its sale?

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Question 9

Plumley Ad Agency contracted with a company to prepare an ad campaign. Plumley uses a job order costing system. Plumley estimates that the job will take 145 designer hours at $90 per hour and 85 staff hours at $45 per hour. Plumley uses two overhead rates in applying overhead to jobs: Designer-related at $100 per designer hour and staff-related at $50 per staff hour. Determine the total estimated cost for this job.

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Question 10

A company's predetermined overhead allocation rate is 130% based on direct labor cost. How much overhead would be allocated to Job No. 105 if it required total direct labor costs of $60,000?

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Question 11

Key Manufacturing Co. applies factory overhead to production on the basis of direct labor costs. Assume that at the beginning of the current year the company estimated that direct material costs would be $178,800, direct labor costs would be $154,000, and factory overhead costs would be $231,000.
(1) If the $28,000 cost of Key's goods in process inventory included $5,200 of direct labor cost, what amount of direct materials cost was included?
(2) If $8,100 of the company's $34,300 finished goods inventory was direct materials cost, determine the direct labor cost and factory overhead cost of the finished goods inventory.

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Question 12

Selwyn's Service applied overhead on the basis of direct labor costs during the current year. Overhead applied was $16,500. Actual overhead incurred was $17,200.
(a) Prepare a journal entry to remove this difference assuming that it is not material.
(b) Instead, assume actual overhead incurred was only $24,000. Describe (without computations) the alternative procedure that Selwyn might use to record this material difference.

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Question 13

Minchoy Corporation uses a job order cost accounting system. Five jobs were worked on during the current year. The predetermined overhead rate is 20% of direct labor costs. The following cost information is available (all materials and time ticket information applies to direct costs):
Part 1-Complete the job cost sheets for each job.
Part 2-Identify the amounts of each of the following accounts at the end of the period
a. Work in Process _____________________
b. Finished Goods _____________________
c. Cost of Goods Sold _____________________

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Question 14

The following data relates to the Density Company's first operating period. Calculate the total cost of goods sold for each product.

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Question 15

PRO, Inc. had the following activities during its most recent period of operations:
(a) Purchased raw materials on account for $140,000 (both direct and indirect materials are recorded in the Raw Materials Inventory account).
(b) Issued raw materials to production of $130,000 (80% direct and 20% indirect).
(c) Incurred and paid factory labor costs of $250,000 cash; allocated the factory labor costs to production (70% direct and 30% indirect).
(d) Incurred factory utilities costs of $20,000; this amount is still payable.
(e) Applied overhead at 80% of direct labor costs.
(f) Recorded factory depreciation, $22,000.

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Question 16

The following information is available for the Millennium Corporation for the current year:
Millennium Corporation uses a predetermined overhead rate of 150% of direct labor cost. Prepare journal entries for the following transactions and events:
(a) Purchase of raw materials on account.
(b) Assignment of materials costs to Goods in Process Inventory and Factory Overhead.
(c) Payment of Factory Payroll in cash.
(d) Assignment of Factory Payroll to Goods in Process Inventory and Factory Overhead.
(e) Recording of other factory overhead. Assume that all items other than depreciation are paid in cash.
(f) Assignment of Factory Overhead to Goods in Process Inventory.
(g) Transfer of goods completed to Finished Goods Inventory.
(h) Recording cost of goods sold.
(i) Assignment of over- or underapplied overhead to Cost of Goods Sold.

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Question 17

Time tickets for factory employees during the month of August are summarized as follows:
Make the necessary journal entries to record factory payroll.

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Question 18

BC Company uses a job order cost accounting system. During the month of April, the following events occurred:
(a) Purchased raw materials on credit, $32,000.
(b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials.
(c) Paid factory payroll for the month totaling $37,700 which includes $8,200 indirect labor.
(d) Assigned the factory payroll to jobs and overhead.
Make the necessary journal entries to record the above transactions and events.

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Question 19

The overhead allocation rate in Frantz Company's job order cost accounting system applies overhead based on direct labor costs. The company's manufacturing costs for the current year were: direct materials, $108,000; direct labor, $144,000; and factory overhead, $18,000. At year-end, the total cost of goods in process is $36,000, which includes $12,000 of direct labor cost. What amount of direct material cost is included in the ending goods in process inventory?

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Question 20

Erlander Company uses a job order cost accounting system. On November 1, $15,000 of direct materials and $3,500 of indirect materials were requisitioned for production. Prepare the general journal entry to record this requisition.

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Quiz 19: Job Order Cost Accounting