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Job Order Costing System Exercises and Search the site

Problems
Ma agement Accounting
n ak even point formula
Bdgeting and Planning
r iness and Quality Improvement
grams
e
Products and Joint Products Costing
B
ital Budgeting Decisions
u
h Flow Statement
B
u ntribution margin ratio
Controlling and Costing Materials
Cost Accounting Formulas
Exercise 1– Cost accumulation
Cost Terms, Concepts and Classification
Procedure Determination
Current ratio
Exercise 2– Job order cost sheet
Financial statement Analysis
Exercise 3– Job order costing-T
Accounts and Journal Entries Financial statement analysis

Exercise 4– Job Order Cycle Gross Profit Ratio

Entries Introduction to Managerial Accounting
Exercise 5– Journal entries, T Job Order Costing system
Accounts, Over and Under
Linear Programming
applied overhead Income
Managerial Accounting Terms
Statement
Pricing Products and Services

EXERCISE 1–COST ACCUMULATION Process Costing System

Process Costing System
PROCEDURE DETERMINATION:
Segment Reporting and Transfer Pricing
Classify these industries with respect to the type of cost accumulation procedure generally Service Department Costing
used–job order costing or process costing. Standard Costing and Variance

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7/22/2019 Job Order Costing Exercises-Solved Problems-Home Work Solution
Variable Costing System
a. Meat k. Pianos

b. Sugar l. Linoleum

c. Steel m. Leather
Categories
d. Breakfast cereal n. Nylon
Accommodation Bills of Exchange
e. Paper boxes o. Baby foods
Accounting

f. Wooden furniture p. Locomotives Accounting Calculators

Accounting Conventions
g. Toys and novelties q. Office machines equipment
Accounting cycle
h. Coke r. Luggage Accounting Debt
Accounting Definitions
i. Cooking utensils s. Paint
Accounting Equation
j. Caskets t. Tires and tubes
Accounting For Consignment
Accounting for Depreciation

SOLUTION: Accounting For Joint Ventures

Accounting for Non-Trading Concerns
Job order cost procedure: (e), (f), (g), (i), (j), (k), (p), (q), (r) Accounting Formula's
Process costing procedure: (a), (b), (c), (d), (h), (l), (m), (n), (o), (s), (t)
Accounting Information system
Accounting Journal Entries
EXERCISE 2–JOB ORDER COST SHEET: Accounting Principle
Forge Machine Works collects its cost data by the job order cost accumulation procedure. Accounting Procedures
For Job 642, the following data are available: Accounting Ratio's
Accounting Softwares

1. BEST ACCOUNTING CAREERS Accounting Statments

Accounts From Incomplete Records
2. ELECTRICIAN JOB VACANCIES Activity Base Defination
Activity Based Costing System
3. POST OFFICE JOB OPENINGS
Addition of materials and beginning
inventory
4. FACTORY JOBS HIRING a
Addition of materials and inventory
5. LOGISTICS JOB SEARCH Adjustment Codes
Advertisement
Authors
Direct MaterialsDirect Labor
Average costing Method
Balance sheet
Bank Accounting
Bank Reconciliation Statement
Bench Marking
Bill
Bills of Exchange
blog
Bonds
Book-keeping

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7/22/2019 Job Order Costing Exercises-Solved Problems-Home Work Solution
Bookkeeping
Branches of Accounting
Budget
budgeting
Budgeting and Planning

Download PDF - [Free] Business and Quality Improvement

To View PDF, Download Here Programs
ProPDFConverter
capital
Capital Budgeting Decisions
Cash Book
Cash Flow Statement

9/14 Issued $ 1,200Week of Sep. 20 180 hrs @ $6.20/hr Consignment Accounts

Controlling and Costing Materials
9/20 Issued 662 Week of Sep. 26 140 hrs @ $7.30/hr
Cost Accounting
9/22 Issued 480 Cost terms concepts and classifications
Costing
Factory overhead applied at the rate of $3.50 per direct labor hour.Required:
Debit and Credit
The appropriate information on a job cost sheet.
The sales price of the job, assuming that it was contracted with a markup of 40% of cost. Debt Service
Decentralization
Decision Making
Decision Making Tool for Management
Depreciation
SOLUTION: E-Business
Earnings Per Share
1.
Economic Order Quantity

Forge Machine Works

Entry system
Equity Ratio
Job Order Cost Sheet–Job 642

Expenditures
Final Accounts
Direct materials Direct labor Applied factory overhead

Financial Accounting

Date Amount Date Hours Rate Cost Date Hours Rate Financial Statement Analysis
Issued (Week (Week Funds Transfer Pricing
of) of) Gearing Ratio
Gross Profit Analysis
9/14 $1,200 9/20 180 $6.20 $1,116 9/20 180 $3.50
Horizontal Analysis
9/20 662 9/26 140 7.30 1,022 9/26 140 3.50
Income Taxes

9/22 480
Insurance Policy
Introduction to managerial accounting
——– ———-
Inventory

$2,342 $2,138
Job Order Costing System

===== ====== Joint Products and Cost

Joint Venture Accounts
2. Journal
Knowledge Management
Sales Price of job 642, contracted with a markup of 40% of cost:

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7/22/2019 Job Order Costing Exercises-Solved Problems-Home Work Solution
Ledger
Direct materials $2,342
Linear Programming Technique
Direct labor 2,138
Managerial Accounting

Applied factory overhead 1,120 Managment Accounting

Marginal Costing System
Mergers and Acquisitions
Total factory cost $5,600 Method of Depreciation

Markup 40% of cost 2,240 Net Present value

Payments
——-
Pricing products and services
$7,840 Pricing Strategies
=====
Privacy Policy
Process Costing System

EXERCISE 3–JOB ORDER COSTING: Profit

Profit and Loss Account
The Cambridge Company uses job order costing. At the beginning of the May, two jobs
quality cost
were in process:
quality Management
Quantitative Method
Job Job372
revenue
369
Sales
Materials $ 2,000 $ 700 Segment Reporting

Direct labor 1,000 300 Single Entry System

Standard Costing and Variance Analysis
Applied factory overhead 1,500 450
Stock Accounting
Stocks

There was no inventory of finished goods on May1. During the month, Jobs 373, 374, 375, 376, 378, andSubdivision
379 wereof started.Materials
Journal requisitions for May totale
$13,000, direct labor cost, $10,000, and actual factory overhead, $16,000. Factory overhead is applied at a rate of 150% of direct labor cost. The only job still
$2,000. Subdivisions of Journal
Terms of Use
Required:
Total Quality Management System
T accounts for work in process, finished goods, cost of goods sold, factory overhead control, and applied factory
Trading overhead.
Account
General journal entries to record:
Cost of goods manufactured Trial Balance
Cost of goods sold
Closing of over or underapplied factory overhead to cost of goods sold. Uncategorized
Variable Costing System
Varience Analaysis
Volume Profit CVP Relationship

Financial Accounting
Accounting for Depreciation
Accounting for Joint Ventures
SOLUTION: Accounting For Non-Trading Concerns
Accounting Principles and Accounting
T Accounts
Equation
Bookkeeping and Bookkeeping Terms

Work in Process Finished Goods Capital and Revenue Items

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Consignment Accounts
May1 Balance Finished From Cost of goods sod Final Accounts
No. 369 goods Work in Process 38,300 Journal
4,500 40,300 40,300May31
Balance: No.376 2,000
Single Entry System
No. 372
Subdivision of Journal
1,450Materials 13,000Direct labor 10,000Factory O/H 15,000 43,950May31
Balance:
What’s new !
No. 379

Also see formula of gross margin ratio

3,650*
method with financial analysis, balance sheet
and income statement analysis tutorials for
Cost of Goods sold free download on
Accounting4Management.com. Accounting
students can take help from Video lectures,
handouts, helping materials, assignments
From finished goods 38,300Underapplied Overhead solution, On-line Quizzes, GDB, Past Papers,
1,000
books and Solved problems. Also learn latest
39,300 Accounting & management software
technology with tips and tricks.
Factory Overhead Control

*$1,400 + $900 + ($900 × 150%)

16,000 15,000

1,000 Applied Factory Overhead

16,000

15,000 15,000

General journal entries to record:

Cost of goods manufactured: Dr Cr

Finished goods 40,300

Work in process 40,300

Cost of goods sold:

Cost of goods sold 38,300

Finished goods 38,300

Closing of underapplied factory overhead to cost of goods

sold:

Cost of goods sold 1,000

Factory overhead control 1,000

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7/22/2019 Job Order Costing Exercises-Solved Problems-Home Work Solution

EXERCISE 4–JOB ORDER CYCLE ENTRIES:

Beaver, inc. provided the following data for January, 19B:

Materials and supplies:

Inventory, January 1, 19B $10,000

Purchases on account 30,000

Labor:

Accrued, January 1, 19B 3,000

Paid during January (ignore payroll taxes) 25,000

Factory overhead costs:

Supplies (issued from materials) 1,500

Indirect labor 3,500

Depreciation 1,000

Other factory overhead costs (all from outside suppliers on account) 14,500

Work in process:

Job1 Job2 Job3 Total

Work in process January $ — — $ 1,000

1, 19B 1,000

Job costs during January,

19B:

Direct materials 4,000 $6,000 $5,000 15,000

Direct labor 5,000 8,000 7,000 20,000

Applied factory overhead 5,000 8,000 7,000 20,000

Job 1 started in December, 19A, finished during January, and sold to a customer for
$21,000 cash

Job 2 started in January, not yet finished.

Required:
Job 3 started in January, finished during January, and now in the finished goods inventory awaiting customer’s disposition
Journal entries, with detail for the respective job orders and factory overhead subsidiary
Finished goods
records, to inventory
to record January transactions
the following 1, 19B. for the January:

1. Purchase of materials on account.

2. Labor paid.

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3. Labor cost distribution.

4. Materials issued.
5. Depreciation for the month.
6. Acquisition of other overhead costs on credit.
7. Overhead applied to production.
8. Jobs completed and transferred to finished goods.
9. Sales revenue.
10. Cost of goods sold.

SOLUTION:
Journal Entries:

Subsidiary Debit Credit

Record

1 Materials 30,000

Accounts payable 30,000

2 Accrued payroll 25,000

Cash 25,000

3. Factory overhead control 3,500

Indirect labor 3,500

Work in process (WIP) 20,000

Job1 5,000

Job2 8,000

Job3 7,000

Payroll 23,500

4. Work in process 15,000

Job1 4,000

Job2 6,000

Job3 5,000

Factory overhead control 1,500

Supplies 1,500

Materials 16,500

5 Factory overhead control 1,000

Depreciation 1,000

Accumulated Depreciation 1,000

6 Factory overhead control 14,500

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Other factory overhead costs 14,500

Accounts payable 14,500

7 Work in process 20,000

Job1 5,000

Job2 8,000

Job3 7,000

Factory overhead control (or 20,000

applied FOH)

8 Finished goods 34,000

Work in process (WIP) 34,000

Job1 15,000

Job3 19,000

9 Cash 21,000

Sales 21,000

10 Cost of goods sold 15,000

Finished goods 15,000

EXERCISE 5 JOB ORDER COSTING–JOURNAL

ENTRIES, T ACCOUNTS, INCOME STATEMENT
Hogle Company is a manufacturing firm that uses job order costing system. On January 1,
the beginning of its fiscal year, the company’s inventory balances were as follows:

Raw materials $20,000

Work in process $15,000
Finished Goods $30,000

The company applies overhead cost to jobs on the basis of machine-hours worked. For
the current year, the company estimated that it would work 75,000 machine-hours and
incur $450,000 in manufacturing overhead cost. The following transactions were recorded
for the year

1. Raw materials were purchased on account, $410,000.

2. Raw materials were requisitioned for use in production, $380,000 ($360,000 direct
materials and $20,000 indirect materials).
3. The following costs were incurred for employee services: direct labor, $75,000;
indirect labor, $110,000; sales commission, $90,000; and administrative salaries,
$20,000.
4. Sales travel costs were $17,000.

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5. Utility costs in the factory were $43,000.

6. Advertising costs were $180,000.
7. Depreciation was recorded for the year, 350,000 (80% relates to factory operations,
and 20% relates to selling and administrative activities).
8. Insurance expired during the year, $10,000 (70% relates to factory operations, and
30% relates to selling and administrative activities).
9. Manufacturing overhead was applied to production. Due to greater than expected
demand for its products, the company worked 80,000 machine-hours during the year.
10. Goods costing $9,00,000 to manufacture according to their job cost sheets were
completed during the year.
11. Goods were sold on account to customers during the year at a total selling price of
$1,500,000. The goods cost $870,000 to manufacture according to their job cost
sheets.

Required:

1. Prepare journal entries to record the preceding transactions.

2. Post the entries in (1) above to T-accounts (don’t forget to enter the beginning
balances in the inventory accounts).
3. Is manufacturing overhead underapplied or overapplied for the year? Prepare journal
entry to close any balance in the manufacturing overhead account to cost of goods
sold (COGS). Do not allocate the balance between ending inventories and cost of
goods sold (COGS).
4. Prepare an income statement for the year.

SOLUTION:
1: Journal Entries

1 Raw materials 410,000

Accounts payable 410,000

2 Work in process 360,000

Manufacturing overhead 20,000

Raw materials 380,000

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3 Work in process 75,000

Manufacturing overhead 110,000

Sales commission expense 90,000

Administrative salaries expense 200,000

Salaries and wages payable 475,000

4 Sales travel expense 17,000

Accounts payable 17,000

5 Manufacturing overhead 43,000

Accounts payable 43,000

6 Advertising expense 180,000

Accounts payable 180,000

7 Manufacturing overhead 280,000

Depreciation expense 70,000

Accumulated depreciation 350,000

8 Manufacturing overhead 7,000

Insurance expense 3,000

Prepaid insurance 10,000

9* Work in process 480,000

Manufacturing overhead 480,000

10 Finished Goods 900,000

Work in process 900,000

11 Accounts Receivable 1,500,000

Sales 1,500,000

Cost of goods sold 870,000

Finished goods 870,000

*The predetermined overhead rate for the year would be computed as follows:

Predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated

total units in the allocation base

= $450,000 / 75,000 machine-hours

= $6 per machine-hour

Based on the 80,000 machine-hours actually worked during the year, the company would
have applied $480,000 in overhead cost to production: 80,000 machine-hours × $6 per

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machine-hour = $480,000.

2: T Accounts

Raw Materials Work in Process

Accounts Receivable

Bal. (2) Bal. (10)

20,000 380,000 20,000 900,000

11
(1) (2)

1,500,000
410,000 360,000

Finished Goods
Bal. (3)

50,000 75,000

Bal. (11)
(9)
30,000 870,000
480,000
10 Bal.

900,000 30,000

Prepaid Insurance

Accumulated Depreciation

(8)
Accounts Payable
(7)
10,000

350,000

Salaries and Wages Payable

(1)

410,000

Manufacturing
(4) (3)
Overhead
17,000 475,000

(5)
(2) (9)

43,000
20,000 480,000

(6) (3)
Cost of goods sold
180,000 110,000

Sales (5)

43,000
(11)
(7)
870,000
(11) 280,000

1,500,000 (8)
Administrative Salary Expense
7,000

Sales Commissions Expenses 460,000 480,000

(3)
Bal.

200,000
(3) 20,000

90,000

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Depreciation Expenses

Insurance Expense

Advertising expense
(7)
(8)
70,000
3,000

(6)

180,000

Sales Travel Expense

(4)

17,000

3: Under or Overapplied manufacturing overhead:

Manufacturing overhead is overapplied for the year. The entry to close it out to cost of
goods sold is as follows:

Manufacturing overhead 20,000

Cost of goods 20,000

sold

4: Income Statement

HOGLE COMPANY
Income Statement
For the Year Ended December 31

Sales $1,500,000

Less cost of goods sold ($870,000 – $20,000 850,000

overapplied O/H

————–

Gross margin 650,000

Less selling and administrative expenses:

Commission expense $90,000

Administrative salaries expense 200,000

Sales travel expense 17,000

Advertising expense 180,000

Depreciation expense 70,000

Insurance expense 3,000 560,000

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————————-

Net operating income $90,000

======

YOU MAY ALSO BE INTERESTED IN OTHER

USEFUL ARTICLES FROM “JOB ORDER COSTING
SYSTEM” CHAPTER:

1. Measuring Direct Materials Cost in Job Order Costing System

2. Measuring Direct Labor Cost in Job Order Costing System
3. Application of Manufacturing Overhead
4. Job Order Costing System – The Flow of Costs
5. Multiple Predetermined Overhead Rates
6. Under-applied overhead and over-applied overhead calculation
7. Disposition of any balance remaining in the manufacturing overhead
account at the end of a period
8. Predetermined Overhead Rate and Capacity
9. Recording Non-manufacturing Costs
10. Recording Cost of Goods Manufactured and Sold
11. Job Order Costing in Services Companies
12. Use of Information Technology in Job Order Costing
13. Advantages and Disadvantages of Job Order Costing System
14. Job Order Costing Discussion Questions and Answers
15. Job Order Costing Exercises
16. Case Studies

OTHER RELATED ACCOUNTING ARTICLES:

Recording Cost of Goods Manufactured and Sold in Job Order Costing

Job Order Costing Questions and Answers
Disposition of Underapplied or Overapplied Overhead Balances
Job Order Costing – The Flow of Cost
Recording Non-manufacturing Costs in a Job Order Costing System
Over-applied and Underapplied Overhead
Application of Manufacturing Overhead Cost in Job Order Costing
Job Order Costing System
Job Order Costing in Service Companies
Measuring Direct Materials Cost in Job Order Costing System

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Sana Ahmed Job Order Costing System 1 Comment

Home » Job Order Costing System » Job Order Costing System Exercises and
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7/22/2019 Job Order Costing Exercises-Solved Problems-Home Work Solution

Latest Comments

Sibylle Preuschat

Leave a Reply
August 7, 2014

Hello, thanks so much for providing these exercises. I enjoyed completing them.
For your information, Exercise 5 contains a couple of errors.
Journal Entry #3 cites administrative salaries at $20,000.00, but in the Solutions
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section, administrative salaries are posted in the journal at $200,000.00.

The T account for Work in Process in the Solutions carries an opening balance of
Comment
$20,000.00, but the balance given in the actual question is $15,000. You give the final
balance for the Work in Process T account as $30,000.00. That sum could only be
arrived at with a $15,000.00 balance.

These are small issues in an otherwise great series of exercises, and I hope you find my
comment helpful.

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