SAMPLE PROBLEMS:
JOB ORDER COSTING
PROBLEM 1
STRAWHAT LUFFY Company uses a predetermined overhead rate based on machine-hours
to apply manufacturing overhead to jobs. The company manufactures tools to customer
specifications. The following data pertain to Job 1501:
Direct materials used...................................................... ₱4,200
Direct labor-hours worked............................................... 300
Direct labor rate per hour................................................ ₱8.00
Machine-hours used....................................................... 200
Predetermined overhead rate per machine-hour............ ₱15.00
What is the total manufacturing cost recorded on Job 1501?
SOLUTION:
Direct materials used (actual) ……………………..….4,200
Direct labor used (300 hrs x 8/hr ) ……………………2,400
Manufacturing overhead Applied (200 hrs x 15/hr)….3,000
Total manufacturing cost …………………………….9,600
PROBLEM 2
Job 910 was recently completed. The following data have been recorded its job cost sheet:
Direct materials............................. ₱3,193
Direct labor-hours.......................... 21 labor-hours
Direct labor wage rate................... ₱12 per labor-hour
Machine-hours.............................. 166 machine-hours
The company applies manufacturing overhead on the basis of machine-hours. The
predetermined overhead rate is ₱15 per machine-hour. The total cost that would be recorded on
the job cost sheet for Job 910 would be:
SOLUTION:
Direct materials used (actual) ……………………..….3,193
Direct labor used (21 hrs x 12/hr ) ………………………252
Manufacturing overhead Applied (166 hrs x 15/hr)….2,490
Total manufacturing cost …………………………….5,935
PROBLEM 3
The following data have been recorded for recently completed Job 450 on its job cost sheet.
Direct materials cost was ₱3,044. A total of 46 direct labor-hours and 104 machine-hours were
worked on the job. The direct labor wage rate is ₱15 per labor-hour. The company applies
manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is
₱13 per machine-hour. The total cost for the job on its job cost sheet would be:
SOLUTION :
Direct materials used (actual) ……………………..….3,044
Direct labor used (46 hrs x 15/hr ) ………………………690
Manufacturing overhead Applied (104 hrs x 13/hr)….1,352
Total manufacturing cost …………………………….5,086
PROBLEM 4
PIRATE HUNTER ZORO Co. uses a predetermined overhead rate based on direct labor-hours
to apply manufacturing overhead to jobs. For the month of October, PIRATE HUNTER ZORO's
estimated manufacturing overhead cost was ₱300,000 based on an estimated activity level of
100,000 direct labor-hours. Actual overhead amounted to ₱325,000 with actual direct labor-
hours totaling 110,000 for the month. How much was the overapplied or underapplied
overhead?
SOLUTION:
Predetermined OH rate = 300,000/100,000 =3 per DLH
Actual OH …………………………………………….325,000
Applied OH (110,000 actula DLH x 3 per DLH)….. 330,000
Overapplied OH ………………………………………..5,000
PROBLEM 5
CYBORG FRANKY, Inc., uses a predetermined overhead rate based on machine-hours to
apply manufacturing overhead to jobs. The company estimated that it would incur ₱510,000 in
manufacturing overhead during the year and that it would work 100,000 machine-hours. The
company actually worked 105,000 machine-hours and incurred ₱540,000 in manufacturing
overhead costs. By how much was manufacturing overhead underapplied or overapplied for the
year?
SOLUTION:
Predetermined OH rate = 510,000/100,000 MH = 5.1 per MH
Actual OH …………………………………………….540,000
Applied OH (105,000 actuual MH x 5 per DLH)….. 535,500
Underapplied OH ……………………………….……..4,500
Cost of goods sold………………………4,500
Manufacturing OH………………………….4,500
