CHAPTER2: Job Order Costing

1 B
2 D
3 D
4 C
5 B
6 B
7 D
8 D
9 D
10 B
11 B
12 C
13 B
14 B
15 C
16 D
17 A
18 B
19 B
20 C
21 A
22 D
23 A
Solution: Direct materials issued to production 50000
Manufacturing overhead applied 80000
Direct labor costs 60000
Cost of jobs completed 190000

24 B
Solution: Predetermined overhead rate 7
Multiply by: Direct labor hours 900
Factory overhead applied 6300

25 D
Solution: Raw material, beginning 0
Raw material purchases (squeeze) 20000
Raw materials used (8000)
Indirect Materials used (1000)
Raw material, ending 11000

26 A
Solution: Factory overhead applied 6300
Factory overhead incurred 6000
 Overapplied 300

27 A
Solution: Department A Department B Total
Direct Materials 25000 5000 30000
Direct Labor 20000 30000 50000
Factory overhead 40000 15000 55000
Total 85000 50000 135000

28 B
Solution: Direct materials used 4200
Direct labor cost 2400
Applied factory overhead 3000
Manufacturing cost 9600

29 D
Solution: Factory overhead applied 36000
Factory overhead incurred 38000
Overapplied (Underapplied) (2000)

30 C
Solution: Finished goods Work in process
Direct Materials 80000 120000
Direct Labor 20000 30000
Factory overhead 10000 15000
Total 110000 165000

31 C
Solution: Ratio Allocation
Work in process 50000 0.05 2250
Finished goods 150000 0.15 6750
Cost of goods sold 800000 0.8 36000
Total 1000000 45000

32 D
Entry: Purchase of raw materials

Materials Control 1500

Accounts Payable 1500

33 B
Entry: Material usage
 Work in Process 1050
Factory Overhead 180
Materials Control 1230

34 C
Entry: Factory payroll

Factory Payroll 690

Salaries Payable 630
Withholding Accounts 60

35 D
Entry: Distribution of payroll

Work in Process 450

Factory Overhead 240
Factory Payroll 690

36 A
Entry: Applied factory overhead

Work in Process 900

Factory Overhead 900

37 A
Entry: Cost of goods manufactured

Finished Goods Inventory 2400

Work in process inventory 2400

38 C
Entry: Cost of goods sold

Cost of Goods Sold 2400

Finished Goods Inventory 2400

39 B
Entry: Sales

Accounts Receivable or Cash 3000

Sales 3000

40 B
Solution: Direct materials (squeeze) 5200
Direct Labor 2000
 Factory Overhead 1600
Work in process, ending 8800

41 B
Solution: Direct materials issued to producton 90000
Manufacturing overhead applied 113000
Direct labor costs 107000
Cost of jobs completed in January 2015 310000

42 B
Solution: Variable costs 33000
External designers' cost 7750
Minimum acceptable price 40750

Assumption: Fixed costs will remain unchanged and opportunity costs will not be
incurred on the grounds that the special job order is accepted.

43 A
Solution: Given:
Direct labor X
Applied overhead rate .6X

Formula: 220000 = 84000 + .6X + X

220000 = 84000 + 1.6X
1.6 X = 220000 - 84000
1.6 X = 136000
1.6 1.6
X= 85000

Applied Overhead 51000

44 B
Solution: Raw material, beginning 48000
Raw material purchases (squeeze) 60000
Raw material, ending (40000)
Raw materials used 68000
Direct labor 80000
Factory overhead 72000
Manufacturing cost 220000
Work in process, beginning 55000
Work in process, ending (62000)
 Cost of goods manufactured 213000
Finished goods inventory, beginning 81500
Finished goods inventory, ending (90200)
Cost of goods sold 204300

45 A.
Solution: Job #108 Job #109 Job #110
Direct Materials 35000 45000 30000
Direct Labor 20000 25000 35000
Applied FOH 16000 20000 28000
Total 71000 90000 93000

Beginning Balance 250000

Materials used 120000
Direct labor 100000
Applied OH 80000
Goods manufactured (296000)
Work in process, ending 254000

Job #108 71000

Job #109 90000
Job #110 93000
Work in process, ending 254000

46 B.
Solution: Job #108 Job #109 Job #110
Direct Materials 35000 45000 30000
Direct Labor 20000 25000 35000
Applied FOH 16000 20000 28000
Total 71000 90000 93000

Beginning Balance 250000

Materials used 120000
Direct labor 100000
Applied OH 80000
Goods manufactured (296000)
Work in process, ending 254000

Job #108 71000

 Job #109 90000
Job #110 93000
Work in process, ending 254000

47 D.
Solution: Job #108 Job #109 Job #110
Direct Materials 35000 45000 30000
Direct Labor 20000 25000 35000
Applied FOH 16000 20000 28000
Total 71000 90000 93000

Beginning Balance 250000

Materials used 120000
Direct labor 100000
Applied OH 80000
Goods manufactured (296000)
Work in process, ending 254000

Job #108 71000

Job #109 90000
Job #110 93000
Work in process, ending 254000
Total overhead budget 63000
Divide by: Direct Labor hours 9000
Predetermined overhead rate 7

Indirect labor 2000

Indirect materials 1000
Other indirect manufacturing costs 3000
Factory overhead incurred 6000

Machine hours used 200

Multiply by: predetermined rate 15
Factory overhead applied 3000

Actual direct labor hours worked 18000

Multiply by: predetermined rate 2
Factory overhead applied 36000

Unadjusted balance cost of goods sold 800000

Underapplied(overapplied) (36000)
Adjusted balance cost of goods sold 764000
April Description Amount
1 Balance 4000
 30 Direct materials 24000
30 Direct labor 16000
30 Factory overhead 12800
30 To finished goods (48000)
Work in process, ending 8800

Raw materials purchases 80000

Decrease in raw materials inventory 4000
Raw materials used 84000
Direct labor 85000
Factory overhead 51000
Manufacturing cost 220000
For the Month
of August
120000 Formula:
100000 Applied FOH per job = ( Direct labor cost per job / total direct la
80000

For the Month

of August
120000 Formula:
100000 Applied FOH per job = ( Direct labor cost per job / total direct la
80000
For the Month
of August
120000 Formula:
100000 Applied FOH per job = ( Direct labor cost per job / total direct la
80000
er job / total direct labor ) * Total Applied FOH

er job / total direct labor ) * Total Applied FOH

er job / total direct labor ) * Total Applied FOH