Saint Vincent College of Cabuyao

Job Order Costing

Quiz No. 1

Name: Date:

Course: Score:

Problem 1:

The Good Company had the following inventories on April 1, 2019:

Raw Material 50,000

Finished Goods 28,000

WIP – Material 2,000

WIP – Labour 30,000

WIP – FOH 12,000

During the month the cost of material purchased was Php 120,000, direct labor cost incurred was $160,000 and
factory overhead applicable to production was 60,000, on April 30 inventories were:

Raw Material 46,000

Finished Goods 44,000

WIP – Material 10,000

WIP – Labour 18,000

WIP – FOH 8,000

Required:

Prepare Journal entries on April 30, to show the flow of cost through the proper summary accounts and also give the
subsidiary records.

Problem 2:

The Bright Manufacturing has a partial job order cost system instead of predetermining a factory overhead rate. The
company computes a separate factory overhead rate at the end of each month and this rate is used to charge factory
overhead to the jobs worked on during that month using the number of direct labour hours used on the jobs as the
basis of such allocation. In the following table, the actual factory overhead costs and the direct labour hours for the
past two months are listed.
 May June

Actual Factory Overhead Costs Php 6,000 Php 12,000

Actual direct labour hours 15,000 20,000

During this two month period one customer sent in an identical order each month, calling for the production of 1,000
units, requiring 400 direct labour hours at Php 1.00 per hour and material Php 750.

Required:

Compute (a) The total and the unit cost for the job in each of the two months and (b) Give your comments regarding
this method of charging actual factory overhead costs to jobs.

Problem 3:

The following expenses were incurred for a job during the year ended on March 31, 2019

Direct Materials Php 30,000

Direct Wages Php 40,000
Chargeable Expenses Php 10,000
Factory Overhead Php 20,000
Selling and Distribution Expenses Php 20,000
Administrative Overheads Php 30,000

Single price for the above job was Php 180,000. You are required to prepare a statement showing the profit earned
during the year ended March 31, 2019 from the job and an estimated price of a job which is to be executed in the
year 2019-20, charging the same percentage of profit on sales as it was during the year 2019-20. Materials, wages
and chargeable expenses will be required of Php 50,000, Php 70,000 and Php 20,000 respectively for the job. The
various overheads should be recovered on the following basis while calculating the estimated price:

a. Factory overheads as a percentage of direct wages.

b. Administrative and selling and distribution overheads as a percentage of factory cost.