Job Order Costing Exercises-Solved Problems-Home Work Solution

Accounting Details
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Questions and Answers
Job Costing
Exam Practice Questions
Maths Questions
Job Order Costing System Exercises Management Accounting
and Problems Break even point formula

Budgeting and Planning
Business and Quality
Improvement Programs
By Products and Joint Products
Costing
Capital Budgeting Decisions
Cash Flow Statement
Contribution margin ratio
Controlling and Costing
Materials
Cost Accounting Formulas
Cost Terms, Concepts and
Exercise 1– Cost accumulation Procedure Determination Classification
Exercise 2– Job order cost sheet Current ratio
Exercise 3– Job order costing-T Accounts and Journal Entries
Financial statement Analysis
1. Jobs Hiring Immediately
Exercise 4– Job Order Cycle Entries
Financial statement analysis
2. Albertsons Job Application
ads
Gross Profit Ratio
Exercise 5– Journal entries, T Accounts, Over and Under applied Introduction to Managerial
overhead Income Statement Accounting
Job Order Costing system
EXERCISE 1–COST ACCUMULATION Linear Programming

Managerial Accounting Terms
PROCEDURE DETERMINATION:
Pricing Products and Services
Classify these industries with respect to the type of cost accumulation
Process Costing System
procedure generally used–job order costing or process costing.
Process Costing System
Segment Reporting and
a. Meat k. Pianos
Transfer Pricing
b. Sugar l. Linoleum Service Department Costing

Standard Costing and Variance
c. Steel m. Leather
Variable Costing System
d. Breakfast cereal n. Nylon
e. Paper boxes o. Baby foods Search the site 
f. Wooden furniture p. Locomotives
g. Toys and novelties q. Office machines equipment
h. Coke r. Luggage Want To Grow

i. Cooking utensils s. Paint Your Business Online?
j. Caskets t. Tires and tubes
SOLUTION:
Job order cost procedure: (e), (f), (g), (i), (j), (k), (p), (q), (r)
Process costing procedure: (a), (b), (c), (d), (h), (l), (m), (n), (o), (s), (t)
EXERCISE 2–JOB ORDER COST SHEET: Categories

Forge Machine Works collects its cost data by the job order cost
Accommodation Bills of
accumulation procedure. For Job 642, the following data are available: Exchange
Accounting
Accounting Calculators
Accounting Conventions
1. Jobs Hiring Immediately Accounting cycle
2. Albertsons Job Application Accounting Debt

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Accounting Definitions
Albertsons Job Application Accounting Equation
Jobs Hiring Immediately Accounting For Consignment

Accounting for Depreciation
Job Applications Online
Accounting For Joint Ventures
Clerical Receptionist Jobs Accounting for Non-Trading

Concerns
Top 5 Work At Home Jobs Accounting Formula's
Part Time Jobs Online Accounting Information system

Accounting Journal Entries
Accounting Principle
Direct Materials Direct
Accounting Procedures
Labor
Accounting Ratio's
Accounting Softwares
Accounting Statments
Accounts From Incomplete
Records
Activity Base Defination
Activity Based Costing System
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Addition of materials and
Further delay might cause premiums to increase beginning inventory
by 6%*. Chat With Our Experts Today!
Addition of materials and
Coverfox.com
inventory
Adjustment Codes
9/14 Issued $ 1,200 Week of Sep. 20 180 hrs
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@
Authors
$6.20/hr
Average costing Method
9/20 Issued 662 Week of Sep. 26 140 hrs Balance sheet
@
Bank Accounting
$7.30/hr
Bank Reconciliation Statement
9/22 Issued 480 Bench Marking
Factory overhead applied at the rate of $3.50 per direct labor Bill
hour.Required: Bills of Exchange

blog
1. The appropriate information on a job cost sheet.
Bonds
2. The sales price of the job, assuming that it was contracted with
1. Jobs Hiring Immediately Book-keeping
a markup of 40% of cost.
2. Albertsons Job Application Bookkeeping
ads
Branches of Accounting
SOLUTION:
Budget
1.
budgeting
Budgeting and Planning
Forge Machine Works
Business and Quality
Job Order Cost Sheet–Job 642
Improvement Programs
capital
Direct materials Direct labor Applied factory ov Capital Budgeting Decisions
Cash Book
Date Amount Date Hours Rate Cost Date Hou
Cash Flow Statement
Issued (Week (Week
of) of)
Consignment Accounts
Controlling and Costing
9/14 $1,200 9/20 180 $6.20 $1,116 9/20 180 Materials
Cost Accounting
9/20 662 9/26 140 7.30 1,022 9/26 140
Cost terms concepts and
9/22 480 classifications
Costing
——– ———-
Debit and Credit
$2,342 $2,138 Debt Service
===== ====== Decentralization
Decision Making
2. Decision Making Tool for

Management
Sales Price of job 642, contracted with a markup of 40% of cost: Depreciation
E-Business
Direct materials $2,342 Earnings Per Share
Direct labor 2,138 Economic Order Quantity

Entry system
Applied factory overhead 1,120
Equity Ratio
Expenditures
Total factory cost $5,600 Final Accounts

Financial Accounting
Markup 40% of cost 2,240
Financial Statement Analysis
——- Funds Transfer Pricing
$7,840
Gearing Ratio
1. Jobs Hiring Immediately ===== Gross Profit Analysis
2. Albertsons Job Application Horizontal Analysis
ads
Income Taxes
EXERCISE 3–JOB ORDER COSTING:
Insurance Policy
The Cambridge Company uses job order costing. At the beginning of the
Introduction to managerial
May, two jobs were in process: accounting
Inventory
Job Job372
Job Order Costing System
369
Joint Products and Cost
Materials $ $ 700 Joint Venture Accounts
2,000 Journal
Direct labor 1,000 300 Knowledge Management

Ledger
Applied factory overhead 1,500 450
Linear Programming Technique
There was no inventory of finished goods on May1. During the Managerial Accounting
month, Jobs 373, 374, 375, 376, 378, and 379 were started.Materials
Managment Accounting
requisitions for May totaled $13,000, direct labor cost, $10,000, and
Marginal Costing System
actual factory overhead, $16,000. Factory overhead is applied at a
Mergers and Acquisitions
rate of 150% of direct labor cost. The only job still in process at the
end of May is No. 379, with costs of $1,400 for materials and $900 Method of Depreciation
for direct labor. Job 376, the only finished job on hand at the end of Net Present value
May, has a total cost of $2,000. Payments
Pricing products and services
Required:
Pricing Strategies
1. T accounts for work in process, finished goods, cost of goods Privacy Policy
sold, factory overhead control, and applied factory overhead. Process Costing System
2. General journal entries to record: Profit
a. Cost of goods manufactured
Profit and Loss Account
b. Cost of goods sold
quality cost
c. Closing of over or underapplied factory overhead to cost of
goods sold. quality Management
Quantitative Method
revenue
Sales
SOLUTION:
Segment Reporting
T Accounts
Single Entry System
Standard Costing and Variance
Work in Process Finished Goods
Analysis
Stock Accounting
Stocks
May1 Balance Finished From Cost of
ads
Subdivision of Journal
No. 369 goods Work in goods sod Subdivisions of Journal
4,500 40,300 Process 38,300 Terms of Use
No. 372 40,300May31 Total Quality Management
1,450Materials Balance: System
13,000Direct No.376 Trading Account
labor 2,000 Trial Balance
10,000Factory Uncategorized
O/H 15,000
Variable Costing System
43,950May31
Varience Analaysis
Balance:
Cost of Goods sold Volume Profit CVP Relationship
No. 379
3,650*
From finished
Financial Accounting
goods
Accounting for Depreciation
*$1,400 + $900 + ($900 × 150%)
38,300Underapplied
Accounting for Joint Ventures
Overhead
Accounting For Non-Trading
Factory Overhead Control
1,000 Concerns
39,300
Accounting Principles and
Accounting Equation
16,000 15,000
Bookkeeping and Bookkeeping
1,000 Terms
16,000 Capital and Revenue Items

Applied Factory Overhead
Consignment Accounts
Final Accounts

Journal
15,000 15,000
Single Entry System
Subdivision of Journal

What’s new !
General journal entries to record: Also see formula of gross margin

ratio method with financial
analysis, balance sheet and
Cost of goods manufactured: Dr Cr
income statement analysis
Finished goods 40,300 tutorials for free download on
Accounting4Management.com.
Work in process 40,300
Accounting students can take
Cost of goods sold: help from Video lectures,
handouts, helping materials,
Cost of goods sold 38,300 assignments solution, On-line
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Finished goods 38,300 Quizzes, GDB, Past Papers, books
and Solved problems. Also learn
Closing of underapplied factory overhead to
latest Accounting & management
cost of goods sold:
software technology with tips and
Cost of goods sold 1,000 tricks.
Factory overhead control 1,000
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 14,500

suppliers on account)
Work in process:
Job1 Job2 Job3 Total
Work in process $ — — $ 1,000

January 1, 19B 1,000
Job costs during

January, 19B:

Direct materials 4,000 $6,000 $5,000 15,000
ads
Direct labor 5,000 8,000 7,000 20,000
Applied factory 5,000 8,000 7,000 20,000

overhead
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.
Job 3 started in January, finished during January, and now in the

finished goods inventory awaiting customer’s disposition
Finished goods inventory January 1, 19B.
Required:
Journal entries, with detail for the respective job orders and factory
overhead subsidiary records, to to record the following transactions for the
January:
1. Purchase of materials on account.

2. Labor paid.
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 30,000

1. Jobs Hiringpayable
Immediately
2. Albertsons
2 Job Application
Accrued payroll 25,000
ads
Cash 25,000
3. Factory overhead 3,500

control
Indirect labor 3,500

(WIP)
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 1,500

control
Supplies 1,500
Materials 16,500
5 Factory overhead 1,000

control
Depreciation 1,000
Accumulated 1,000
Depreciation
6 Factory overhead 14,500

control
Other factory 14,500

overhead costs
Accounts 14,500
2. Albertsons payable
Job Application
ads
7 Work in process 20,000
Job1 5,000
Job2 8,000
Job3 7,000
Factory 20,000

overhead control (or
applied FOH)
8 Finished goods 34,000
Work in 34,000
process (WIP)
Job1 15,000
Job3 19,000
9 Cash 21,000
Sales 21,000
10 Cost of goods sold 15,000
Finished 15,000
goods
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
ads
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.
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:
ads
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
Manufacturing overhead 20,000
Raw materials 380,000
Sales commission expense 90,000
Administrative salaries 200,000

expense
Salaries and wages 475,000

payable
4 Sales travel expense 17,000
5 Manufacturing overhead 43,000
6 Advertising expense 180,000

7
2. Albertsons Manufacturing overhead
Job Application 280,000
ads
Depreciation expense 70,000
Accumulated 350,000
depreciation
8 Manufacturing overhead 7,000
Insurance expense 3,000
Prepaid insurance 10,000
9* Work in process 480,000
10 Finished Goods 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 machine-hour = $480,000.
2: T Accounts
Accounts Receivable Raw Materials W
2. Albertsons
11 Job Application Bal. (2) Bal.
ads
1,500,000 20,000 380,000 20,00
(1) (2)
410,000 360,0
(3)
Finished Goods
Bal.
75,00
50,000
(9)
Bal. (11)
480,0
30,000 870,000
10 Bal.
900,000 Prepaid Insurance 30,00
(8)
10,000
Accounts Payable
(1)
410,000 Salaries and Wages
(4) Payable
17,000
(5)
(3)
Manu
43,000
475,000
(6)
180,000 (2)
20,00
(3)
Cost of goods sold
110,0
Sales (5)
(11)
43,00
870,000
(7)
(11)
280,0
1,500,000
(8)
7,000
Administrative Salary
Expense
Sales Commissions
460,0
Expenses
(3)
200,000
1. Jobs Hiring
(3) Immediately
90,000
ads
Depreciation Expenses Ins
Advertising expense
(7) (8)
(6) 70,000 3,000
180,000
Sale
(4)
17,00
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 20,000
overhead
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 – 850,000

$20,000 overapplied O/H
————–
1. JobsGross
Hiring Immediately
margin 650,000
ads
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
———— ————-
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
OTHERJob
2. Albertsons RELATED
Application ACCOUNTING ARTICLES:
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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 Problems
About The Author
Sana
Latest Comments
Sibylle Preuschat
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 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 $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.
Reply

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Accounting Details

Questions and Answers

Exam Practice Questions

Job Order Costing System Exercises Management Accounting

and Problems Break even point formula

EXERCISE 1–COST ACCUMULATION Linear Programming

b. Sugar l. Linoleum Service Department Costing

e. Paper boxes o. Baby foods Search the site 

f. Wooden furniture p. Locomotives

g. Toys and novelties q. Ofﬁce machines equipment

h. Coke r. Luggage Want To Grow

EXERCISE 2–JOB ORDER COST SHEET: Categories

1. Jobs Hiring Immediately Accounting cycle

2. Albertsons Job Application Accounting Debt

Jobs Hiring Immediately Accounting For Consignment

Clerical Receptionist Jobs Accounting for Non-Trading

Part Time Jobs Online Accounting Information system

hour.Required: Bills of Exchange

2. Decision Making Tool for

Direct labor 2,138 Economic Order Quantity

Total factory cost $5,600 Final Accounts

Direct labor 1,000 300 Knowledge Management

16,000 Capital and Revenue Items

General journal entries to record: Also see formula of gross margin

Cost of goods sold 1,000 tricks.

Factory overhead control 1,000

EXERCISE 4–JOB ORDER CYCLE

Materials and supplies:

Inventory, January 1, 19B $10,000

Purchases on account 30,000

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

Other factory overhead costs (all from outside 14,500

Job1 Job2 Job3 Total

Work in process $ — — $ 1,000

Job costs during

2. Albertsons Job Application

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

Job 1 started in December, 19A, ﬁnished during January, and sold to

Job 2 started in January, not yet ﬁnished.

Job 3 started in January, ﬁnished during January, and now in the

Finished goods inventory January 1, 19B.

1. Purchase of materials on account.

Subsidiary Debit Credit

Accounts 30,000

3. Factory overhead 3,500

Indirect labor 3,500

Work in process 20,000

Job1 5,000

Job2 8,000

Job3 7,000

4. Work in process 15,000

Job1 4,000

Job2 6,000

Job3 5,000

Factory overhead 1,500

Supplies 1,500

5 Factory overhead 1,000

Depreciation 1,000

6 Factory overhead 14,500

Other factory 14,500