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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
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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
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 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
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 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
1. Jobs Hiring Immediately
Stocks
2. Albertsons Job Application
May1 Balance Finished From Cost of

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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,
1. Jobs Hiring Immediately
handouts, helping materials,
2. Albertsons Job Application
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:
1. Jobs Hiring Immediately

2. Albertsons Job Application

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

Work in process 20,000

(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
1. Jobs Hiring Immediately
             Accounts 14,500
2. Albertsons payable
Job Application
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 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

1. Jobs Hiring Immediately

The company applies overhead cost to jobs on the basis of machine-hours
2. Albertsons Job Application
worked. For the current year, the company estimated that it would work
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 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.

1. Jobs Hiring Immediately

Required:
2. Albertsons Job Application
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

2 Work in process 360,000

Manufacturing overhead 20,000

Raw materials 380,000

3 Work in process 75,000

Manufacturing overhead 110,000

Sales commission expense 90,000

Administrative salaries 200,000

expense

Salaries and wages 475,000

payable

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

1. Jobs Hiring Immediately
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

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 machine-hour = $480,000.

2: T Accounts

Accounts Receivable Raw Materials W

1. Jobs Hiring Immediately

2. Albertsons
11      Job Application Bal.       (2)          Bal.    
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 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
2. Albertsons Job Application
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
2. Albertsons Job Application
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
1. Jobs Hiring Immediately
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

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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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