94. Figure 4-4.
Tiger Company uses job-order costing. At the end of the month, the following data was gathered:
Job #
Total Cost
Complete?
Sold?
429
$409
no
no
430
$513
yes
no
431
$115
no
no
432
$790
yes
yes
433
$650
yes
no
434
$540
no
no
435
$ 90
no
no
436
$970
yes
yes
437
$179
no
no
438
$400
no
no
Tiger’s selling price is cost plus 50% for each of its houses.
Refer to Figure 4-4. What is the selling price of Job 436?
95. Figure 4-5.
Schultz Lawnmower Company makes custom lawnmowers for individual customers. On July 1, there was one
job in process, Job 757, with a cost of $45,650. Jobs 758, 759, and 760 were started during the month of July.
Data on costs added during the month are as follows:
Job 757
Job 758
Job 759
Direct Materials
$12,500
$ 6,740
$2,520
Direct Labor
$ 5,880
$10,280
$3,760
Overhead is applied to production at the rate of 85% of direct labor cost. Job 760 was completed on July 26 and the client was billed at cost plus
45%. All other jobs remained in process.
Refer to Figure 4-5. Calculate the balance in Work-in-Process on July 31.
96. Figure 4-5.
Schultz Lawnmower Company makes custom lawnmowers for individual customers. On July 1, there was one
job in process, Job 757, with a cost of $45,650. Jobs 758, 759, and 760 were started during the month of July.
Data on costs added during the month are as follows:
Job 757
Job 758
Job 759
Direct Materials
$12,500
$ 6,740
$2,520
Direct Labor
$ 5,880
$10,280
$3,760
Overhead is applied to production at the rate of 85% of direct labor cost. Job 760 was completed on July 26 and the client was billed at cost plus
45%. All other jobs remained in process.
Refer to Figure 4-5. What is the price of Job 760?
97. Figure 4-5.
Schultz Lawnmower Company makes custom lawnmowers for individual customers. On July 1, there was one
job in process, Job 757, with a cost of $45,650. Jobs 758, 759, and 760 were started during the month of July.
Data on costs added during the month are as follows:
Job 757
Job 758
Job 759
Direct Materials
$12,500
$ 6,740
$2,520
Direct Labor
$ 5,880
$10,280
$3,760
Overhead is applied to production at the rate of 85% of direct labor cost. Job 760 was completed on July 26 and the client was billed at cost plus
45%. All other jobs remained in process.
Refer to Figure 4-5. If selling and administrative expense for the month of July equaled $ 6,000, what is operating income for the month of July?
98. Figure 4-6.
Stutz, Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to individual customer’s
specifications. Stutz uses job-order costing to keep track of its costs. In February it worked on three jobs. Data
for these jobs are as follows:
Job 175
Job 178
Job 179
Balance 2/1
$13,790
$0
$0
Direct Materials
16,200
8,500
30,500
Direct Labor Cost
23,300
7,600
45,000
Machine Hours
400
300
2,000
Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the only one unfinished. The balance of Finished Goods
on February 1 is $94,000 (consisting of Job 177). Jobs 177, and 179 are sold during February. Stutz sells its product at cost plus 40%.
Refer to Figure 4-6. Calculate the balance in Work-in-Process on February 28.
99. Figure 4-6.
Stutz, Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to individual customer’s
specifications. Stutz uses job-order costing to keep track of its costs. In February it worked on three jobs. Data
for these jobs are as follows:
Job 175
Job 178
Job 179
Balance 2/1
$13,790
$0
$0
Direct Materials
16,200
8,500
30,500
Direct Labor Cost
23,300
7,600
45,000
Machine Hours
400
300
2,000
Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the only one unfinished. The balance of Finished Goods
on February 1 is $94,000 (consisting of Job 177). Jobs 177, and 179 are sold during February. Stutz sells its product at cost plus 40%.
Refer to Figure 4-6. Calculate the balance of Finished Goods at February 28.
100. Figure 4-6.
Stutz, Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to individual customer’s
specifications. Stutz uses job-order costing to keep track of its costs. In February it worked on three jobs. Data
for these jobs are as follows:
Job 175
Job 178
Job 179
Balance 2/1
$13,790
$0
$0
Direct Materials
16,200
8,500
30,500
Direct Labor Cost
23,300
7,600
45,000
Machine Hours
400
300
2,000
Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the only one unfinished. The balance of Finished Goods
on February 1 is $94,000 (consisting of Job 177). Jobs 177, and 179 are sold during February. Stutz sells its product at cost plus 40%.
Refer to Figure 4-6. What is Cost of Goods Sold for February?
101. Figure 4-6.
Stutz, Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to individual customer’s
specifications. Stutz uses job-order costing to keep track of its costs. In February it worked on three jobs. Data
for these jobs are as follows:
Job 175
Job 178
Job 179
Balance 2/1
$13,790
$0
$0
Direct Materials
16,200
8,500
30,500
Direct Labor Cost
23,300
7,600
45,000
Machine Hours
400
300
2,000
Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the only one unfinished. The balance of Finished Goods
on February 1 is $94,000 (consisting of Job 177). Jobs 177, and 179 are sold during February. Stutz sells its product at cost plus 40%.
Refer to Figure 4-6. What is sales revenue for February?
102. Figure 4-7.
Laudermilk produces dairy equipment. Most of its jobs have a number of units per job. The company has two
different departments through which all jobs pass. Overhead is applied using a plantwide rate of $13 per direct
labor hour. Direct Labor wages average $8 an hour. Data for Job #3 for the year is:
Direct Materials
$40,000
Direct Labor Costs
Dept. A
60,000
Dept. B
12,000
Machine hours used
Dept. A
200
Dept. B
2,400
Units Produced
20,000
Refer to Figure 4-7. Compute the total cost of Job #3.
103. Figure 4-7.
Laudermilk produces dairy equipment. Most of its jobs have a number of units per job. The company has two
different departments through which all jobs pass. Overhead is applied using a plantwide rate of $13 per direct
labor hour. Direct Labor wages average $8 an hour. Data for Job #3 for the year is:
Direct Materials
$40,000
Direct Labor Costs
Dept. A
60,000
Dept. B
12,000
Machine hours used
Dept. A
200
Dept. B
2,400
Units Produced
20,000
Refer to Figure 4-7, compute the cost per unit.
104. Figure 4-8.
John’s Water Slides makes custom water slides for hotels. On September 1, there were three jobs in process,
Jobs 812, 813, and 814. Two more jobs were started during September, Jobs 815 and 816. By September 30,
Jobs 812, 814, and 816 were finished. The following data has been collected:
Job 812
Job 813
Job 814
Job 815
Job 816
9/1 Balance
$615
$830
$ 945
—
—
Direct Materials
750
235
1,280
$200
$915
Direct Labor
420
115
560
320
875
Overhead is applied at the rate of 120% of direct labor cost. Jobs are sold at cost plus 60%. Selling and administrative expenses for September totaled
$2,950. By September 30, Jobs 812 were 816 are sold, but the customer who ordered Job 814 decided he did not want the slide so it is still in the
warehouse.
Refer to Figure 4-8. Calculate the ending Balance in Work-in-Process as of September 30.
105. Figure 4-8.
John’s Water Slides makes custom water slides for hotels. On September 1, there were three jobs in process,
Jobs 812, 813, and 814. Two more jobs were started during September, Jobs 815 and 816. By September 30,
Jobs 812, 814, and 816 were finished. The following data has been collected:
Job 812
Job 813
Job 814
Job 815
Job 816
9/1 Balance
$615
$830
$ 945
—
—
Direct Materials
750
235
1,280
$200
$915
Direct Labor
420
115
560
320
875
Overhead is applied at the rate of 120% of direct labor cost. Jobs are sold at cost plus 60%. Selling and administrative expenses for September totaled
$2,950. By September 30, Jobs 812 were 816 are sold, but the customer who ordered Job 814 decided he did not want the slide so it is still in the
warehouse.
Refer to Figure 4-8. What is the ending balance of Finished Goods if the beginning balance was $0?
106. Figure 4-8.
John’s Water Slides makes custom water slides for hotels. On September 1, there were three jobs in process,
Jobs 812, 813, and 814. Two more jobs were started during September, Jobs 815 and 816. By September 30,
Jobs 812, 814, and 816 were finished. The following data has been collected:
Job 812
Job 813
Job 814
Job 815
Job 816
9/1 Balance
$615
$830
$ 945
—
—
Direct Materials
750
235
1,280
$200
$915
Direct Labor
420
115
560
320
875
Overhead is applied at the rate of 120% of direct labor cost. Jobs are sold at cost plus 60%. Selling and administrative expenses for September totaled
$2,950. By September 30, Jobs 812 were 816 are sold, but the customer who ordered Job 814 decided he did not want the slide so it is still in the
warehouse.
Refer to Figure 4-8. What is the selling price of Job 816?
107. Figure 4-8.
John’s Water Slides makes custom water slides for hotels. On September 1, there were three jobs in process,
Jobs 812, 813, and 814. Two more jobs were started during September, Jobs 815 and 816. By September 30,
Jobs 812, 814, and 816 were finished. The following data has been collected:
Job 812
Job 813
Job 814
Job 815
Job 816
9/1 Balance
$615
$830
$ 945
—
—
Direct Materials
750
235
1,280
$200
$915
Direct Labor
420
115
560
320
875
Overhead is applied at the rate of 120% of direct labor cost. Jobs are sold at cost plus 60%. Selling and administrative expenses for September totaled
$2,950. By September 30, Jobs 812 were 816 are sold, but the customer who ordered Job 814 decided he did not want the slide so it is still in the
warehouse.
Refer to Figure 4-8. What is the Cost of Goods Sold for September?
108. Figure 4-8.
John’s Water Slides makes custom water slides for hotels. On September 1, there were three jobs in process,
Jobs 812, 813, and 814. Two more jobs were started during September, Jobs 815 and 816. By September 30,
Jobs 812, 814, and 816 were finished. The following data has been collected:
Job 812
Job 813
Job 814
Job 815
Job 816
9/1 Balance
$615
$830
$ 945
—
—
Direct Materials
750
235
1,280
$200
$915
Direct Labor
420
115
560
320
875
Overhead is applied at the rate of 120% of direct labor cost. Jobs are sold at cost plus 60%. Selling and administrative expenses for September totaled
$2,950. By September 30, Jobs 812 were 816 are sold, but the customer who ordered Job 814 decided he did not want the slide so it is still in the
warehouse.
Refer to Figure 4-8. What is John’s operating income for the month of September?
109. Figure 4-9.
Jen’s has the following transactions for the month of November:
1) Purchased materials on account for $111,482.
2) Materials Requisitioned for $82,383.
3) Direct Labor for the month was incurred (but not yet paid) of $51,000
4) Actual Overhead for the month was $33,000. It has not been paid yet (Charge to Various Payables)
5) Overhead is applied to production at the rate of 70% of direct labor.
6) Jobs totaling $56,000 were transferred from Work-in-Process to Finished Goods.
7) Jobs costing $41,000 were sold.
Balances at the beginning of the month were:
Materials
$ 17,890
Work-in-Process
0
Finished Goods
8,321
Refer to Figure 4-9. Calculate the Ending Balance of Raw Materials.
110. Figure 4-9.
Jen’s has the following transactions for the month of November:
1) Purchased materials on account for $111,482.
2) Materials Requisitioned for $82,383.
3) Direct Labor for the month was incurred (but not yet paid) of $51,000
4) Actual Overhead for the month was $33,000. It has not been paid yet (Charge to Various Payables)
5) Overhead is applied to production at the rate of 70% of direct labor.
6) Jobs totaling $56,000 were transferred from Work-in-Process to Finished Goods.
7) Jobs costing $41,000 were sold.
Balances at the beginning of the month were:
Materials
$ 17,890
Work-in-Process
0
Finished Goods
8,321
Refer to Figure 4-9. What is the ending balance in Work-in-Process?
111. Figure 4-9.
Jen’s has the following transactions for the month of November:
1) Purchased materials on account for $111,482.
2) Materials Requisitioned for $82,383.
3) Direct Labor for the month was incurred (but not yet paid) of $51,000
4) Actual Overhead for the month was $33,000. It has not been paid yet (Charge to Various Payables)
5) Overhead is applied to production at the rate of 70% of direct labor.
6) Jobs totaling $56,000 were transferred from Work-in-Process to Finished Goods.
7) Jobs costing $41,000 were sold.
Balances at the beginning of the month were:
Materials
$ 17,890
Work-in-Process
0
Finished Goods
8,321
Refer to Figure 4-9. What is the correct journal entry to record actual overhead for the month?
112. Figure 4-9.
Jen’s has the following transactions for the month of November:
1) Purchased materials on account for $111,482.
2) Materials Requisitioned for $82,383.
3) Direct Labor for the month was incurred (but not yet paid) of $51,000
4) Actual Overhead for the month was $33,000. It has not been paid yet (Charge to Various Payables)
5) Overhead is applied to production at the rate of 70% of direct labor.
6) Jobs totaling $56,000 were transferred from Work-in-Process to Finished Goods.
7) Jobs costing $41,000 were sold.
Balances at the beginning of the month were:
Materials
$ 17,890
Work-in-Process
0
Finished Goods
8,321
Refer to Figure 4-9. What is the journal entry to record applied overhead for the month?
113. Figure 4-9.
Jen’s has the following transactions for the month of November:
1) Purchased materials on account for $111,482.
2) Materials Requisitioned for $82,383.
3) Direct Labor for the month was incurred (but not yet paid) of $51,000
4) Actual Overhead for the month was $33,000. It has not been paid yet (Charge to Various Payables)
5) Overhead is applied to production at the rate of 70% of direct labor.
6) Jobs totaling $56,000 were transferred from Work-in-Process to Finished Goods.
7) Jobs costing $41,000 were sold.
Balances at the beginning of the month were:
Materials
$ 17,890
Work-in-Process
0
Finished Goods
8,321
Refer to Figure 4-9. What is the ending balance of Finished Goods?
114. Match each item with the correct statement below.
1. Estimated overhead for a single department divided
3. The amount by which applied overhead exceeds
4. Overhead assigned to production using predetermined
5. The difference between actual overhead and applied
6. The amount by which actual overhead exceeds
7. A single overhead rate calculated using all estimated
overhead for a factory divided by the estimated activity
115. Match each item with the correct statement below.
1. An approach that assigns actual costs of direct
2. An approach that assigns the actual costs of direct
materials and direct labor to products but uses a
3. A costing system that accumulates production costs by
4. A costing system in which costs are collected and
116. McElligott Doll Company had the following overhead costs and production for two months. The dolls are
identical to each other.
September
January
Actual Overhead
$12,000
$12,000
Number of Dolls
3,000
2,000
A) What is the overhead cost per doll per month?
B) What type of costing is being used here and what is the problem with this type that is presented here?
117. Williams Incorporated estimated overhead to be $440,000 and direct labor hours to be 100,000 for the
year. Actual direct labor ended up being 120,000 hours.
118. Ski Company produces various types of snow skis. Estimated overhead for the year was $720,000 and
estimated direct labor hours were 240,000. During the month of June, 17,400 direct labor hours were worked,
$50,400 of direct materials were used and the average wage was $12 per hour. In June, 15,000 pairs of skis
were produced.
A) Calculate the predetermined overhead rate.
B) Calculate the overhead applied to production for June.
C) Calculate unit cost for each pair of skis.
119. Wisteria Company provided the following data:
Budgeted overhead
$80,000
Budgeted direct labor hours
10,000
Actual overhead
$86,000
Actual direct labor hours
10,860
A) What is applied overhead?
B) What is the overhead variance? Is it overapplied or underapplied?
$ 50,400
208,800
52,200
Total
$311,400
120. Budgeted overhead is $60,000, budgeted direct labor hours are 3,000, actual overhead is $64,000, and
direct labor hours are 3,230. Unadjusted Cost of Goods Sold is $135,670. Calculate the following:
A) Calculate the Overhead Variance
B) What is adjusted Cost of Goods Sold?
121. A company has two departments that all goods pass through, machining and assembly. Machining
overhead is applied based on machine hours and assembly overhead is applied based on direct labor hours. Data
on each department is as follows:
Assembly
Budgeted Overhead
$40,000
Budgeted Direct Labor Hours
10,000
Budgeted Machine Hours
1,000
Actual Overhead
$39,200
Actual Direct Labor Hours
9,980
Actual Machine Hours
850
A) Calculate the overhead rate for each department.
B) What is each department’s applied overhead?
C) Calculate each department’s overhead variance. Specify whether it is overapplied or underapplied.
122. Elf Company produces ornamental trees and uses normal costing. Elf applies overhead based on direct
labor hours. The following data are provided:
Budgeted
Actual
Overhead
$400,000
$392,000
Machine Hours
20,000
18,000
Direct Labor Hours
16,000
17,840
Direct Materials Cost
$521,000
Direct Labor Cost
$410,000
Units Produced
10,000
A) Calculate applied overhead.
B) Calculate the unit cost.
123. Pribil Farm Equipment is a job-order costing manufacturer that uses a plantwide overhead rate based on
direct labor hours. Estimations for the year include $420,000 in Overhead and 30,000 direct labor hours. Pribil
worked on five jobs in March. Data are as follows:
Job 89
Job 90
Job 91
Job 92
Job 93
Balance, 3/1
$23,110
$18,240
$ 9,510
$0
$0
Direct Materials
13,000
17,210
22,900
15,240
8,210
Direct Labor cost
8,075
11,500
16,250
9,750
4,860
Direct Labor Hours
1,615
2,300
3,250
1,950
972
By March 31, Jobs 89 and 91 were completed and sold. The rest of the jobs remained in process.
A) Calculate the plantwide overhead rate.
B) Calculate the Work-in-Process on March 31.
Job 90
Job 92
Job 93
Balance, 3/1
$18,240
$0
$0
Direct Materials
17,210
15,240
8,210
Direct Labor cost
11,500
9,750
4,860
Overhead
32,200
27,300
13,608
Total
$79,150
$52,290
$26,678
124. Fowler Company is a job-order costing company that produces customized bicycles. During the month of
October, Fowler had three jobs in-process, Jobs 3, 4, & 5. By the end of the month all three jobs had been
completed, with Job 3 being sold for $435. The following costs belong to each job:
Job 3
Job 4
Job 5
Direct Materials
$ 80
$ 75
$ 85
Direct Labor
100
110
95
Applied Overhead
120
132
114
Total
$300
$317
$294
A) Overhead is applied based on direct labor dollars. What is the overhead rate?
B) What rate does Fowler use to price its jobs?
125. Feline Company uses a normal job-order costing system. Currently, a plantwide overhead rate based on
direct labor is used. Lola Katz, the plant manager, has heard that departmental overhead rates can offer
significantly better cost assignments than a plantwide rate can offer. Some jobs spend most of their time in
Department A, while others spend most of their time in Department B. Feline has the following data for its two
departments for the coming year:
Department A
Department B
Expected overhead cost
$75,000
$33,000
Expected Direct Labor Hours
30,000
24,000
A) Compute the plantwide overhead rate.
B) Compute the departmental overhead rates. (Carry out your answers to 3 decimal places.)
C) Which overhead rate would you recommend and why?
126. Figure 4-10.
During February, Alexander, Inc., worked on two jobs with the following data:
Job 12
Job 13
Units in Each Order
100
200
Units Sold
100
—-
Materials Requisitioned
$ 2,480
$ 1,970
Direct Labor Hours
820
1,166
Direct Labor Cost
$12,300
$17,490
Overhead is assigned on the basis of direct labor hours at a rate of $12. During February, Job 12 was completed and transferred to Finished Goods.
Job 13 is the only unfinished job at the end of the month.
Refer to Figure 4-10.
A) Calculate the per-unit cost of Job 12.
B) Calculate the ending balance in the Work-in-Process account.
127. Figure 4-10.
During February, Alexander, Inc., worked on two jobs with the following data:
Job 12
Job 13
Units in Each Order
100
200
Units Sold
100
—-
Materials Requisitioned
$ 2,480
$ 1,970
Direct Labor Hours
820
1,166
Direct Labor Cost
$12,300
$17,490
Overhead is assigned on the basis of direct labor hours at a rate of $12. During February, Job 12 was completed and transferred to Finished Goods.
Job 13 is the only unfinished job at the end of the month.
Refer to Figure 4-10.
A) Prepare the journal entries for requisitioning all materials used during the month.
B) Prepare the journal entries for direct labor for the month. Assume the workers have not been paid yet.
Raw Materials
$4,450
Wages Payable
$29,790
128. Figure 4-10.
During February, Alexander, Inc., worked on two jobs with the following data:
Job 12
Job 13
Units in Each Order
100
200
Units Sold
100
—-
Materials Requisitioned
$ 2,480
$ 1,970
Direct Labor Hours
820
1,166
Direct Labor Cost
$12,300
$17,490
Overhead is assigned on the basis of direct labor hours at a rate of $12. During February, Job 12 was completed and transferred to Finished Goods.
Job 13 is the only unfinished job at the end of the month.
Refer to Figure 4-10.
Prepare the journal entries reflecting the completion and sale on account of Job 12. The selling price is 160% of cost.
129. What are the three steps of overhead application?
130. If actual overhead for the year is $33,451 and applied overhead is $32,000, is the overhead variance
overapplied or underapplied? Prepare the journal entry necessary to reconcile overhead. Assume the variance is
immaterial.
Overhead Control
$1,451
Finished Goods
$24,620
$24,620
Finished Goods
$24,620
Sales
$39,392
131. There are two major types of companies, those that use a job-order costing system and those that use
process-costing systems.
A) Explain the differences between the two types of systems.
B) List 3 examples of each type of company.
132. Consider two costing systems, normal costing and actual costing.
A) Which costing system do most firms use to assign costs to units of product or service? What does this
costing system include?
B) What is the other costing system? What does this costing system include?