Chapter 19 – Job Order Costing
Exercise 19-4 (15 minutes)
2.
Direct materials…………………………………………………………….………… $15,350
Exercise 19-5 (20 minutes)
1. Rate = = = 40%
2. Total cost of job in process (given)……………………………………………….$ 50,000
Exercise 19-6 (15 minutes)
1. Raw Materials Inventory…………………….…….…………….76,200
Accounts Payable…………………………………………….. 76,200
To record materials purchases.
4. Work in Process Inventory……………………………….…….18,420
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Education.
Estimated direct labor
$575,000
$600,000
$1,500,000
Overhead costs
Direct material costs
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Chapter 19 – Job Order Costing
Exercise 19-7 (30 minutes)
1. Cost of direct materials used
Beginning raw materials inventory……………………………………………$ 43,000
2. Cost of direct labor used
3. Cost of goods manufactured
Beginning work in process inventory…………………….……….………..$ 10,200
Plus direct materials…………………………………………….……………….… 186,000
Plus direct labor………………………………………………….……………….…. 265,000
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Chapter 19 – Job Order Costing
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Chapter 19 – Job Order Costing
Exercise 19-7 (continued)
4. Cost of goods sold
Beginning finished goods inventory…………………………….…………..$ 63,000
5. Gross profit
6. Actual overhead incurred
Indirect materials……………………………………………………………………..$ 15,000
Indirect labor…………………………………………………………………………...80,000
Exercise 19-8 (10
minutes)
1. Raw Materials Inventory…………………….……….………….210,000
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Chapter 19 – Job Order Costing
2. Work in Process Inventory………………………..……………186,000
3. Factory Overhead…………………………………………..………15,000
Exercise 19-9 (10 minutes)
1. Work in Process Inventory………………………..……………265,000
2. Factory Overhead…………………………………………..………80,000
Factory Payroll Payable……………………………………. 80,000
To record indirect labor used.
3. Factory Payroll Payable………………………………….….…..345,000
Exercise 19-10 (10 minutes)
1. Factory Overhead…………………………………………………..120,000
Other Accounts………………………………………………… 120,000
To record other factory overhead.
direct labor of $265,000
Exercise 19-11 (10 minutes)
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Education.
Chapter 19 – Job Order Costing
$15,000 + $80,000 + $120,000.
Exercise 19-12 (15 minutes)
Factory Overhead…………………………………………………..3,200
Cost of Goods Sold…………………………………..……… 3,200
To close overapplied overhead for Storm.
Cost of Goods Sold………………………………………..………800
Factory Overhead…………………………………………….. 800
To close underapplied overhead for Valle.
Exercise 19-13 (25 minutes)
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Chapter 19 – Job Order Costing
b. Work in Process Inventory……………………………….…….36,500
Raw Materials Inventory………………..…….…………… 36,500
To assign costs of direct materials used.
d. Factory Overhead…………………………………………..………11,475
Cash……………………………………………………………..…. 11,475
To record other factory overhead paid.
e. Work in Process Inventory……………………………….…….47,500
Factory Overhead…………………………………………….. 47,500
To apply overhead to jobs at the rate of 125% of
direct labor cost.
Exercise 19-14 (35 minutes)
1. Predetermined overhead rate
Estimated overhead costs……………………………….……….……………$750,000
2. & 3.
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Chapter 19 – Job Order Costing
Factory Overhead
4.
Dec. 31 Cost of Goods Sold………………………………………..………8,000
Factory Overhead…………………………………………….. 8,000
To close underapplied overhead.
Exercise 19-15 (25 minutes)
1. Predetermined overhead rate
2. & 3.
Overhead
Incurred……..……………..1,652,000 Applied*………………………………………………………..1,662,500
4.
Dec. 31 Factory Overhead…………………………………………..………10,500
Cost of Goods Sold…………………………………..……… 10,500
To close overapplied overhead.
Exercise 19-16 (30 minutes)
2.
Total cost of work in process inventory…………………………... $ 71,000
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Chapter 19 – Job Order Costing
3.
Total cost of finished goods inventory….………………….…….. $490,000
Deduct: Direct materials…………………………………….………….. (250,000)
Direct labor and factory overhead costs..……….…………....... $240,000
Exercise 19-17 (20 minutes)
1.
a. Work in Process Inventory……………………………….…….9,500
Raw Materials Inventory………………..…….…………… 9,500
To record direct materials used.
b. Work in Process Inventory……………………………….…….8,000
Factory Payroll Payable……………………………..…….. 8,000
To record direct labor used.
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2. The balance in Work in Process Inventory at the end of July ($6,280)
equals the total cost reported on the job cost sheet for Job 122, the
only job still in process at the end of the month. The balance in
1. Estimated cost of the architectural job
Labor type
Estimated
hours Hourly rate Total cost
Architects……………………………………150 $300 $ 45,000
Staff..…..….………………………………….300 75 22,500
Clerical….…..……………………………….500 20 10,000
2. Frey should first determine an estimated selling price, based on its cost
and desired profit for this job.
Total estimated cost……………………………………………….………. $213,125
This $293,125 price may or may not be its bid. It must consider past
experiences and competition. It might make the bid at the low end of
what it believes the competition will bid. By bidding at about $285,000,
the profit on the job will only be $71,875 ($285,000 – $213,125). While
this may allow Frey to get the job, it must consider several other factors.
Among them:
a. How accurate are its estimates of costs? If costs are understated,
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Education.
Chapter 19 – Job Order Costing
There is no exact answer to these questions, but Frey must consider
these and other factors before it submits the bid.
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