CHAPTER 17 Job Order Costing
Prob. 17–2A (FIN MAN); Prob. 2–1A (MAN)
1. a. Materials 29,800
Accounts Payable
b. Work in Process 49,780
Factory Overhead 5,180
Materials
Computation of cost of jobs finished:
Direct Direct Factory
Job Materials Labor Overhead Total
No. 301…
…
$2,960 $2,775 $1,350 $ 7,085
No. 302…
…
3,620 3,750 1,944 9,314
…
…
g. Accounts Receivable 34,450
Sales
29,800
27,010
34,450
CHAPTER 17 Job Order Costing
Prob. 17–2A (FIN MAN); Prob. 2–2A (MAN) (Concluded)
2.
3. Schedule of unfinished jobs:
Direct Factory
Job Labor Overhead
No. 304…………………………… $6,860 $3,888
4. Schedule of completed jobs:
Direct Factory
Direct
Work in Process Finished Goods
Direct
TotalMaterials
$8,100
$18,848
CHAPTER 17 Job Order Costing
Prob. 17–3A (FIN MAN); Prob. 2–3A (MAN)
1. and 2.
Jackson Consulting Date October 1, 2016
Date wanted October 10, 2016
Date completed October 10, 2016
Job. No.
Amount Amount Amount
Mat. Time
Req. Descrip- Ticket Descrip-
No. tion Amount No. tion Amount Item Amount
112 140 meters H10 10 hours
at $35 4,900 at $20 200 Direct materials 7,280
Direct labor 400
JOB ORDER COST SHEET
Customer
ESTIMATE
Direct Materials Direct Labor Summary
ACTUAL
Direct Materials Direct Labor Summary
CHAPTER 17 Job Order Costing
Prob. 17–4A (FIN MAN); Prob. 2–4A (MAN)
1. Supporting calculations:
June 1 Cost of
Work in Direct Direct Factory Total Unit Units Goods
Quantity Process Materials Labor Overhead Cost Cost Sold Sold
No. 201 550 $16,500 $ 55,000 $ 41,250 $ 57,750 $ 170,500 $310.00 440 $136,400
No. 202 1,100 44,000 93,500 71,500 100,100 309,100 281.00 880 247,280
($330,000 – $264,450)
Job. No.
CHAPTER 17 Job Order Costing
Prob. 17–4A (FIN MAN); Prob. 2–4A (MAN) (Concluded)
2. June 30 balances:
Materials……………………
…
$ 17,000 ($82,500 + $330,000 – $395,500)
Work in Process*…………
…
$143,060 ($91,300 + $51,760, Job 203 & Job 206)
Finished Goods**…………
…
$151,750 ($903,620 – $751,870)
CHAPTER 17 Job Order Costing
Prob. 17–5A (FIN MAN); Prob. 2–5A (MAN)
1.
Sales $17,920,000
Cost of goods sold 10,864,000
Supporting calculations:
Sales: 1,120,000 units × $16 = $17,920,000
Cost of goods sold: 1,120,000 units × $9.70 = $10,864,000
Manufacturing cost per unit (Knife):
Direct materials:
Hardened Steel Blanks……………………………
…
$4.00
2. Finished Goods balance, December 31, 2016:
(1,200,000 units – 1,120,000 units) × $9.70 = $776,000
GINOCERA INC.
Income Statement
For the Year Ended December 31, 2016
CHAPTER 17 Job Order Costing
Prob. 17–1B (FIN MAN); Prob. 2–1B (MAN)
a. Materials 770,000
Accounts Payable 770,000
b. Work in Process 604,200
Factory Overhead 75,800
Materials 680,000
c. Work in Process 574,000
Factory Overhead 182,000
f. Factory Overhead 49,500
Depreciation Expense—Office Equipment 61,800
Depreciation Expense—Office Building 14,900
Accumulated Depreciation—Buildings and Equipment 126,200
CHAPTER 17 Job Order Costing
Prob. 17–2B (FIN MAN); Prob. 2–2B (MAN)
1. a. Materials 147,000
Accounts Payable
b. Work in Process 262,490
Factory Overhead 29,160
Materials
Wages Payable
Computation of cost of jobs finished:
Direct Direct Factory
Job Materials Labor Overhead Total
No. 101…
…
$19,320 $19,500 $6,160 $ 44,980
No. 102…
…
23,100 28,140 6,400 57,640
…
…
g. Accounts Receivable 189,100
Sales*
*$62,900 + $80,700 + $45,500
147,000
152,540
189,100
139,110
CHAPTER 17 Job Order Costing
Prob. 17–2B (FIN MAN); Prob. 2–2B (MAN) (Concluded)
2.
3. Schedule of unfinished jobs:
Direct Factory
Job Materials Labor Overhead
No. 104……………………
…
$36,500 $9,520
…
4. Schedule of completed jobs:
Direct Factory
Job Labor Overhead
$ 84,220
Work in Process Finished Goods
Direct
TotalMaterials
$38,200
Direct
Materials Total
CHAPTER 17 Job Order Costing
Prob. 17–3B (FIN MAN); Prob. 2–3B (MAN)
1. and 2.
Lunden Consulting Date May 9, 2016
Date wanted May 15, 2016
Date completed May 15, 2016
Job. No.
Amount Amount Amount
400 meters at $32 12,800 30 hours at $20 600 Direct materials 12,800
Mat. Time
Req. Descrip- Ticket Descrip-
No. tion Amount No. tion Amount Item Amount
132 360 meters H9 18 hours
at $32 11,520 at $19 342 Direct materials 13,120
Direct labor 684
JOB ORDER COST SHEET
Customer
ESTIMATE
Direct Materials Direct Labor Summary
ACTUAL
Direct Materials Direct Labor Summary
CHAPTER 17 Job Order Costing
Prob. 17–4B (FIN MAN); Prob. 2–4B (MAN)
1. Supporting calculations:
May 1 Cost of
Work in Direct Direct Factory Total Unit Units Goods
Quantity Process Materials Labor Overhead Cost Cost Sold Sold
No. 101 330 $26,400 $ 82,500 $ 59,400 $ 29,700 $ 198,000 $600.00 264 $158,400
No. 102 380 46,000 105,400 72,600 36,300 260,300 $685.00 360 246,600
No. 103 500 132,000 110,000 55,000 297,000 00
A. $586,100. Materials applied to production in May + indirect materials.
($570,700 + $15,400)
B. $72,400. From table above and problem.
C. $570,700. From table above.
Job. No.
CHAPTER 17 Job Order Costing
Prob. 17–4B (FIN MAN); Prob. 2–4B (MAN) (Concluded)
2. May 31 balances:
Materials……………………
…
$ 19,500 ($105,600 + $500,000 – $586,100)
Work in Process*…………
…
$409,200 ($297,000 + $112,200, Job 103 & Job 106)
Finished Goods**…………
…
$101,216 ($801,500 – $700,284)
CHAPTER 17 Job Order Costing
Prob. 17–5B (FIN MAN); Prob. 2–5B (MAN)
1.
Sales $18,400,000
Cost of goods sold 11,914,000
Gross profit $ 6,486,000
Selling expenses:
Supporting calculations:
Sales: 460,000 units × $40 = $18,400,000
Cost of goods sold: 460,000 units × $25.90 = $11,914,000
Manufacturing cost per unit:
Direct materials:
Leather………………………………………………
…
$10.00
V
elvet (for interior)…………………………………
…
5.00
2. Finished Goods balance, December 31, 2016:
(500,000 units – 460,000 units) × $25.90 = $1,036,000
TECHNOLOGY ACCESSORIES INC.
Income Statement
For the Year Ended December 31, 2016
CHAPTER 17 Job Order Costing
CP 17–1 (FIN MAN); CP 2–1 (MAN)
Two or three trends seem apparent. Starting with the most obvious:
a. There appears to be a strong “Friday effect.” The unit cost on Friday increases
dramatically, then falls on Monday. Apparently, the workforce is preparing early
for the weekend.
b. There also appears to be a general increasing trend in the unit cost. Every
Friday effect is larger than the previous Friday. Much the same can be said
A number of further pieces of information should be requested.
a. First, it would be good to verify these trends with some other products. This
trend is probably not product-related but related generally to the day of the
week. This would mean that the trend should be apparent in the other products.
b. The data should be sorted by shift and by employee. It’s possible that the effect
is stronger on one shift than on another or that just a few employees are
responsible for the effect. It may not be prevalent in the general population of
workers.
CASES & PROJECTS
CHAPTER 17 Job Order Costing
CP 17–2 (FIN MAN); CP 2–2 (MAN)
1. The unit costs are influenced by both the price and quantity of inputs. On the
price side, the cost of steel has dropped from $1,200 to $1,100 per ton. This is
apparently the result of the purchasing manager’s decision to reduce the cost
of raw materials by going to a new vendor. No other input prices change.
Some of the input quantities changed for the worse. Specifically:
2. A possible reason for this deterioration in performance is related to the
purchasing manager’s decision to change vendors in order to secure a lower
price per ton. The new vendor is apparently delivering a lower-quality steel
product to the company. As a result, the foundry operation is having to spend
more time forming the steel parts. Moreover, the increased steel tons per unit
Job 206 Job 228
Input Quantity per Unit
CHAPTER 17 Job Order Costing
CP 17–3 (FIN MAN); CP 2–3 (MAN)
1. The engineer is concerned that direct labor is not related to overhead
consumption because direct labor is a small part of the cost structure.
Apparently, the company has replaced labor with expensive machine
2. Because each direct labor hour now has $1,500 of factory overhead, small
mistakes in the direct labor time estimates can have a large impact on the
estimated cost of a product. This is very critical because the company sets selling
3. The engineer’s concern is valid. The company should consider replacing its
CHAPTER 17 Job Order Costing
CP 17–4 (FIN MAN); CP 2–4 (MAN)
1. Todd should record the debits for factory wages as a debit to Work in Process.
The factory wages are product costs that must be accumulated in the cost of
producing the product. Eventually, these wage costs will become part of the
finished goods inventory and the cost of goods sold when the gift items are sold.
2. Jeff would not be concerned about immediately expensing administrative wages
CHAPTER 17 Job Order Costing
CP 17–5 (FIN MAN); CP 2–5 (MAN)
1. Direct labor cost:
Total actual (applied) overhead, 2012–2016…… $ 4,200,000
CHAPTER 17 Job Order Costing
CP 17–5 (FIN MAN); CP 2–5 (MAN) (Continued)
2.
Direct Labor Machine Direct Labor Machine Direct Labor Machine
Cost Hours Cost Hours Cost Hours
Actual overhead $790,000 $790,000 $870,000 $870,000 $935,000 $935,000
Applied overhead 777,000 781,200 882,000 873,600 924,000 932,400
(Over-) underapplied
2016 2015
2014
CHAPTER 17 Job Order Costing
CP 17–5 (FIN MAN); CP 2–5 (MAN) (Concluded)
3. The best predetermined overhead rate is machine hours. Although the total
overhead applied for each rate developed in part (1) is the same over the entire
five-year period (as a result of the method by which the predetermined overhead