1. a. Job order cost system and process cost system.
2. Job order costing is used by firms that sell custom goods and services to customers. The job
5. A job cost sheet is the subsidiary ledger to the work in process control account. The cost of
7. The predetermined overhead rate is computed using estimated amounts at the beginning of the
p
eriod. This is because managers need timely information on the product costs of each job. If
8. a. The predetermined factory overhead rate is determined by dividing the estimated total factory
9. a. (1) If the amount of factory overhead applied is greater than the actual factory overhead
incurred, factory overhead is overapplied.
CHAPTER 19
JOB ORDER COSTING
DISCUSSION QUESTIONS
19-1
p
CHAPTER 19 Job Order Costing
DISCUSSION QUESTIONS (Continued)
10. Job order cost accumulation would be most appropriate for professional service firms that
p
rovide extended, project-type services for clients. Examples would be architectural,
19-2
CHAPTER 19 Job Order Costing
PE 19–1A
8 Materials 576,000
Accounts Payable 576,000
PE 19–1B
4 Materials 168,000
Accounts Payable 168,000
PE 19–2A
Work in Process* 837,000
PE 19–2B
Work in Process* 186,200
Aug.
PRACTICE EXERCISES
Feb.
PE 19–3A
Factory Overhead 186,000
PE 19–3B
Factory Overhead 66,600
PE 19–4A
PE 19–4B
19-4
CHAPTER 19 Job Order Costing
PE 19–5A
a. Job 60 Job 61
PE 19–5B
a. Job 40 Job 42
PE 19–6A
PE 19–6B
19-5
CHAPTER 19 Job Order Costing
Ex. 19–1
Ex. 19–2
a. Cost of goods sold:
b. Direct materials cost:
Materials purchased………………………………………………
…
$1,530,000
c. Direct labor cost:
EXERCISES
19-6
CHAPTER 19 Job Order Costing
Ex. 19–3
a.
Materials
Receiving Requi-
Report Unit sition Unit
Number Quantity Price Number Quantity Amount Quantity Price Amount
July 1 300 $18.00 $5,400
*July 6 issuance $5,400
Ex. 19–4
BALANCE
Date
300 at $18.00
RECEIVED ISSUED
19-7
CHAPTER 19 Job Order Costing
Ex. 19–5
a. Materials* 1,471,540
b. Work in Process 1,463,750
c. Polyester
Fabric Filling Lumber Glue
Balance, May 1………………………
…
$ 56,000 $ 16,800 $ 125,300 $ 5,460
Ex. 19–6
19-8
CHAPTER 19 Job Order Costing
Ex. 19–7
a. Work in Process 3,815
Supporting Calculations:
Direct
Labor
Hourly Job Job Job (sum of Indirect
Rate 501 502 503 job costs) Labor
Ex. 19–8
a. Work in Process 22,600
Labor Costs (Hourly Rate × Hours)
19-9
CHAPTER 19 Job Order Costing
Ex. 19–9
c. Factory 1:
Factory 2:
Ex. 19–10
The estimated shop overhead is determined as follows:
Shop and repair equipment depreciation……………………………………………
…
$ 53,500
19-10
CHAPTER 19 Job Order Costing
Ex. 19–11
a. Estimated annual operating room overhead: $873,600
Estimated operating room activity base, number of operating room hours:
b. Wayne Lawrence’s procedure:
Number of surgical room hours…………………………………
…
4
19-11
…
…
CHAPTER 19 Job Order Costing
Ex. 19–12
a. Finished Goods* 753,000
Ex. 19–13
a. Work in Process 25,990
Predetermined overhead rate:
d. Finished Goods* 22,580
19-12
CHAPTER 19 Job Order Costing
Ex. 19–14
a.
Revenues $1,125,000
b. Materials inventory:
Purchased materials…………………………………………………………… $320,000
Work in process inventory:
Materials used in production…………………………………………………
…
$275,000
…
KIRCHHOFF INC.
Income Statement
For the Month Ended April 30, 2014
19-13
CHAPTER 19 Job Order Costing
Ex. 19–15
a. Unit
Date Job. No. Quantity Product Amount Cost
Jan. 2 1 520 TT $16,120 $31.00
Unit Costs for TT
20
30
40
6
8
10
6
8
10
Unit Cost
19-14
CHAPTER 19 Job Order Costing
Ex. 19–15 (Concluded)
As can be seen, the unit costs behave differently for each product. SLK has
19-15
CHAPTER 19 Job Order Costing
Ex. 19–16
a. The first item to note is that the cost did not go up due to any increases in the
cost of labor or materials. Rather, the cost of the plaques increased because
Difference 0 units
Brass plates:
Actual units used 40 units
Expected units needed to produce 40 plaques 40 units
Difference 0 units
19-16
CHAPTER 19 Job Order Costing
Ex. 19–16 (Concluded)
Job 105:
Materials
Actual labor hours used 17 hours
Expected labor hours to produce 30 plaques 15 hours
(30 units × 30 min. per unit)/60 min. per hour
Difference 2 hours
Assembly:
b. Apparently, the engraving and assembly work is becoming sloppy. Job 105
required 34 engraved brass plates in order to get 30 with acceptable quality. It
is likely that the engraver is not being careful in correctly spelling the names.
reassembled to new backboards.
19-17
CHAPTER 19 Job Order Costing
Ex. 19–17
a. May 2 Work in Process (200 hrs. × $140) 28,000
Salaries Payable 28,000
31 Office Overhead 6,000
Supplies 6,000
31 Salaries Payable 38,640
Cash 38,640
b. Office overhead incurred ($26,000 + $6,000)………………
…
$32,000
Note to Instructors: The consultant fees and travel costs can be directly
assigned to the case and thus are not treated as office overhead. Costs such
19-18
CHAPTER 19 Job Order Costing
Ex. 19–18
a. Work in Process 711,000
Salaries Payable
Cost of completed jobs, $1,927,550:
Starks Finley
Bank Airlines
June 1 balance…………………………………………………
…
$ 180,000 $ 54,000
711,000
19-19
CHAPTER 19 Job Order Costing
Prob. 19–1A
a. Materials 528,000
Accounts Payable 528,000
b. Work in Process 403,200
e. Factory Overhead 24,360
Selling Expenses 20,600
Administrative Expenses 14,900
Prepaid Expenses 59,860
PROBLEMS
19-20