Assignment – 3 (Job order costing Solutions) Tauseef Ahmed Qureshi

Problem No 1

Debit Credit(a) Materials

Accounts payable$22,000

$22,000(b) WIP -621

WIP-622WIP-623MOH Materials

5,3007,4005,9002,400

21,000(c) Material

WIP -622 MOH

600400200

(d) Accounts payable Material

800800

(e) Payroll Cash

38,000 38,000

(f) WIP -621WIP-622WIP-623MOHAdmin expMark exp Payroll(DL 55% of payroll, IDL 20% of payroll, admin 15% of payroll)

6420 8160 6320

7,6003,8005,700

38,000

(g) MOH Accounts payable Accumulated depreciation – Build Prepaid Insurance

5,5003,2502,000

250

(h) WIP -621 (6,420 × 0.8)WIP-622 (8,160 × 0.8)WIP-623 (6,320 × 0.8) MOH

5,136 6,528 5,056

16,672

(i) FG WIP – 621 WIP – 622621= 6580+5300+6420+5136 = 23,436622 = 8360+7,400-400+8160+6258= 29,948

53,38423,43629,948

(j) Accounts receivable SalesCost of goods sold Finished goodsX- 53,384 = 0.4 × 53,384X = $74,737.60

74,737.60

53,38474,737.60

53,384

(k) Cash Accounts receivable

69,45069,450

2. Schedule of inventories:

Materials: 14,000+22,000-21,000+600-800 = $14,800 FG: 15,000+53,384-53,384= $15,000 WIP – 621 = 0 WIP – 622 = 0 WIP – 623 = 4,230+5,900+6,320+5,056 = $21,506

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Problem No 2

Material: 60,000+200,000-230,000 = $30,000WIP- Mat: 30,000+230,000-248,000 = $12,000WIP-Labor: 36,000+180,000-196,000= $20,000WIP-MOH = 27,000+135,000(75% of DL i.e 180,000)-147,000=15,000FG= 50,000+248,000+196,000+147,000-594,000=47,000CGS = $594,000

Problem No 3

Debit Credit(a) Materials

Accounts payable$410,000

$410,000(b) WIP

MOH Materials

360,00020,000

380,000(c) WIP

MOHSales ExpenseAdmin Expense Wages payable

75,000110,00090,000

200,000475,000

(d) Sales expense A/P

17,00017,000

(e) MOH A/P

43,00043,000

(f) Advertising expense A/P

180,000 180,000

(g) MOHDepreciation expense Accumulated depreciation

280,00070,000

350,000

(h) MOHInsurance expense Prepaid insurance

7,000 3,000

10,000

(i) WIP MOH applied WIP – 622Rate 450,000÷75,000 = $680,000 machine hours×$6 = 480,000

480,000480,00029,948

(j) FG WIP

900,000900,000

(k) A/R SalesCGS FG

1,500,000

870,0001,500,000

870,000(l) MOH allocated

MOH CGS

480,000460,00020,000

2. Schedule of inventories:

Materials: 20,000+410,000-380,000 = $50,000 FG: 30,000+900,000-870,000= $60,000 WIP = 15,000+360,000+75,000+480,000-900,000 = $30,000

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Problem No 4

Debit Credit1. Materials

Accounts payable$95,000

$95,0002. WIP

MOH Materials

76,0004,000

80,0003 WIP

Wages payable 90,000

90,000

4 MOH Wages payable

15,00015,000

5 MOH Cash Acc. depreciation

85,00040,00045,000

6 WIP MOH

108,000 108,000

7 FG WIP

225,000225,000

8 CGS FGA/R Sales

200,000

260,000200,000

260,000

WIP = 8,000+75,000+90,000+108,000-225,000 = $57,000MOH 4,000+15,000+85,000 = 104,000MOH applied 108,000 Over applied $ 4,000

Problem No 5

1. Actual Machine hours = 67,500+4,500+18,000= 90,000 MOH allocated = 90,000×$60 = $5,400,000 Rate = $600,000÷100,000=$60 per mach hour

MOH actual = $6,200,000 Under applied overhead = 6,200,000 – 5,400,000 = $800,000 (Machining Department)

Actual Labor hours = 90,000+4,800+25,200= 120,000 MOH allocated = 120,000×$40 = $4,800,000 Rate = $500,000÷125,000=$40 per labor hour

MOH actual = $4,700,000 Over applied overhead = 4,800,000 – 4,700,000 = $100,000 (Assembly Department)

2. (a) CGS = $16,000,000 + 800,000 – 100,000 = $16,700,000(b) Proration based on Ending balances (before proration) in WIP,FG, and GS

Account balance(before proration)

Proration of $800,000

Proration of $100,000

Account balance (after proration)

Work in process

3,250,000÷20,000,000 = 0.1625

800,000×0.1625 = $130,000

100,000×0.1625 = $16,250

3,250,000+130,000 -16,250=$3,363,750

Finished Goods

750,000÷20,000,000= =0.0375

800,000×0.0375 = $30,000

100,000×0.0375 = $3,750

750,000+30,000 -3,750 =$776,250

Cost of Goods sold

16,000,000÷20,000,000 = 0.80

800,000×0.80 = $640,000

100,000×0.80 = $80,000

16,000,000+640,000 -80,000= $16,560,000

Total $20,000,000 $800,000 $100,000 $2,070,000

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(c) Proration based on overhead allocated (before proration) in the ending balances of CGS, FG and WIP in each department.

Machining Department

Problem No 6

1. Department 1 Department 2Budgeted overhead $150,000 $300,000Budgeted activity: DLH 50,000 100,000 M.Hrs 30,000 50,000

DL wage rates $20 DLH $30 DLH

OH rate $150,000÷30,000 = $5 MH $300,000÷100,000 = $ 3 DLH

Job 94-669 Direct material $350,000 Direct labor hours – Dept 1 1000 Direct labor hours – Dept 2 2000

Machine hours – Dept 1 5000 Machine hours – Dept 2 2000

Job 94-669 = ($5×5000 MHrs) + ($3×2000 DLhrs) = $31,000

2. Dept 1 - overhead applied = $5 × 35,000 machine hours = $175,000 Dept 2- overhead applied = $3 × 98,000 direct labor hours = $294,000

Actual overhead ($150,000+ $300,000) $450,000Applied over head (175,000+ 294,000) 469,000

Over applied $19,000

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Problem No 7

A. FOH-actual Shop Supplies $3,300 Indirect labor 1,680 (140×$12) Depreciation 5,200 Other 9,150 19,330 FOH – applied (1890×$10.50) 19,845 Over applied $515

Applied DL hours = 410+620+750+110

B. Job 811 = 14,560 + 0 (DL) + 4,920 (410×$12) DL + 4,305 (410×$10.50) FOH applied = $ 23,785

Job 813 = 2,100 + 8,500 + 7,440 (620×$12) DL + 6,510 (620×$10.50) FOH applied = $ 24,550

Job 814 = 0 + 16,500 + 9,000 (750×$12) DL + 7875 (750×$10.50) FOH applied = $ 33,375

C. Job 815 ( in process) = 0 + 12,000+1,320 (110×$12) + 1,115 (110×$10.50) = $14,475

Problem No 8

Debit Credit1. Materials

Accounts payable$115,000

$115,0002. WIP

MOH Materials

90,00010,000

100,0003 WIP

MOH Sales Expense Admin Expense Wages payable Salary payable

352,00018,00030,00045,000

370,00075,000

4 MOH (27,000+14,500+5,000+30,000+16,000) Accounts payable Accumulated depreciation

92,50057,50035,000

5 Adv expenseS&A expense Accounts payable

15,00018,000

33,0006 WIP (44,000×$2.80)

MOH- applied123,200

123,200

7 FG WIP

553,300553,300

8 CGS FGA/R Sales

563,500

788,900563,500

788,900

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B. FOH – actual $120,500 (10,000+18,000+92,500) FOH – applied 123,200 Over applied $2,700

FOH- applied $123,200 FOH $120,500 CGS 2,70

C.

Sales $788,900CGS (563,500-2,700) (560,800) GM 288,100Op. Expenses (108,000) NI $120,100

Operating expenses = 30,000+45,000+15,000+18,000 = $108,000

Problem No 9

A.

Job 66 (30,000+12,000+9,000) +7,000+ 5,250 $63,250Job 67 42,000+20,000+15,000 77,000Job 68 51,000+42,000+31,500 124,500Job 69 27,000+28,000+21,000 76,000Job 70 19,000+10,000+7,500 36,500

B. CGS = 63,250+ 77,000+ 124,500 + 36,500 = $301,250

C. DM used = 42,000+ 51,000 + 27,000 +19,000 = $139,000

D. WIP (end) = $76,000 (Job 69)

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