Exercises Chapter 3

1. Manufacturing Costs
1 FOH Rate to Direct Labour

Direct Labour=
FOH =
FOH Rate=

800000
640000
80%

2 Work in Process Ending =

Less Direct Labour=

FOH 80% of Labour
Direct Material Cost

140000
50000
40000

90000
50000

2. Manufacturing Costs
Direct Material Cost=
280000
Direct Labour Cost=
320000
FOH Costs
Indirect Labour=
80000
Indirect Material=
20000
Other FOH=
124000
224000
Total Manufacturing Costs=
824000
Coversion Cost=
544000
Rate of Direct Labour =
0.5882353
Closing Finished Goods=
Less Direct Material Cost=
Conversion cost=
Labour Cost=
FOH Cost

3. Manufacturing Costs
Televane Company
Cost of goods Manufactured and Sold Statement
For the Period ended on 31st, December 19b

176000
40000
136000
80000
56000

Description

Amount

Direct Material
Opening Inventory of Raw Material
1
Add Purchases
Cost of Material Available for use
Less: Closing Inventory of Raw Material
Direct Material Used
Direct Labour Cost
Factory over head Cost
Total Manufacturing Cost
Add Opening Work in Process Inventory
Cost of goods to be manufactured
Less: Closing Work in process Inventory
2 Cost of Goods manufactured
Add Opening Finished Goods Inventory
Cost of goods available for sale
Less: Closing Finished Goods Inventory
3 Cost of Goods Sold

$
75
336
411
85
326
225
135
686
80
766
30
736
90
826
110
716

4. Manufacturing Costs
Krieger Company

Material Cost=
Direct Labour Cost=
Factor Over Head =
Molding Department=2.7* 1000=
Decorating Department=
1 Estimated Cost to Produce=
Mark Up=
2 Bid Price=

13000
15000
2700
5250

7950
35950
16177.5
52127.5

3 Estimate Prime Cost=

28000

4 Estimate Coversion Cost=

22950

5. Income Statement
Hansford Inc.
Income Statement
For the Period ended on 30th, September
Description
Amount
$
Sales
Direct Material
Opening Inventory of Raw Material
Add Purchases
Cost of Material Available for use
Less: Closing Inventory of Raw Material
Direct Material Used
Direct Labour Cost
Factory over head Cost
Total Manufacturing Cost
Add Opening Work in Process Inventory
Cost of goods to be manufactured
Less: Closing Work in process Inventory
1 Cost of Goods manufactured
Add Opening Finished Goods Inventory
Cost of goods available for sale
Less: Closing Finished Goods Inventory
Cost of Goods Sold at Normal
Add/Less FOH Variance
Cost of Goods Sold at actual
Gross Profit
Less Operating Expenses
Marketing Expenses
Admn Expenses
Total Expenses
Net Profit

6. Job Order cost Sheet.

Wadsworth Machine Works
Job Order Cost Sheet

$
182000

7000
42300
49300
7400
41900
30000
45000
116900
9600
126500
13000
113500
15000
128500
17500
111000
3200
114200
67800

14100
22900
37000
30800

Direct Material Cost

9/14 Issued
9/20 Issued
9/22 Issued
Total

600
331
200
1131

Direct Labour Cost

week of Sept 20
week of Sept 26
Total

90 Hrs
70 Hrs

Factory Overhead
week of Sept 20
week of Sept 26
Total

90 Hrs
70 Hrs

@$6.20 Hrs
@$7.30 Hrs

558
511
1069

@$5 Hrs
@$5 Hrs

450
350
800

Total Cost of Manufacturing

Mark UP 40%
Sale Price

3000
1200
4200

7. Job Order Costing

Date
a

Description

P.R

Amount
Debit($) Credit($)

Job Cost Sheet

Work in Process Job 36
44000
Job Cost Sheet
Work in Process Job 37
34000
Job Cost Sheet
Work in Process Job 38
32000
Material Control
Store Ledger Card
Direct Material issued to Production
Job Cost Sheet
Work in Process Job 36
Job Cost Sheet
Work in Process Job 37
Job Cost Sheet
Work in Process Job 38
Payroll Control
Pay roll sheet
Payroll distributed to work in process

40000
48000
42000

Work in Process Job 36

Work in Process Job 37

24000
28800

Job Cost Sheet

Job Cost Sheet

110000

130000

Work in Process Job 38

FOH Applied
FOH applied to Production
d

25200

Job Cost Sheet

FOH analysis

Job Cost
Finished Job 36
Job Cost
Finsihed Job 37
Work in Process Job 36
Work in Process Job 37
Job No 36 & 37 Completed

Sheet
Sheet

78000

144000
128800

Job Cost Sheet

Job Cost Sheet

144000
128800

8. Job Order Costing.

Date
a

Description

P.R

Debit($)

Work in Process Job 97

Work in Process Job 98
Work in Process Job 99
Material Control
Direct Material issued to Production

36000
30000
40000

Work in Process Job 97

Work in Process Job 98
Work in Process Job 99
Payroll Control
Payroll distributed to work in process

72000
70000
80000

Work in Process Job 97

Work in Process Job 98
Work in Process Job 99
FOH Applied
FOH applied to Production

36000
35000
40000

Credit($)

106000

222000

111000

Finished Job 97
Finsihed Job 98
Work in Process Job 97
Work in Process Job 98
Job No. 36 & 37 Completed

240000
135000

Cost of Sales Job No. 97

Finished Job 97
Cost of Sale of Job No 97 recorded

240000

240000
135000

240000

Accounts Receivables
Sales
Job No. 97 Sold on account

300000
300000

9. Journal entries for the Cost Accounting cycle: Predetermied Overhead rate
Ledger Accounts
Opening

1 Finished Goods
40000

WIP

CGS

375000

Closing

55000
430000

390000
430000

O/B

O/b
Material
Labour
FOH

3 Material
5000

Applied
90000

95000

Closing

Sundry
CGS

100000

Closing

10000

120000

0
120000

100000

5 Applied FOH

Opening
WIP
520000
520000

400000
120000

O/B
F.Goods

520000

Closing

6 Cost of Goods Sold at Normal

600000
375000 FOH

Closing
975000

O/B
F.Goods

6 Cost of Goods Sold at actual

600000 foh
3000
375000

Closing

Closing
975000

15000
405000

117000
3000 CGS
120000

Closing

390000

4 Factor Over Head Control

WIP
Purchases

2 Work in Process
35000
90000 F.Goods
160000
120000 Closing
405000

972000
975000

Amount

975000
975000

Date
a

Description

P.R

Debit($)

Work in Process Control

370000
Material Contorl
Payroll Control
FOH Applied
Material Labour & FOH Charged to Production

Credit($)
90000
160000
120000

Finished Goods
390000
Work in Process Control
390000
Work in Process Completed and transferred to Finished goods

Cost of Goods Sold

Finished Goods
Cost of Goods Sold Recorded

FOH Applied
Cost of Goods Sold
Under applied FOH Recorded
Material Control
Voucher Payable

375000
375000

3000
3000

95000
95000

Problems Chapter 3
3.1 Manufacturing Costs
Hulse Company
Cost of Goods Sold Statement
For the Period ended on 31st, December
Description
$
Direct Material
Opening Inventory of Raw Material
Add Purchases
Cost of Material Available for use
Less: Closing Inventory of Raw Material
Direct Material Used
Direct Labour Cost
Grinding Department 8000*5.6
Machining Department 4600*6
Factory over head Cost
Grinding Department 8000*6
Machining Department 4600*8
1 Total Manufacturing Cost
Add Opening Work in Process Inventory
Cost of goods to be manufactured
Less: Closing Work in process Inventory
2 Cost of Goods manufactured
Add Opening Finished Goods Inventory
Cost of goods available for sale
Less: Closing Finished Goods Inventory
3 Cost of Goods Sold
4 Coversion Cost

Amount
$

20000
58000
78000
18000
60000
44800
27600
48000
36800

72400

84800
217200
15000
232200
17600
214600
22000
236600
17000
219600

157200

5 Cost of Material Purchased

58000

3.1

Ledger Accounts
1 Material Control
O/B
20000 WIP

60000

O/b

4 Work in process
15000

Purchases

FOH app
Payroll
material

58000

Closing
78000

18000

84800 F Goods
72400
60000 Closing
232200

214600
17600
232200

78000

Opening
2 Accrued Payroll
72400 WIP G.Dept

5 Finished Goods
22000

CGS

V/Payable

WIP

44800
27600

WIP M.Dept

Closing
236600

72400

(5)

219600

214600
17000
236600

72400

3 FOH Applied
FOH Control
84800 WIP G.Dept

48000
36800

WIP M.Dept

84800

6 Cost of Goods Sold

F.Goods
219600

84800

219600

3 FOH Controal

FOH App

84800

84800

1 Total Cost of Work put into process

84800
Material
72400
Labour
60000
FOH

Total Manufacturing cost

2 Add Opeing WIP

Goods to be Manufactured
Less Closing WIP
Cost of Goods Mfgd
3 add opeing F. goods
Cost of Goods to be sold
Less Closing F.goods
Cost of Goods Sold
4 Conversion Cost

Direct MaterIal

72400

217200
15000
232200
17600
214600
22000
236600
17000
219600

Applied FOH

60000
132400

O/B
Purchases

Material Control
20000 WIP

60000

58000

Closing
78000

18000
78000

3.2 Manufacturing Costs

Ledger Accounts
Opening

1 Finished Goods
70000

CGS
WIP

(5)

230000

220000

Closing
290000

60000
290000

O/b
2 FOH app
Payroll
1 material

2 Work in process
50000
75000 F Goods
100000
35000 Closing*
260000

220000 (4)
40000 (3)
260000

Closing WIP= 5000+15000+20000

O/B
a

3 Material Control
10000 WIP
50000

Closing

35000

4 Cost of Goods Sold

230000
5000

F.Goods
FOH Cont

C/B

25000
235000

60000

Payed

5 Accrued Payroll
140000 Opening

Direct Lab
20000 Ind Lab

Closing

160000

60000

10000
100000
50000
150000

6 FOH Controal
10000 FOH App
50000
20000 CGS

Acc Dep
Payroll
Sundry acc

80000
7 FOH Applied
75000 WIP

75000
5000
80000

8 Accounts Payables

O/B
FOH Cont

235000
235000

75000

Cash

55000 Purchases

20000
50000

Closing
75000

75000

15000
70000

70000

Problem 3-3
1)

Cost of goods sold section

Columbus Company
Cost of Goods Sold Statement
For the Period ended on 31st October
Description
Amount
$
Direct Material
Opening Inventory of Raw Material
Add Purchases
Cost of Material Available for use
Less: Closing Inventory of Raw Material
Direct Material Used
Direct Labour Cost
Factory over head Cost
Total Manufacturing Cost
Add Opening Work in Process Inventory
Cost of goods to be manufactured
Less: Closing Work in process Inventory
1 Cost of Goods manufactured
Add Opening Finished Goods Inventory
Cost of goods available for sale
Less: Closing Finished Goods Inventory
Cost of Goods Sold at Normal

40700
24800
65500
35700
29800
18600
27450
75850
4070
79920
4440
75480 75180/20400
9800
85280
9250 (2800+20400-20700)
76030

2. Income Statement for October

Columbus
Income Statement
For the Period ended on 31st October
Description
Amount
$
$
Sales
144900
Less returns
1300

3.7

2500

Net Sales
Cost of Goods Sold at Normal
Gross Profit
Less Operating Expenses
Marketing Expenses
Paid
Dep Building
Dep Equipment
Admn Expenses
Paid
Dep Building
Dep Equipment
Total Expenses
Net Profit

143600
76030
67570

25050
360
192

25602

19700
240
288

20228
45830
21740

3 Over /Under Applied FOH

FOH Control Account

V/P
Material Control
Dep on Building
Dep on M & Equip
Indirect Laobur

20100 FOH Applied

3950
1800
9600 CGS
4400

27450

39850

39850

12400

Problem 3-4
Morrisville Canning
Income Statement
For the Period ended on 31st, December 19 A
Description
Amount
$
Sales
Direct Material
Opening Inventory of Raw Material
Add Purchases

$
4000
15000

$
60000

Cost of Material Available for use

Less: Closing Inventory of Raw Material
Direct Material Used
Direct Labour Cost
Factory over head Cost
Total Manufacturing Cost
Add Opening Work in Process Inventory
Cost of goods to be manufactured
Less: Closing Work in process Inventory
1 Cost of Goods manufactured
Add Opening Finished Goods Inventory
Cost of goods available for sale
Less: Closing Finished Goods Inventory
Cost of Goods Sold at Normal
Add/Less FOH Variance
Cost of Goods Sold at actual
Gross Profit
Less Operating Expenses
Marketing Expenses
Admn Expenses
Total Expenses
Net Profit

19000
2000
17000
9000
9000
35000
2000
37000
1000
36000
6000
42000
4000
38000
2000
40000
20000

6000
9000
15000
5000

Cash Account
O/B
Sales

5000 Material
60000 Labour

FOH
(9000+2000-3000)
Admn Exp
Marketing Exp
C/B
65000

Assets
Cash

15000
9000
8000
6000
8000
19000
46000

Morrisville Canning Company

Balance Sheet
As on 31st December, 19A
$
Liabilities & Equities
19000 Current Liabilites

$
17500

Accounts Receivables
Finished Goods
Work in Process
Materials
Prepaid expenses
Property Plant etc
Less Depreciation

10000 Common Stock

4000 Retained Earnings
1000 Profit
2000
500
30000
4000

30000
10000
5000

26000
62500

62500

Problem 5
Date
a
b

c
d
e

f
g

Description

P.R

Debit($)

Material Control
Voucher Payable

6000

WIP Job 2001

WIP Job 2002
Material Control

2500
1400

WIP Job 2003

Material Control

1800

FOH Control
Material Control

1700

3900

1800

1700
500

Voucher Payble
Material Control

600

Accrued Payroll
Voucher Payable
Voucher Payable
Bank

Credit($)
6000

Material Control
WIP Job 2001
FOH Control

Pay Roll Control

FICA taxes Payable
Fedral Income tax Payable
Accrued Payroll

15000

400
100

600
10000
750
1050
8200
8200
8200
8200
8200

i
60%
20%
12%
8%

WIP Job 2001

50%
WIP Job 2002
30%
WIP Job 2003
20%
FOH Control
Sales Exp Control
Admn Exp Control
Payroll Control

80% FOH Control

12% Sales Exp Control
8% Admn Exp Control
7.5% FICA Tax payable
3.4% State Unemp Tax payble
0.8% Fed. Unemp Tax payble

3000
1800
1200
2000
1200
800
10000

(8000/10000)*1170
(1200/10000)*1170
(800/10000)*1170

936
140.4
93.6
750
340
80

1170

FOH Control
Voucher Payable
Voucerh Payable
Bank

1504

WIP Job 2001

WIP Job 2002
WIP Job 2003
FOH Applied
FOH Applied
FOH Control

3000
1800
1200

1504
1504
1504

6000
6000
6000

WIP Job 2001

O/B
Material Control
Payroll Control
FOH Applied

10000 Material Control

2500 Finished Goods
3000
3000

400
18100

18500

18500

Cost of Goods Sold

WIP Job 2001

18100

Accounts Receivable
Sales

22500

18100

22500

Cost of Goods Sold

Finished Goods

8000
8000

Accounts Receivable
Sales

10000

Cash

26000

10000

Accounts Recivable

26000

FOH Controll Acoount

m
1700 mat
p
2000 foh app
payroll tax
936 cgs
vp
1504

100
6000
40

6140

6140

Cost of Goods Sold

Foh Control

40
40

Requirement:
1 Journal Entries as above with WIP Job Nos as subsidiary Accounts
2 Prepare Individual JOB WIP Account they should be equal to WIP Control Account.

b
c
i
l

WIP Control Account

OB
16400 e
Material
3900
Material
1800
Payroll
6000
Foh app
6000

Material

c/b

34100

WIP Job # 2001

OB
10000 e
Material
2500

i
l

Payroll
Foh app

3000
3000
18500

400

33700
33700

Material

c/b

400

18100
18100

WIP Job # 2002

OB
6400
Material
1400

i
l

Payroll
Foh app

1800
1800

c/b

11400

WIP Job # 2003

OB
c
i
l

Material
Payroll
Foh app

0 e
1800
1200
1200
4200

WIP Job # 2001

WIP Job # 2002
WIP Job # 2003
WIP Control Account

11400
11400

Material

c/b

100

4100
4100

18100
11400
4100
33600

Problem 6
Job Order cost Sheet.
Topper Inc.
Job Order Cost Sheet
Job NO 621
Direct Material Cost
1-Mar O/B
Issued
Issued
Total
Direct Labour Cost
1-Mar O/B
Total

2800

2800

2100
2100

Factory Overhead
1-Mar O/B

1680

Total

1680

Total Cost of Manufacturing

Mark UP
Sale Price

6580

Topper Inc.
Job Order Cost Sheet
Job NO 622
Direct Material Cost
1-Mar O/B
Issued
Issued
Total
Direct Labour Cost
1-Mar O/B

3400

3400

2700

Total
Factory Overhead
1-Mar O/B

2700

2160

Total

2160

Total Cost of Manufacturing

Mark UP
Sale Price

8260

Topper Inc.
Job Order Cost Sheet
Job NO 623
Direct Material Cost
1-Mar O/B
Issued
Issued
Total
Direct Labour Cost
1-Mar O/B

1800

1800

1350

Total

1350

Factory Overhead
1-Mar O/B

Date
a
b

d
e

1080

Total

1080

Total Cost of Manufacturing

Mark UP
Sale Price

4230

Description

P.R

Debit($)

Material Control
Voucher Payable

22000

WIP Job 621

WIP Job 622
WIP Job 623
FOH Control
Material Control

5300
7400
5900
2400

Credit($)
22000

21000

Material Control
WIP 622
FOH Control

600

Voucher Payble
Material Control

800

400
200

800

Pay Roll Control

7.50% FICA taxes Payable
11.50% Fedral Income tax Payable
81% Accrued Payroll

38000

Accrued Payroll
Voucher Payable
Voucher Payable
Bank

30780

2850
4370
30780

30780
8200
8200

WIP Job 621

55% WIP Job 622

WIP Job 623

20% FOH Control
15% Sales Exp Control
10% Admn Exp Control

Payroll Control
g

75% FOH Control

15% Sales Exp Control
10% Admn Exp Control
7.5% FICA Tax payable
5.4% State Unemp Tax payble
8.0% Fed. Unemp Tax payble

0.307177
0.390431
20900 0.302392

6420
8160
6320
7600
5700
3800
38000
5956.50
1191.30
794.20
2850.0
2052.0
3040.0

7942

FOH Control
Voucher Payable
Acc.Dep Factory Building
Prepaid Insurance

WIP Job 2001

WIP Job 2002
WIP Job 2003
80% dlc20900
FOH Applied
FOH Applied
FOH Control

O/B
V. Payable
WIP 622
FOH Control

Material
WIP Job 621
14000 WIP Job 622
22000 WIP Job 623
400 FOH Control
200 V/P
C/B
36600

5500
3250
2000
250
5136
6528
5056
16720
16720
16720

5300
7400
5900
2400
800
14800
36600

Work in Process
O/B
Material Control
Payroll Control

19070 Material Control

18600 Finished Goods
20900

400
53384

FOH Applied

16720

C/B

21506
53784

75290

Finished Goods
O/B
WIP

15000 Cost of Goods Sold

53384

C/B

53384

15000
53384

68384

WIP Job 621

O/B
Material Control
Payroll Control
FOH Applied

6580
5300
6420
5136

Fiinshed Goods
23436

O/B
Material Control
Payroll Control
FOH Applied

23436
23436

WIP Job 622

8260 Material Contrl

400

7400
8160
6528

Fiinshed Goods
30348

29948
30348

WIP Job 623

O/B
Material Control
Payroll Control
FOH Applied

4230
5900
6320
5056

C/B

21506

21506

Finished Goods

21506
53384

WIP Job 621

WIP Job 622
k
l

Accounts Receivable
Sales
Cash

23436
29948
74737.6
74737.6
69450

Accounts Recivable

69450

Job Order cost Sheet.

Topper Inc.
Job Order Cost Sheet
Job NO 621
Direct Material Cost
1-Mar O/B
Current

2800
5300

Total

8100

Direct Labour Cost

1-Mar O/B
Current
Total

2100
6420

Factory Overhead
1-Mar O/B
Current
Total

1680
5136

8520

6816

Total Cost of Manufacturing

Mark UP
Sale Price
Topper Inc.
Job Order Cost Sheet
Job NO 622
Direct Material Cost
1-Mar O/B
Current
Total

23436
9374.4
32810.4

3400
7000
10400

Current

Direct Labour Cost

1-Mar O/B
Current
Total

2700
8160

Factory Overhead
1-Mar O/B
Current
Total

2160
6528

10860

8688

Total Cost of Manufacturing

Mark UP
Sale Price
Topper Inc.
Job Order Cost Sheet
Job NO 623
Direct Material Cost
1-Mar O/B
Current

29948
11979.2
41927.2

1800
5900

Total

7700

Direct Labour Cost

1-Mar O/B
Current
Total

1350
6320

Factory Overhead
1-Mar O/B
Current
Total

1080
5056

7670

6136

Total Cost up to date

Sechdule of Inventories
Materials
Work in Process
Finished Goods

21506

14800
21506
15000

Problem 7
O/B
WIP

Finished Goods
78830 CGS
94501.65 C/B

173331.7

94501.65
78830.00

173331.65

Work in Process
O/B
Payroll Control
Material Control
FOH Applied

292621 Finshed Goods

98884
53730 C/B
30660.15

475895.2

94501.65
381393.50

475895.15

Material
O/B
V/Payable
V/Payable

65000 WIP
42300
5800 C/B

113100

Prepaid Insurance
Taxes Payable
Dep-Machinry
Dep-Building

FOH Control
830 O/B
845 FOH Applied
780
840

53730
59370

113100

12300
30660.15

V/Payalbe
Indirect Supplies
Pay roll control
Employer taxes
C/B

8000
1910
12480
15256.87
2018.28
42960.15

42960.15

WIP Job 204

O/B
Payroll Control
Material Control
FOH Applied

50460 Finished Goods

26844
9480
7717.65

94501.65

94501.65

94501.65

WIP Job205
O/B
Payroll Control
Material Control
FOH Applied

118060
22750
11320
7475 C/B

159605

159605

159605

WIP Job 206

O/B
Payroll Control
Material Control
FOH Applied

124101
28920
10490
8774.5 C/B

172285.5

172285.5

172285.5

WIP Job 207

O/B
Payroll Control
Material Control
FOH Applied

20370
22440
6693 C/B

49503

49503

Date
a
b
c

Description

P.R

Debit($)

Material Control
Voucher Payable

42300

Material Contorl
Voucher Payable

5800

WIP Job 204

WIP Job 205
WIP Job 206
WIP Job 207
FOH Control
Payroll Control

26844
22750
28920
20370
12480

Payroll Contorl
7.50% FICA Tax payable
11.50% Emp Income Tax payable
81% Accrued Payroll

49503

Credit($)
42300

5800

111364
111364
8352.3
12806.86
90204.84

Accrd Payroll
Voucher Payable

90204.84

FOH Control
7.5% FICA Tax payable
5.4% State Unemp Tax payble
0.8% Fed. Unemp Tax payble

15256.87

90204.84

8352.3
6013.7
890.9
15256.87

WIP Job 204

9480

WIP Job 205

WIP Job 206
WIP Job 207
Material Control

11320
10490
22440

FOH Control Account

Prepaid Insurance
Taxes Payable
Dep-Machinry
Dep-Building
V/Payalbe
Indirect Supplies

13205

WIP Job 204

WIP Job 205
WIP Job 206
WIP Job 207
FOH Applied

53730

830
845
780
840
8000
1910
2.3
2.3
2.3
2.3

3355.5
3250
3815
2910

30660.15

FOH Applied
FOH Control
h

7717.65
7475
8774.5
6693

30660.15
30660.15

A/R

117500

Sales

117500

Cost of Goods Sold

Finished goods
2 JOB

O/B
204
205
206
207

Problem 8

50460
118060
124101
0
292621

94501.65
94501.65

D.MaterialD.Labour FOH
9480
11320
10490
22440
53730

Over Applied FOH

Total

26844 7717.65 94501.65

22750
7475
159605
28920
8774.5 172285.5
20370
6693
49503
98884 30660.15 183274.2

2018.28