COST ACCOUNTING &COST CONCEPTS

Job Order Costing

Counting more, counting less
I. Hurley Company uses job-order costing. Data are as follows:
Totals
---------Materials
$2,050,000
Direct labor $2,250,000

Jobs Sold
---------$1,500,000
$1,650,000

Jobs in
Ending WIP
---------$200,000
$160,000

Jobs in Ending
Finished Goods
-------------$350,000
$440,000

Hurley applies overhead to jobs at $0.60 per direct labor dollar. Total
overhead cost incurred was $1,460,000. There were no beginning
inventories.
1.

What is cost of goods sold using normal costing?

2.

Find the ending inventory of work in process using normal costing.

3.

Find the amount of overhead (overapplied underapplied) and circle

the correct direction.

4.

Hurley treats overapplied or underapplied overhead as an

adjustment to cost of goods sold. Compute total cost of goods
sold.

II.

Acme Company uses job-order costing. Data related to August are as

follows:

Material cost
Direct labor cost
Machine hours

Job A
-----$3,900
$4,000
400

Job B
-----$4,700
$7,000
700

Job C
-----$5,400
$4,000
500

Acme applies overhead to jobs at $10.00 per machine hour. Total overhead
cost incurred in August was $16,700. There were no beginning inventories.
Job A was incomplete at the end of August, Job B was sold for $34,000, and
Job C was in finished goods inventory. Selling and administrative expenses
were $3,500.
5.

Compute the ending inventory of work in process.

6.

Compute the ending inventory of finished goods.

7.

Overhead was (overapplied underapplied) by?

direction.

8.

Compute the normal cost of goods sold.

9.

Prepare an income statement showing underapplied or overapplied

overhead as an adjustment to normal cost of sales.

Circle the correct

III. Beloit Company uses job-order costing. Data related to September

are as follows:

Material cost

Job A
-----$4,400

Job B
-----$3,400

Cost Accounting and Cost Concepts- Job Order Costing Quiz

Job C
-----$4,200

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COST ACCOUNTING &COST CONCEPTS

Job Order Costing

Counting more, counting less
Direct labor cost

$3,000

$6,000

$2,000

Beloit uses actual costing to apply overhead to jobs based on direct labor
cost. Total overhead cost incurred in September was $14,300. There were no
beginning inventories. Job A was incomplete at the end of September, Job B
was sold for $22,000, and Job C was in finished goods inventory. Selling
and administrative expenses were $3,800.
10.

Compute the ending inventory of work in process.

11.

Compute the ending inventory of finished goods.

Overhead was (overapplied underapplied) by?
correct direction.

12.

Circle the

Compute cost of goods sold.

13.

Prepare an income statement showing underapplied or

overapplied overhead as an adjustment to cost of sales.

14.

IV.

Perry Company uses a job order costing system and has the
following information for the first week of June:

1. Direct labor and direct materials used:

Job No.
498
506
507
508
509
511
512
Total

Direct
Material
$1,500
960
415
345
652
308
835
$5,015

Direct Labor
Hours
116
16
18
42
24
10
30
256

2. The direct labor wage rate is $4 per hour.

3. The overhead rate is $5 per direct labor hour.
4. Actual overhead costs for the week, $1,480.
5. Jobs completed: Nos. 498, 506, and 509.
6. The factory had no work in process at the beginning of
the week.
Required:
a. Prepare a summary that will show the total cost assigned
to each job.
b. Compute the amount of overhead over- or underapplied
during the week.
c. Calculate the cost of the work in process at the end of
the week.

Cost Accounting and Cost Concepts- Job Order Costing Quiz

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