Chapter 7 Job Costing Chapter Review Solutions 7 Job Costing - Solutions 87 Chapter 7 Job Costing Chapter Review Solutions 1. 1 2 3 4 Total R.M.C. Op Bal 3,000 1,000 4,000 April 500

Chapter 7 Job Costing - Solutions

87

Chapter 7 Job Costing Chapter Review Solutions

1.

1 2 3 4 Total R.M.C. Op Bal 3,000 1,000 4,000 April 500 4,000 1,100 5,600 Labour Op Bal 1,500 500 2,000 April 1,200 600 3,000 1,050 5,850 Overhead Op Bal 1,500 500 2,000 April 1,200 600 3,000 1,050 5,850 8,400 3,700 10,000 3,200 25,300 Fin Goods 8,400 3,700 12,100 C.O.G.S. 8,400 8,400

( i ) Work In Progress Bal b/d 8,000 Finished Goods 12,100 Materials 5,600 Labour 5,850 Balance 13,200 Overhead 5,850 25,300 25,300

( ii ) Finished Goods W.I.P. 12,100 C.O.G.S. 8,400 Balance 3,700 12,100 12,100

2 ( i ) Overhead recovery rate = 300/15 = $20 per hour

( ii ) JOB CARD NAME OF CLIENT: Nick Easter $ LABOUR COSTS Partners 10 hours @ $100 per hour 1,000 Staff 20 hours @ $ 50 per hour 1,000 COMPUTER COSTS Computer Time 10 hours @ $40 per hour 400 OVERHEADS Overhead applied 30 hours @ $20 per hour 600 TOTAL COST 3,000 INVOICE PRICE $4,500

Management Accounting in Australia - Solutions

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3 Debit Credit

( a ) Raw Material Control 55,000 Accounts Payable 55,000

( b ) Work In Process 48,000 Raw Material Control 48,000

( c ) Factory Overhead Control 2,000 Raw Material Control 2,000

( d ) Work In Process 35,000 Labour Control 35,000

( e ) Factory Overhead Control 4,000 Labour Control 4,000

( f ) Accrued Payroll 39,000 Bank 39,000

( g ) Factory Overhead Control 1,000 Various Accounts 1,000

( h ) Work In Process 7,000 Factory Overhead Applied 7,000

( I ) Finished Goods 80,000 Work In Process 80,000

( j ) Cost of Goods Sold 60,000 Finished Goods 60,000 Accounts Receivable 90,000 Sales 90,000

4. ( a ) Overhead Recovery Rate = $ 5,000 = $2.50 per D.L.H.

2,000 D.L.H. ( b ) Job Card Summary Job No. 200 201 202 203 TotalOpening Balance 1,250 1,250Raw Material Control 560 670 320 280 1,830Labour Control 1,680 3,360 2,320 400 7,760Factory Overhead Applied 1,050 2,100 1,450 250 4,850 $4,540 $6,130 $4,090 $930 $15,690

( c ) Factory Overhead Control $5,200 Factory Overhead Applied $4,850 Underapplied Overhead $ 350 ( d ) Work In Process Opening Balance 1,250 Finished Goods 10,220Raw Material Control 1,830 Labour Control 7,760 Factory Overhead Applied 4,850 Closing Balance 5,470 $15,690 $15,690


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5. General Ledger Debit Credit Raw Material Control 80,000 Bank 80,000 Work In Process 60,000 Raw Material Control 60,000 Factory O/head Control 3,000 Raw Material Control 3,000 Raw Material Control 1,000 Factory O/head Control 1,000 Work In Process 30,000 Labour Control 30,000 Factory O/head Control 3,000 Labour Control 3,000 Labour Control 40,000 Accrued Payroll 40,000 Accrued Payroll 40,000 Bank 40,000 Factory O/head Control 2,000 Accumulated Depreciation 2,000 Factory O/head Control 3,000 Prepaid Rent 3,000 Factory O/head Applied 10,000 Factory O/head Control 10,000 Work In Process 10,000 Factory O/head Applied 10,000 Finished Goods 80,000 Work In Process 80,000 Cost of Goods Sold 50,000 Finished Goods 50,000 Accounts Receivable 90,000 Sales 90,000

6.

Debit Credit ( a ) Raw Material Control 45,900 Accounts Payable 45,900 ( b ) Accrued Payroll 60,000 Bank 60,000 ( c ) Work in Process 54,000 Factory Overhead Control 8,500 Labour Control 62,500 ( d ) Work in Process 37,300 Factory Overhead Control 7,400 Raw Material Control 44,700 ( e ) Factory Overhead Control 3,300 Accumulated Depreciation 3,300 ( f ) Factory Overhead Control 1,400 Various Accounts 1,400 ( g ) Factory Overhead Control 4,200 Prepaid Rent 4,200 ( h ) Work In Process 32,400 Factory Overhead Applied 32,400 ( i ) Finished Goods 126,900 Work In Process 126,900 ( j ) Cost of Goods Sold 125,000 Finished Goods 125,000 Accounts Receivable 198,000 Sales 198,000


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7. ( a ) Job Cost Summary Card Job No. 38 39 40 41 42 43 TotalOpening Balance 6,500 2,500 9,000 Input Material 1,500 500 21,000 6,300 29,300Labour 1,000 300 11,000 2,800 15,100Factory O/h Applied 500 150 5,500 1,400 7,550Total 9,500 3,450 37,500 10,500 60,950

( b ) Debit CreditRaw Material Control 32,000 Accounts Payable 32,000Work In Process 29,300 Factory Overhead Control 700 Raw Material Control 30,000Work In Process 15,100 Factory Overhead Control 1,900 Labour Control 17,000Labour Control 17,000 Accrued Payroll 17,000Accrued Payroll 17,000 Bank 17,000Factory Overhead Control 4,900 Various Accounts 4,900Factory Overhead Applied 7,500 Factory Overhead Control 7,500Work In Process 7,550 Factory Overhead Applied 7,550Finished Goods 50,450 Work In Process 50,450Cost of Goods Sold 20,950 Finished Goods 20,950Accounts Receivable 23,000 Sales 23,000

( c ) Work In Process Opening Balance 9,000 Finished Goods 50,450Raw Material Control 29,300 Labour Control 15,100 Factory Overhead Applied 7,550 Closing Balance 10,500 60,950 60,950

Finished Goods Opening Balance 8,000 Cost of Goods Sold 20,950Work in Process 50,450 Closing Balance 37,500 58,450 58,450


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8. ( a ) Job Cost Summary Card Job No. 61 62 63 64 TotalOpening Balance 7,000 12,000 19,000 Input Material 3,900 4,000 2,390 10,290Labour 1,800 5,000 2,600 1,400 10,800Factory Overhead Applied 2,700 7,500 3,900 2,100 16,200Total 11,500 28,400 10,500 5,890 56,290 Work in Process 11,500 28,400 10,500 5,890 56,290 Finished Goods 11,500 28,400 10,500 50,400 Cost of Goods Sold 11,500 10,500 22,000

( b ) Profit Summary Job No. 61 Job No. 63 Total Sales $ 14,000 $ 12,000 $ 26,000- Cost of Goods Sold - 11,500 - 10,500 - 22,000= Gross Profit $ 2,500 $ 1,500 $ 4,000+ Overapplied Overhead $ 1,140 Actual Gross Profit $ 5,140

( c ) Factory Overhead Control Raw Material Control 2,920 Factory Overhead Applied 15,060Labour Control 1,785 Other 10,355 15,060 15,060 Factory Overhead Applied Factory Overhead Control 15,060 Work in Process 16,200Cost of Goods Sold 1,140 16,200 16,200

Debit CreditFactory Overhead Applied 1,140 Cost of Goods Sold 1,140


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9. ( a ) Job Cost Card Job No. 17 18 19 20 21 22 23 24 TotalOpening Balance 1,720 1,960 3,680Material Input 1,820 1,310 1,400 1,700 2,100 850 2,100 11,280Labour Input 1,480 920 980 1,120 1,700 620 1,520 8,340Factory O/h App Input 740 460 490 560 850 310 760 4,170Total 5,760 4,650 2,870 3,380 4,650 1,780 4,380 27,470 Work in Process 5,760 4,650 2,870 3,380 4,650 1,780 4,380 27,470Finished Goods 5,760 4,650 2,870 3,380 4,650 1,780 23,090

( b ) Factory Overhead Control Raw Material Control 1,200 Factory Overhead Applied 4,780Raw Material Control 230 Labour Control 850 Bank ( Rates ) 1,200 Accumulated Depreciation 800 Bank ( Maintenance ) 500 4,780 4,780

Factory Overhead Applied Factory Overhead Control 4,780 Work in Process 4,170 Cost of Goods Sold 610 4,780 4,780

Raw Material Control Opening Balance 5,010 Work in Process 11,280Accounts Payable 14,500 Factory Overhead Control 1,200 Factory Overhead Control 230 Closing Balance 6,800 19,510 19,510


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( b ) Debit CreditRaw Material Control 14,500 Accounts Payable 14,500Work In Process 11,280 Factory Overhead Control 1,200 Raw Material Control 12,480Factory Overhead Control 230 Raw Material Control 230Work In Process 8,430 Factory Overhead Control 850 Labour Control 9,190Labour Control 9,190 Accrued Payroll 9,190Accrued Payroll 9,190 Bank 9,190Factory Overhead Control 2,500 Various Accounts 2,500Factory Overhead Applied 4,780 Factory Overhead Control 4,780Work in Process 4,170 Factory Overhead Applied 4,170Cost of Goods Sold 610 Factory Overhead Applied 610Finished Goods 23,090 Work in Process 23,090Cost of Goods Sold 23,200 Finished Goods 23,200Selling & Administration 3,230 Bank 3,230Accounts Receivable 32,300 Sales 32,300

Sales $ 32,300- Cost of Goods Sold 23,200 + Underapplied Overhead 610 $ 23,810= Gross Profit $ 8,490- Selling & Administration - $ 3,230= Net Profit $ 5,260


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10. Job Cost Card Job No. 35 36 37 38 39 40 41 TotalOpening Balance 900 700 1,600 Input Material 60 2,100 1,345 1,690 4,295 9,490 Labour 520 1,100 2,650 1,630 140 6,040 Factory O/H Appl 312 660 1,590 978 84 3,624 Total 1,792 4,560 5,585 4,298 4,519 20,754 Work in Process 1,792 4,560 5,585 4,298 4,519 20,754 Finished Goods 1,792 4,560 5,585 4,298 16,235 Cost of Goods Sold 1,600 1,300 1,792 4,560 5,585 14,837

Debit CreditRaw Material Control 19,430 Accounts Payable 19,430Work In Process 9,490 Factory Overhead Control 710 Raw Material Control 10,200Work in Process 6,040 Factory Overhead Control 990 Labour Control 7,030Labour Control 7,030 Accrued Payroll 7,030Accrued Payroll 7,030 Bank 7,030Factory Overhead Control 2,090 Various Accounts 2,090Factory Overhead Applied 3,790 Factory Overhead Control 3,790Work in Process 3,624 Factory Overhead Applied 3,624Cost of Goods Sold 166 Factory Overhead Applied 166Finished Goods 16,235 Work in Process 16,235Cost of Goods Sold 14,837 Finished Goods 14,837Accounts Receivable ( Debtors ) 17,550 Sales 17,550


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11. ( a ) The work in process at the 1st November comprised:

No. Total In Progress 27 34,600 28 24,200 29 11,600

Job Cost Card Job No. 27 28 29 30 31 TotalOpening Balance 34,600 24,200 11,600 70,400Material Input 3,800 7,200 17,400 20,600 24,900 73,900Labour Input 8,600 11,200 9,400 16,300 18,500 64,000Factory O/H Appl Input 12,900 16,800 14,100 24,450 27,750 96,000Total 59,900 59,400 52,500 61,350 71,150 304,300 Work in Process 59,900 59,400 52,500 61,350 71,150 304,300Finished Goods 59,900 59,400 52,500 171,800Cost of Goods Sold 59,900 59,400 52,500 171,800

( b ) Debit CreditRaw Material Control 78,000 Accounts Payable 78,000Work In Process 73,900 Factory Overhead Control 16,200 Raw Material Control 90,100Work in Process 64,000 Factory Overhead Control 14,600 Labour Control 78,600Labour Control 78,600 Accrued Payroll 78,600Accrued Payroll 78,600 Bank 78,600Factory Overhead Control 62,600 Provision for Depreciation 6,800 Supervision 11,900 Payroll Tax Payable 5,300 Various Accounts 38,600Factory Overhead Applied 93,400 Factory Overhead Control 93,400Work in Process 96,000 Factory Overhead Applied 96,000Finished Goods 171,800 Work in Process 171,800

( c ) Cost of Goods Sold 171,800 Finished Goods 171,800


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12. ( a ) Job Cost Card Job No. 70 71 72 73 74 75 76 TotalOpening Balance 1,800 1,400 3,200Material Input 120 4,200 2,690 3,380 8,590 18,980Labour Input 1,040 2,200 5,300 3,260 280 12,080Factory O/H App. Input 624 1,320 3,180 1,956 168 7,248Total 3,584 9,120 11,170 8,596 9,038 41,508 Work in Process 3,584 9,120 11,170 8,596 9,038 41,508Finished Goods 3,584 9,120 11,170 8,596 32,470C.O.G.S. 3,200 2,600 3,584 9,120 11,170 29,674 ( b ) General Ledger

Debit CreditRaw Material Control 38,860 Accounts Payable 38,860Work in Process 18,980Factory Overhead Control 1,420 Raw Material Control 20,400Work in Process 12,080Factory Overhead Control 1,980 Labour Control 14,060Labour Control 14,060 Accrued Payroll / Bank 14,060

Factory Overhead Control 4,180 Bank / Various Accounts 4,180Factory Overhead Applied 7,580 Factory Overhead Control 7,580

Work in Process 7,248 Factory Overhead Applied 7,248

Finished Goods 32,470 Work in Process 32,470

Cost of Goods Sold 29,674 Finished Goods 29,674

Cost of Goods Sold 332 Factory Overhead Applied 332

Factory Overhead Control Factory Overhead Applied

R.M.C. 1,420 F.O.A. 7,580 F.O.C. 7,580 W.I.P. 7,248 L.C. 1,980 C.O.G.S, 332 Other 4,180 7,580 7,580 7,580 7,580


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13. ( a ) Job Cost Card

Job No. 19 20 21 22 23 24 25 26 TotalOpening Balance 3,580 900 4,480Material Input 2,400 3,600 2,800 2,000 10,800Labour Opening Balance Input 480 1,160 2,160 3,040 1,240 8,080Factory O/H Appl Opening Balance Input 336 812 1,512 2,128 868 5,656Total 4,396 2,872 6,072 8,768 4,908 2,000 29,016Work in Process 4,396 2,872 6,072 8,768 4,908 2,000 29,016Finished Goods 4,396 2,872 6,072 8,768 4,908 27,016

( b ) Raw Material Control Opening Balance 12,400 Work in Process 10,800 Accounts Payable 9,600 Factory Overhead Control 700 Factory Overhead Control 80 Closing Balance 10,420 22,000 22,000

Labour Control Accrued Payroll / Bank 9,760 Work in Process 8,080 Factory Overhead Control 1,680 9,760 9,760

Factory Overhead Control Raw Material Control 700 Factory Overhead Applied 4,880 Raw Material Control 80 Labour Control 1,680 Various 2,420 4,880 4,880

Factory Overhead Applied Factory Overhead Control 4,880 Work in Process 5,656 Cost of Good Sold 776 5,656 5,656

Work in Process Opening Balance 4,480 Finished Goods 27,016 Raw Material Control 10,800 Labour Control 8,080 Factory Overhead Applied 5,656 Closing Balance 2,000 29,016 29,016

Finished Goods Control Opening Balance 5,574 Cost of Goods Sold 27,682 Work in Process 27,016 Closing Balance 4,908 32,590 32,590 Sales $ 29,620.00 Cost of Goods Sold $ 27,016 + Overapplied Overhead 226 26,240.00 $ 3,380.00 - Selling and Administration Expenses 1,482.50 = Net Loss $ 1,897.50


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14. Job Cost Card Job No. 311 312 313 314 Total Opening Balance 9,600 6,400 16,000Input 3,600 3,200 8,000 10,000 24,800Labour Input 2,400 3,600 10,000 15,200 31,200Factory O/H Applied Input 2,400 3,600 10,000 15,200 31,200Total 18,000 16,800 28,000 40,400 103,200 Work in Process 18,000 16,800 28,000 40,400 103,200Finished Goods 18,000 16,800 28,000 62,800Cost of Goods Sold 18,000 16,800 34,800

( b ) Debit Credit Debit Credit Raw Material Control 24,000 Work in Process 24,800 Accounts Payable 24,000 Factory Overhead Control 2,000 Raw Material Control 26,800 Work in Process 31,200 Labour Control 43,000 Factory Overhead Control 13,000 Accured Payroll 43,000 Labour Control 44,200 Accured Payroll 43,000 Bank 43,000 Factory Overhead Control 15,800 Bank 5,600 Prepaid Insurance 10,200 Factory Overhead Control 100 Raw Material Control 100 Factory Overhead Applied 30,900 Work in Process 31,200 Factory Overhead Control 30,900 Factory Overhead Applied 31,200 Finished Goods 62,800 Cost of Goods Sold 34,800 Work in Process 62,800 Finished Goods 34,800

Raw Material Control Opening Balance 10,800 Work in Process 24,800Accounts Payable 24,000 Factory Overhead Control 2,000 Factory Overhead Control 100 Closing Balance 7,900 34,800 34,800


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15. ( a ) One Ledger System Job Cost Card Job No. 600 601 602 603 604 TotalOpening Bal. 18 24 42Material Input 10 7 23 20 60Labour Input 8 15 4 1 28FOA Input 8 15 4 1 28Total 44 61 31 22 158( b ) Transfers to: Finished Goods 44 61 31 136C.O.G.S. 38 44 61 143( b ) General Ledger Work In Process Control $ 22 Finished Goods Control 31 ( c ) Raw Material Control Opening Balance 50 Work in Process 60Accounts Payable 85 Factory Overhead Control 4 Factory Overhead Control * 5 Closing Balance 66 135 ( stock adjustment )* 135

Labour Control Accrued Payroll 34 Opening Balance 15 Work in Process 28Closing Balance 15 Factory Overhead Control 6 49 49

Factory Overhead Control Bank 7 Factory Overhead Applied 40Prepaid Insurance 8 Accumulated Depreciation 10 Raw Material Control 4 Raw Material Control 5 Labour Control 6 40 40

Factory Overhead Applied Factory Overhead Control 40 Opening Balance 5 Work in Process 28 Cost of Goods Sold 7 40 40

Work in Process Control Opening Balance 42 Finished Goods 136Raw Material Control 60 Labour Control 28 Factory Overhead Applied 28 Closing Balance 22 158 158

Finished Goods Control Opening Balance 38 Cost of Goods Sold 143Work in Process 136 Closing Balance 31 174 174( d ) Revenue Statement 600 601 602 TotalSales $ 55 $ 50 $ 60 $ 165Cost of Goods Sold - 38 - 44 - 61 - 143Gross Profit 17 6 - 1 22Underapplied Overhead - 7Actual Gross Profit $ 15


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16. ( a ) Job No. 17 18 19 20 21 22 23 24 TotalOpening Balance 1,720 1,960 3,680Material Input 1,820 1,310 1,400 1,700 2,100 850 2,100 11,280Labour Input 1,480 920 980 1,120 1,700 620 1,520 8,340F.O.A. Input 740 460 490 560 850 310 760 4,170Total 5,760 4,650 2,870 3,380 4,650 1,780 4,380 27,470Work in Process 5,760 4,650 2,870 3,380 4,650 1,780 4,380 27,470Finished Goods 5,760 4,650 2,870 3,380 4,650 1,780 23,090C.O.G.S. 1,890 5,760 4,650 2,870 3,380 4,650 23,200( b ) Raw Material Control Opening Balance 5,010 Work in Process 11,280Accounts Payable 14,500 Factory Overhead Control 1,200 Factory Overhead Control 230 Closing Balance 6,800 19,510 19,510

Labour Control Accrued Payroll 9,000 Opening Balance 700 Work in Process 8,340Closing Balance 890 Factory Overhead Control 850 9,890 9,890

Factory Overhead Control Bank 1,200 Factory Overhead Applied 5,780Accumulated Depreciation 1,800 Bank 500 Raw Material Control 1,200 Labour Control 850 Raw Material Control 230 5,780 5,780

Factory Overhead Applied Factory Overhead Control 5,780 Work in Process 4,170 Closing Balance 1,610 5,780 5,780

Work in Process Opening Balance 3,680 Finished Goods 23,090Raw Material Control 11,280 Labour Control 8,340 Factory Overhead Applied 4,170 Closing Balance 4,380 27,470 27,470

Finished Goods Control Opening Balance 1,890 Cost of Goods Sold 23,200Work in Process 23,090 Closing Balance 1,780 24,980 24,980


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17. Job Cost Card Job No. 600 601 602 603 604 605 TotalOpening Bal 2,080 1,220 3,300Material Input 2,200 1,500 500 4,200Returns - 250 Labour Input 100 50 1,750 1,850 400 4,150Factory O/H App Input 80 40 1,400 1,480 320 3,320Total 2,260 1,310 5,100 4,830 1,220 14,970Work in Process 2,260 1,310 5,100 4,830 1,220 14,970Finished Goods 2,260 1,310 5,100 4,830 13,500C.O.G.S. 900 2,260 1,310 5,100 9,570 General Ledger

Raw Material Control

Opening Balance 4,000 Work in Process 4,200 Accounts Payable 5,000 Accounts Payable 250 Work in Process 250 Closing Balance 4,800 9,250 9,250

Labour Control

Accrued Payroll 4,550 Work in Process 4,150 Closing Balance 150 Factory Overhead Control 550 4,700 4,700

Factory Overhead Control

Bank 2,675 Factory Overhead Applied 3,225 Labour Control 550 3,225 3,225

Factory Overhead Applied

Factory Overhead Control 3,225 Work in Process 3,320 Closing Balance 95 3,320 3,320

Work in Process

Opening Balance 3,300 Finished Goods 13,500 Raw Material Control 4,200 Raw Material Control 250 Labour Control 4,150 Factory Overhead Applied 3,320 Closing Balance 1,220 14,970 14,970

Finished Goods Control

Opening Balance 900 Cost of Goods Sold 9,570 Work in Process 13,500 Closing Balance 4,830 14,400 14,400


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18. ( a ) Job Cost Card Job No. 21 22 23 24 TotalOpening Balance 11,220 11,220 Material Input 420 6,200 1,320 7,940 Labour Input 300 5,200 840 6,340 Factory O/H Applied Input 150 2,600 420 3,170Total 12,090 14,000 2,580 28,670Work in Process 12,090 14,000 2,580 28,670Finished Goods 12,090 14,000 26,090C.O.G.S. 14,500 14,000 28,500 ( b ) General Ledger

Raw Material Control

Opening Balance 3,280 Work in Process 7,940 Accounts Payable 7,280 Factory Overhead Control 920 Closing Balance 1,700 10,560 10,560

Labour Control

Accrued Payroll 7,400 Opening Balance 1,000 Work in Process 6,340 Closing Balance 980 Factory Overhead Control 1,040 8,380 8,380


Bank 1,100 Factory Overhead Applied 3,060 Labour Control 1,040 Raw Material Control 920 3,060 3.060


Factory Overhead Control 3,060 Work in Process 3,170 Closing Balance 110 3,170 3,170

Work in Process

Opening Balance 11,220 Finished Goods 26,090 Raw Material Control 7,940 Labour Control 6,340 Factory Overhead Applied 3,170 Closing Balance 2,580 28,670 28,670

Finished Goods Control

Opening Balance 14,500 Cost of Goods Sold 28,500 Work in Process 26,090 Closing Balance 12,090 40,590 40,590


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Job No. 111 112 113 114 TotalMaterial Opening Balance 1,200 800 2,000Input 1,800 1,600 4,000 5,000 12,400Labour Opening Balance 1,800 1,200 3,000Input 1,200 1,800 5,000 7,600 15,600Factory O/H Applied Opening Balance 1,800 1,200 3,000Input 1,200 1,800 5,000 7,600 15,600Total 9,000 8,400 14,000 20,200 51,600Work in Process 9,000 8,400 14,000 20,200 51,600Rework - 400 * Finished Goods 9,000 8,000 14,000 31,000General Ledger Control 9,000 8,000 14,000 31,000

* Labour & Factory Overhead Applied ( $ 200 + $ 200 )

( b ) General Ledger Raw Material Control

Opening Balance 5,400 Work in Process 12,400 Accounts Payable 12,000 Factory Overhead Control 1,000 Closing Balance 4,000 17,400 17,400

Labour Control Accrued Payroll 21,500 Opening Balance 400 Work in Process 15,600 Closing Balance 1,000 Factory Overhead Control 6,500 22,500 22,500

Factory Overhead Control Bank / Various Accounts 7,900 Factory Overhead Applied 15,500 Labour Control 6,500 Raw Material Control 1,000 Accumulated Depreciation 100 15,500 15,500

Factory Overhead Applied Factory Overhead Control 15,500 Work in Process 15,600 Closing Balance 100 15,600 15,600

Work in Process Opening Balance 8,000 Finished Goods 31,000 Raw Material Control 12,400 Rework 400 Labour Control 15,600 Factory Overhead Applied 15,600 Closing Balance 20,200 51,600 51,600

Finished Goods Control Work in Process 31,000 Cost of Goods Sold 31,000 31,000 31,000

Rework Account Work in Process 400 Cost of Goods Sold 400 400 400

** Labour $200 + Overhead Applied $200 **


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Job No. 19 18 20 21 22 23 TotalMaterial Opening Balance 700 190 890Input 590 420 480 120 1,610Labour Opening Balance 620 200 820Input 50 460 510 590 90 1,700Factory O/H Applied Opening Balance 310 100 410Input 25 230 255 295 45 850Clean-up 46 32 26 28 132Total 1,751 1,802 1,211 1,393 255 6,412Work in Process 1,751 1,802 1,211 1,393 255 6,412Returns - 40 Finished Goods 1,751 1,802 1,211 1,353 6,117General Ledger Control 950 1,751 1,802 1,211 1,353 7,067( b ) Factory Ledger

Raw Material Control Opening Balance 1,800 Work in Process 1,610 Accounts Payable 2,010 Factory Overhead Control 360 Work in Process 40 Factory Overhead Control 20 Closing Balance 1,900 3,870 3,870

Labour Control Accrued Payroll 2,380 Opening Balance 360 Work in Process 1,700 Closing Balance 50 Factory Overhead Control 370 2,430 2,430

Factory Overhead Control Bank / Various Accounts 186 Factory Overhead Applied 896 Labour Control 370 Raw Material Control 20 Raw Material Control 360 916 916

Factory Overhead Applied Factory Overhead Control 896 Work in Process 850 Closing Balance 46 896 896

Work in Process Opening Balance 2,120 Finished Goods 6,117 Raw Material Control 1,610 Raw Material Control 40 Labour Control 1,700 Factory Overhead Applied 850 Clean Up 132 Closing Balance 255 6,412 6,412

Finished Goods Opening Balance 950 Cost of Goods Sold 7,067 Work in Process 6,117 7,067 7,067

Clean-Up Account Bank 132 Work in Process 132 132 132


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21. Total 40% Floor 60% K.w.H.r Fixed Overhead $ 36,000 $ 14,400 $ 21,600 Total Cutting Machining Assembly Floor $ 14,400 $ 2,880 $ 7,200 $ 4,320 K.w.H.r. $ 21,600 $ 8,640 $ 8,640 $ 4,320 $ 36,000 $11,520 $15,840 $ 8,640 Recovery Rate 7,680 D.L.H. 3,840 M. H.r. 11,520 D.L.H. ( a ) Fixed Rate $ 1.50 $ 4.125 $ 0.75Variable Rate 2.40 4.10 2.80Recovery Rate $ 3.90 $ 8.225 $ 3.55

Job Card Summary

Job No 42 Job No 43 Cutting Machining Assembly Cutting Machining Assembly Total Raw Material Control 13,300 1,400 10,800 750 26,250 Labour Control 1st 360 2,160 120 1,560 4,200 2nd 3,200 2,800 2,700 400 9,100 Labourer 3,520 1,280 4,800 Factory O/h Applied 1,365 823 2,056 1,092 1,234 710 7,780 Total 18,225 2,983 9,776 14,712 2,794 3,140 52,130 $ 30,984 $ 20,646 $ 52,130

( b ) W.I.P $26,250 W.I.P $18,100 W.I.P. $7,786 F.G. $31,489 F.O.C. $8,670 R.M.C. $26,250 L.C. $18,100 F.O.A. $7,786 W.I.P. $31,489 A/c P $ 8,670 ( c ) Overhead Analysis

Actual Flexible Budget based Actual x Total Overhead on actual production Rate per hr.

$ 2,550 F. $ 960 630 x $ 3.90 V. $ 1,512 ( 630 x $ 2.40 )

$ 2,550 $ 2,472 $ 2,457

$ 78 ( u.f. ) $ 15 ( u.f. )

Overhead Spending Variance Overhead Capacity Variance


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Job No. 49 50 51 52 53 54 TotalMaterial Opening Balance 700 570 1,270Input 70 130 625 1,645 1,410 3,880 Labour Opening Balance 500 350 850Input 150 190 520 1,370 940 3,170 Factory O/H Appl Opening Balance 250 175 425Input 300 380 600 1,400 400 3,080 Total 1,970 1,795 1,745 4,415 2,750 12,675 Work in Process 1,970 1,795 1,745 4,415 2,750 12,675 Finished Goods 1,970 1,795 1,745 4,415 9,925 Cost of Goods Sold 2,450 1,970 1,795 1,745 4,415 12,375

( b ) Trading Statement Job No. 49 50 51 52 53 Total Sales 2,500 2,000 1,600 1,900 1,525 9,525 - C.O.G.S. -2,450 -1,970 -1,795 -1,745 - 4,415 -12,375 = G.P. $50 $30 - $195 $155 - $2,890 -$2,850 Recovery Rate: Dept 1 200 % D.L.C. ($800 / $400 ) Dept 2 50 c per D.L.H. ($2,500 / 5,000 hrs ) Dept 3 $ 2.00 per M. Hr. ($500 / 250 m.hrs )

( c ) Underapplied Overhead $75 ($475 - $400).


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23. ( a ) Raw Material Control

Accounts Payable 41,000 Work in Process 30,000 Closing Balance 11,000 41,000 41,000

Labour Control Accrued Payroll / Bank 20,000 Work in Process 20,000 20,000 20,000

Factory Overhead Control Fixed 25,000 Factory Overhead Applied 47,500 Variable 22,500 47,500 47,500

Factory Overhead Applied Factory Overhead Control 47,500 Work in Process 50,600 Overhead Spending Variance 600 Overhead Capacity Variance 2,500 50,600 50,600

Work in Process Raw Material Control 30,000 Finished Goods 90,000 Labour Control 20,000 Factory Overhead Applied 50,600 Closing Balance 10,600 100,600 100,600

Finished Goods Work in Process 90,000 Cost of Goods Sold 85,000 Closing Balance 5,000 90,000 90,000

( b ) Overhead Analysis

Actual Flexible Budget based Actual x Std. Rate on actual production

F. $ 25,000 F. $ 25,000 5,500 x $ 9.20 V. $ 22,500 V. $ 23,100 (5,500 x $4.20)

$ 47,500 $ 48,100 $ 50,600

$ 600 (f) $ 2,500 (f)

Overhead Spending Variance Overhead Capacity Variance

Income Statement Sales $ 160,000- Cost of Goods Sold 85,000= Gross Profit $ 75,000- Expenses 72,500 Sell 42,500 Fixed 30,000 Net Profit $ 2,500


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24. Hint: Work backwards. Raw Material Control Opening Balance 0 Factory Overhead Control 500 Work in Process 8,000Accounts Payable 12,500 Closing Balance 4,000 12,500 12,500

Labour Control

Accrued Payroll / Bank 9,100 Work in Process 9,000Closing Balance 400 Factory Overhead Control 500 9,500 9,500


Raw Material Control 500 Factory Overhead Applied 6,500Labour Control 500 Other 5,500 6,500 6,500


Factory Overhead Control 6,500 Opening Balance 500 Work in Process 6,000 6,500 6,500

Work In Process

Raw Material Control 8,000 Finished Goods 20,000Labour Control 9,000 Factory Overhead Applied 6,000 Closing Balance 3,000 23,000 23,000

Finished Goods

Work in Process 20,000 Cost of Goods Sold 13,000 Closing Balance 7,000 20,000 20,000


109

25. Debit Credit

Raw Material Control 20,200 Accounts Payable 20,200 Work in Process 17,500 Factory Overhead Control 2,500 Raw Material Control 20,000 Work in Process 6,000 Factory Overhead Control 1,300 Labour Control 7,300 Labour Control 7,300 P.A.Y.G. Tax Payable 1,240 Union Fees Due 60 Medical Benefits Payable 200 Accured Payroll 5,800 Accured Payroll 5,800 Bank 5,800 Factory O/head Control 200 Raw Material Control 200 Factory Overhead Control 5,000 Bank 4,000 Accumulated Depreciation 1,000 Factory Overhead Applied 9,000 Factory Overhead Control 9,000 Work in Process 9,000 Factory Overhead Applied 9,000 Finished Goods 23,500 Work in Process 23,500 Cost of Goods Sold 23,500 Finished Goods 23,500


110


Job No. 1720 1721 1723 1724 1725 R911 R912 TotalMaterial Opening Balance 11,200 6,500 1,700 19,400Input 800 3,200 6,400 4,600 300 1,100 16,400Labour Opening Balance 14,400 8,800 4,600 27,800Input 1,500 5,600 11,300 7,800 700 2,100 29,000Factory O/H Applied Opening Balance 7,200 4,400 2,300 13,900Input 750 2,800 5,650 3,900 350 1,050 14,500Travel 240 380 620Total 35,850 31,300 23,350 16,300 10,190 4,630 121,620Work in Process 35,850 31,300 23,350 16,300 10,190 4,630 121,620Finished Goods 35,850 23,350 16,300 10,190 85,690General Ledger Control 18,500 35,850 23,350 10,190 87,890 ( b )

Factory Ledger Raw Material Control

Opening Balance 42,400 Work in Process 16,400 Accounts Payable 23,600 Factory Overhead Control 2,800 Closing Balance 46,800 66,000 66,000

Labour Control Accrued Payroll 33,000 Opening Balance 1,800 Work in Process 29,000 Closing Balance 2,000 Factory Overhead Control 4,200 35,000 35,000

Factory Overhead Control Raw Material Control 2,800 Factory Overhead Applied 14,600 Labour Control 4,200 Various Accounts 7,600 14,600 14,600


Factory Overhead Control 14,600 Opening Balance 700 Cost of Goods Sold 600 Work in Process 14,500 15,200 15,200

Work in Process Opening Balance 61,100 Finished Goods 85,690 Raw Material Control 16,400 Labour Control 29,000 Factory Overhead Applied 14,500 Accounts Payable 620 Closing Balance 35,930 121,620 121,620

Finished Goods Opening Balance 18,500 Cost of Goods Sold 87,890 Work in Process 85,690 Closing Balance 16,300 104,190 104,190


111

27. Job Cost Card

Job No. 101 102 103 Total Budgeted Overhead = $ 90,000Raw Material Control 9,400 13,300 6,400 29,100 Labour Control 2,000 12,400 14,100 28,500 Factory O/H Applied 500 3,100 3,525 7,125 Budgeted Lab. Cost = $ 360,000 Work in Process 11,900 28,800 24,025 64,725 Recovery Rate = 25% DLCFinished Goods 11,900 28,800 40,700 Cost of Goods Sold 11,900 11,900

General Ledger Raw Material Control

Opening Balance 7,450 Work in Process 29,100 Accounts Payable 34,000 Factory Overhead Control 1,050 Accounts Payable 1,500 Factory Overhead Control 400 Closing Balance 9,400 41,450 41,450

Labour Control Accrued Payroll 31,050 Factory Overhead Control 2,550 Work in Process 28,500 31,050 31,050

Factory Overhead Control Raw Material Control 1,050 Factory Overhead Applied 8,050 Labour Control 2,550 Bank 4,050 Raw Material Control 400 8,050 8,050

Factory Overhead Applied Opening Balance 350 Work in Process 7,125 Factory Overhead Control 8,050 Closing Balance 1,275 8,400 8,400

Work in Process Opening Balance 0 Finished Goods 40,700 Raw Material Control 29,100 Labour Control 28,500 Factory Overhead Applied 7,125 Closing Balance 24,025 64,725 64,725

Finished Goods Control Work in Process 40,700 Cost of Goods Sold 11,900 Closing Balance 28,800 40,700 40,700


112

28. Raw Material Control

Opening Balance 24,600 Factory Overhead Control 3,000 Accounts Payable 55,200 Work in Process 66,200 Closing Balance 10,600 79,800 79,800

Labour Control Accrued Payroll / Bank 17,000 Opening Balance 780 Factory Overhead Control 5,000 Closing Balance 1,280 Work in Process 12,500 18,280 18,280

Work in Process Opening Balance 17,800 Finished Goods 141,500 Raw Materials Control 66,200 Labour Control 12,500 Factory Overhead Applied 50,000 Closing Balance 5,000 146,500 146,500

Finished Goods Opening Balance 13,000 Cost of Goods Sold 148,700 Work in Process 141,500 Closing Balance 5,800 154,500 154,500

Factory Overhead Control Raw Materials Control 3,000 Factory Overhead Applied 44,200 Labour Control 5,000 Various Accounts 36,200 44,200 44,200

Factory Overhead Applied Factory Overhead Control 44,200 Work in Process 50,000 Closing Balance 5,800 50,000 50,000

Hint: Work backwards.

C.O.G.S. = $ 148,700 ( $ 223,050 ) 1.50 Total Factory Labour = 3,500 hrs - Indirect Labour - 1,000 * * Ind Hrs $ 5,000/ $ 5.00 per hr. Direct Labour 2,500 hrs Direct Labour Cost = $ 12,500 (2,500 hrs x $ 5.00 per hr.) Factory Overhead Applied = $ 50 000 (2,500 hrs x $ 20.00 per hr.) Overhead Incurred: Indirect Material $ 3,000 Indirect Labour 5,000 Other O/H Incurred 36,200 Total $ 44,200


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29. ( a ) Job Card Summary

Job No: 20 Price: $ 50,000 Terms: A/c Customer: Johnnie Ltd Quantity: 100 units Delivery: 28th June

Date Material Labour Factory Overhead Applied Total 16/6 C: $ 21,000 $ 21,000

C: $ 5,500 $ 6,600 $ 12,100 F: $ 850 $ 638 $ 1,488 $ 21,000 $ 6,350 $ 7,238 $ 34,588Job No: 21 Price: $ 8,400 Terms: C.O.D. Customer: Walker Ltd Quantity: 48 Units Delivery: 20th June

Date Material Labour Factory Overhead Applied Total 16/6 C: $ 1,960 $ 1,960

C: $ 2,400 $ 2,880 $ 5,280 F: $ 240 $ 180 $ 420

23/6 F: $ 300 $ 225 $ 525 $ 1,960 $ 2,940 $ 3,285 $ 8,185

$ 22,960 $ 9,290 $10,523 $42,773 ( b ) Debit Credit Raw Material Control 30,000 Accounts Payable 30,000Work In Progress 22,960 Factory Overhead Control 80 Raw Material Control 23,040Work In Progress 9,290 Factory Overhead Control 1,600 Labour Control 10,890Labour Control 10,890 Accrued Payroll 10,890Factory Overhead Control 5,750 Bank ( Rent ) 3,000 Acc. Depreciation 1,700 Bank ( Electricity ) 450 Accrued Payroll Tax 600Factory Overhead Applied 7,430 Factory Overhead Control 7,430Work In Progress 10,523 Factory Overhead Applied 10,523Factory Overhead Applied 3,093 Cost Of Goods Sold 3,093Finished Goods 42,773 Work In Progress 42,773Cost Of Goods Sold 42,773 Finished Goods 42,773Bank 8,400 Accounts Receivable 50,000 Sales 58,400

Documents

Chapter 7 Job Costing Chapter Review Solutions 7 Job Costing - Solutions 87 Chapter 7 Job Costing Chapter Review Solutions 1. 1 2 3 4 Total R.M.C. Op Bal 3,000 1,000 4,000 April 500