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1.
Job Order Cost Schedule. Winkel Woodcrafters produces special-order wood products. The company uses job
order costing for pricing and cost accumulation purposes. The following costs were incurred on two recent
jobs:
Cost Item ................................................................... Job Pine-20 Job Birch-10

Direct materials:
Issued................................................................... $6,500 $8,000
Returned............................................................. 500 0
Indirect materials used ....................................... 500 400
Direct labor .............................................................. $9,000 $15,000
Direct labor rate ..................................................... $9 per hour $10 per hour
Overhead application rate ................................. $10 per direct labor hour $15 per direct labor hour
The company adds a 50% markup on cost in determining the amount to charge for each job.
Required: Prepare a schedule showing the cost and the amount to be charged for each job.
2.
Job Order Cost Sheet; Over- or Underapplied Overhead. During June, the following transactions took place at
the Cassandran Corp.
June 3 Purchased materials, $30,000.

5 Requisitioned materials from inventory, $20,000 (75% of these were direct; 25% were
indirect). Direct materials of $3,000 and indirect materials of $1,000 were for Job 00-1. The
remainder were for Job 00-2.
7 For Job 00-2, returned $150 of direct materials and $200 of indirect materials.
8 Recorded liabilities for payroll: direct labor, $15,000 and indirect labor, $5,000. Of the direct
labor cost, 60% was for Job 00-1; the remainder was for Job 00-2.
10 Incurred other factory overhead costs, $20,000 (all applicable to Jobs 00-1 and 00-2).
14 Applied overhead at the rate of 200% of direct labor cost to Jobs 00-1 and 00-2, which were
completed and transferred to finished goods account today.
Required: Assuming that Jobs 00-1 and 00-2 were the only jobs during the period and that all overhead (as
recorded above) is the total applicable overhead for these projects:
(1) Prepare a job order cost sheet for each job.

(2) Determine the difference between applied and actual overhead for the month.
3.
Job Order Cycle Entries. The following completed cost sheets were prepared for three jobs that were in
production during April in the Special Order Division of Byron Company:
Job 097 Job 781 Job 946

Direct materials.................................................................................................... $ 6,000 $2,700 $4,100
Direct labor ............................................................................................................ 9,200 7,300 8,200
Applied factory overhead ................................................................................ 6,900 5,475 6,120
Allowance for commercial expenses and profit .................................... 11,050 7,738 9,210
On April 1, Job 097 was 75% complete as to materials, labor, and overhead. It was finished during the month.
The other jobs were started and finished during the month. Jobs 097 and 946 were sold on account at the end
of the month.
Required: Prepare general journal entries to be recorded in April to accumulate these job costs for Work in
Process as well as for Finished Goods and for the sale of the two jobs.
PROBLEM
4.
Voyager Inc. produces customized vans in a job order shop. On November 1, the following balances appear in
the inventory records:
Finished goods ...................................................................................................................................................................... $179,000

Work in process ................................................................................................................................................................... 308,000
Materials.................................................................................................................................................................................. 83,000
The amount in Finished Goods represents $101,000 recorded for Van 175 and $78,000 recorded for Van 177.
The work in process account represents the three vans in process, as follows:
Van 179 Van 180 Van 181

Factory overhead ................................................................................................ $75,000 $50,000 $25,000
Direct labor ............................................................................................................ 60,000 40,000 20,000
Direct materials.................................................................................................... 26,000 7,000 5,000
The following transactions occurred during November:

(a) Purchased materials on account, $80,000.
(b) Requisitioned $60,000 of materials from inventory: $15,000 applied to Van 180, $25,000 to Van 181,
and $16,000 to Van 182, a new order; the balance was for indirect materials.
(c) Recorded the liability for the payroll and the labor cost distribution in a single entry: total payroll,
$208,750. Of the payroll cost, 10% applied to Van 179, 20% to Van 180, 35% to Van 181, 30% to Van
182, and the remainder to indirect labor.
(d) Paid the payroll.
(e) Applied factory overhead at the rate of 150% of direct labor cost.
(f) Completed Vans 179 and 180.
(g) Sold Vans 175, 177, and 180 at 50% over manufacturing costs.
Required: Prepare general journal entries to record these transactions.
5.
Manufacturing Costs. The work in process account of Meyers Company showed:
Work in Process
Materials $22,000 | Finished goods $68,000
Direct labor 37,000 |
Factory overhead 55,500 |
Materials charged to the one job still in process amounted to $5,000. Factory overhead is applied as a
predetermined percentage of direct labor cost.
Required: Compute the following:
(1) The amount of direct labor cost in finished goods.

(2) The amount of factory overhead in finished goods.
6.
Manufacturing Costs. Teddy Company is to submit a bid on the production of 5,500 vases. It is estimated that
the cost of materials will be $8,500, and the cost of direct labor will be $12,000. Factory overhead is applied
at 50% of direct labor cost in the Molding Department and at $7.50 per direct labor hour in the Finishing
Department. Of the above direct labor, it is estimated that 500 direct labor hours at a cost of $4,000 will be
required in Finishing. The company wishes a markup of 100% of its total production cost.
Required: Determine the following:
(1) Estimated cost to produce.

(2) Estimated prime cost.
(3) Estimated conversion cost.
(4) Bid price.
7.
Flow of Costs Through T Accounts. The Palmer Company had the following inventories at the beginning and
end of July:
July 1 July 31
Materials........................................................................................................................................... $20,000 $ 45,000
Work in process ............................................................................................................................ ? 185,000
Finished goods ............................................................................................................................... 65,000 115,000
During July, the cost of materials purchased was $160,000 and factory overhead of $125,000 was applied at a
rate of 75% of direct labor cost. July cost of goods sold was $240,000.
Required: Prepare completed T accounts showing the flow of the cost of goods manufactured and sold.Q

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Cost Item ................................................................... Job Pine-20 Job Birch-10

June 3 Purchased materials, $30,000.

(1) Prepare a job order cost sheet for each job.

Job 097 Job 781 Job 946

Finished goods ...................................................................................................................................................................... $179,000

Van 179 Van 180 Van 181

The following transactions occurred during November:

Required: Prepare general journal entries to record these transactions.

Required: Compute the following:

(1) The amount of direct labor cost in finished goods.

(1) Estimated cost to produce.

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