MS-05 JOB ORDER COSTING
1. The Dougherty Furniture Company manufactures tables. In March, the two production departments had
budgeted allocation bases of 4,000 machine-hours in Department 100 and 8,000 direct manufacturing
labor-hours in Department 200. The budgeted manufacturing overheads for the month were P57,500 and
P62,500, respectively. For Job A, the actual costs incurred in the two departments were as follows:
Department 100 Department 200
Direct materials purchased on account P110,000 P177,500
Direct materials used 32,500 13,500
Direct manufacturing labor 52,500 53,500
Indirect manufacturing labor 11,000 9,000
Indirect materials used 7,500 4,750
Lease on equipment 16,250 3,750
Utilities 1,000 1,250
Job A incurred 800 machine-hours in Department 100 and 300 manufacturing labor-hours in Department
200. The company uses a budgeted overhead rate for applying overhead to production.
Required:
a. Determine the budgeted manufacturing overhead rate for each department.
b. Prepare the necessary journal entries to summarize the March transactions for Department 100.
c. What is the total cost of Job A?
2. ADAMS Co. uses a job order costing system and the following information is available from its records.
The company has 3 jobs in process: #5, #8 and #12.
Raw materials used P 120, 000
Direct labor per hour P 8.50
Overhead applied based on direct labor cost 120%
Direct material was requisitioned as follows for each job respectively: 30%, 25% and 25%; the balance of
the requisitions was considered indirect. Direct labor hours per job are 2, 500; 3, 100 and 4, 200;
respectively. Indirect labor is P 33, 000. Other actual overhead costs totaled P 36, 000.
1. Refer to ADAMS Co., what is the prime cost of Job #5?
2. Refer to ADAMS Co., what is the total amount of overhead applied to Job #8?
3. Refer to ADAMS Co., what is the total amount of actual overhead?
4. Refer to ADAMS Co., how much overhead is applied to Work in Process?
5. Refer to ADAMS Co., if Job #12 is completed and transferred, what is the balance in the Work in Process
Inventory at the end of the period if overhead is applied at the end of the period?
6. Refer to ADAMS Co., assume the balance in Work in Process Inventory was P 18, 500 on June 1 and P 25,
297 on June 30. The balance on June 30 represents one job that contains direct material of P 11, 250. How
many direct labor hours have been worked on this job (rounded to the nearest hour)?
3. The following account balances and other information for Barfield Company pertain to November operations:
Account balances
1-Nov 30-Nov
Finished Goods P 70, 000 P 60, 000
Work in Process 50, 000 ?
Direct Materials 10, 000 25, 000
Accounts payable ? 15, 000
Accrued payroll 10, 000 20, 000
Accumulated depreciation-factory
equipment 80, 000 90, 000
Other information:
a. Direct materials purchased on account during November, P 50, 000.
b. Rebecca Company applies factory overhead at a predetermined rate of P 3 per direct labor hour.
c. During November, direct labor employees worked 25, 000 hours at a rate of P 4 per hour.
d. Jobs 385, 386 and 387 were still in process at the end of November. A total of P 5, 000 of direct
materials has been worked on these three jobs. To date, 5, 000 direct labor hours have been worked on
these jobs.
e. The accrued payroll account is used for factory employees only. Assuming no payroll deductions,
payment to factory employees during the month totaled P 140, 000.
f. Factory overhead was underapplied by P 5, 000.
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