JOB ORDER COSTING Practice Set
JOB ORDER COSTING Practice Set
JOB ORDER COSTING Practice Set
1. Which of the following statements concerning the comparison among actual cosring,
normal costing and standard costing is correct?
a. Actual costing system values manufactured products with the actual material costs,
actual direct labor costs, and actual manufacturing overhead costs.
b. Normal costing system values manufactured products with the actual material costs,
actual direct labor costs and manufacturing overhead based on a predetermined
manufacturing overhead rate with the possible over/under application of factory
overhead to be closed to costs of goods sold only if insignificant or to be closed
prorated to cost of goods sold, work in process and finished goods inventory if
significant.
2. When shall the job order costing be used instead of process costing?
a. When the production process performs standardized or uniform procedures.
b. When the company performs a very long production runs.
c. When the company intends to use it for billing customers.
d. When the company produces low-value and homogeneous products
Problem 1. MLB Inc. is employing normal costing for its job orders. The overhead is applied
using a predetermined overhead rate. The following information relates to MLB Inc. for the
year ended December 31, 2020:
Additional information:
Required:
1. Total Manufacturing Cost for 2020
2. Cost of Goods Manufactured for 2020
3. Cost of Goods Sold for 2020
4. Gross Profit for 2020
5. Work in Process and Finished Goods on December 31, 2020.
Required:
1. Under/ Over applied overhead
2. Cost of Goods Sold at the end of the year.
3. Cost of Goods Sold reported in the FS.
Problem 3. Nike Inc. has completed the Job 101, containing 1, 100 shoes, during 2020 at the
following unit costs:
Problem 4. For the year ended December 31, 2020, UA Inc. incurred the following costs on Job
Order 201 for manufacturing of 500 units:
Original cost accumulation:
Direct Materials 500,000
Direct Labor 400,000
Factory Overhead 100,000
Required:
1. Cost per unit of Job Order 201 if the rework cost were attributable to the exacting
specification of Job Order 201
2. Cost per unit of Job Order 201 if the rework cost were attributable to internal failure