CACC

Job Order Costing
Exercises
1. Burnham Industries incurs the following costs for the month:
A. What is the prime cost?

B. What is the conversion cost?
2. Marzoni’s records show raw materials inventory had a beginning balance of $200 and an
ending balance of $300. If the cost of materials used during the month was $900, what were
the purchases made during the month?
3. Sterling’s records show the work in process inventory had a beginning balance of $4,000
and an ending balance of $3,000. How much direct labor was incurred if the records also
show:
4. Logo Gear purchased $2,250 worth of merchandise during the month, and its monthly
income statement shows cost of goods sold of $2,000. What was the beginning inventory if
the ending inventory was $1,000?
5. A company estimates its manufacturing overhead will be $750,000 for the next year. What
is the predetermined overhead rate given the following independent allocation bases?
A. Budgeted direct labor hours: 60,000
B. Budgeted direct labor expense: $1,500,000
C. Estimated machine hours: 100,000
6. Job order cost sheets show the following costs assigned to each job:
The company assigns overhead at $1.25 for each direct labor dollar spent. What is the total cost
for each of the jobs?
7. A new company started production. Job 10 was completed, and Job 20 remains in
production. Here is the information from job cost sheets from their first and only jobs so far:
Using the information provided,
A. What is the balance in work in process?
B. What is the balance in the finished goods inventory?
C. If manufacturing overhead is applied on the basis of direct labor hours, what is the
predetermined overhead rate?
8. K company production was working on Job 1 and Job 2 during the month. Of the $780 in
direct materials, $375 in materials was requested for Job 1. Direct labor cost, including
payroll taxes, are $23 per hour, and employees worked 18 hours on Job 1 and 29 hours on
Job 2. Overhead is applied at the rate of $20 per direct labor hours. Prepare job order cost
sheets for each job.
9. A company has the following transactions during the week.

 Purchase of $1,000 raw materials inventory
 Assignment of $500 of raw materials inventory to Job 5
 Payroll for 20 hours with $1,000 assigned to Job 5
 Factory utility bills of $750
 Overhead applied at the rate of $10 per hour
What is the cost assigned to Job 5 at the end of the week?
10. During the month, Job AB2 used specialized machinery for 450 hours and incurred $500 in
utilities on account, $300 in factory depreciation expense, and $100 in property tax on the
factory. Prepare journal entries for the following:
A. Record the expenses incurred.
B. Record the allocation of overhead at the predetermined rate of $1.50 per machine hour.
11. Job 113 was completed at a cost of $5,000, and Job 85 was completed at a cost of $3,000
and sold on account for $4,500. Prepare journal entries for the following:
A. Completion of Job 113.
B. Completion and sale of Job 85.
12. A company’s individual job sheets show these costs:
Overhead is applied at 1.25 times the direct labor cost. Use the data on the cost sheets to perform
these tasks:
A. Apply overhead to each of the jobs.
B. Prepare an entry to record the assignment of direct materials to work in process.
C. Prepare an entry to record the assignment of direct labor to work in process.
D. Prepare an entry to record the assignment of manufacturing overhead to work in process.
13. A summary of material requisition slips and time tickets, along with the overhead allocation,
show these costs:
A. Prepare an entry to record the assignment of direct material to work in process.

B. Prepare an entry to record the assignment of direct labor to work in process.
C. Prepare an entry to record the assignment of manufacturing overhead to work in process.
14. Abuah Goods manufactures clothing. For each item listed, identify whether it is a product
cost, a period cost, or not an expense.
A. pins to keep materials together while garment is being manufactured
B. real estate taxes on store
C. advertising expense
D. product inspector wages
E. shirts for sale
F. Chief Financial Officer salary
G. cost of goods sold
15. Choco’s Chocolates incurs these costs for the month:
A. What is the prime cost?

B. What is the conversion cost?

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Job Order Costing

A. What is the prime cost?

9. A company has the following transactions during the week.

12. A company’s individual job sheets show these costs:

A. Prepare an entry to record the assignment of direct material to work in process.

15. Choco’s Chocolates incurs these costs for the month:

A. What is the prime cost?

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