Exercise 1

Requirement 1
a Actual direct cost rate = P58.00 per professional labor-hour (given) Summary:
Actual indirect cost rate = 744,000.00 = 48.00 per professional labor-hour
15,500.00
b Normal costing - direct cost = 960,000.00 = 60.00 per professional labor-hour Direct cost rate
16,000.00 Indirect cost rate
Normal costing - indirect cost = 720,000.00 = 45.00 per professional labor-hour
16,000.00

Requirement 2

Direct cost rate

Indirect cost rate
Total job cost

All these costing systems use the actua

budgeted 110 hours for the Montreal E
Chips may have used the 110 hours nu
The actual costing figure of P12,720 ex
because the actual indirect cost rate (P
(P45). The normal costing figure of P12
figure of P12,600, because the actual d
direct cost rate (P60).
 Actual Normal Extended
Costing Costing Normal Costing
58.00 58.00 60.00
48.00 45.00 45.00

Actual Normal Extended

Costing Costing Normal Costing
6,960.00 6,960.00 7,200.00
5,760.00 5,400.00 5,400.00
12,720.00 12,360.00 12,600.00

se costing systems use the actual professional labor time of 120 hours. The
ted 110 hours for the Montreal Expos job is not used in job costing. However,
may have used the 110 hours number in bidding for the audit.
ctual costing figure of P12,720 exceeds the normal costing figure of P12,360,
se the actual indirect cost rate (P48) exceeds the budgeted indirect cost rate
The normal costing figure of P12,360 is less than the extend normal costing
of P12,600, because the actual direct cost rate (P58) is less than budgeted
cost rate (P60).
Exercise 2

Requirement 1
The direct materials and direct labor costs listed in the exercise would have been recorded on four different documents:
- the materials requisition form for Job KC123,
- the time ticket for Kristine,
- the time ticket for Clarisse, and
- the job cost sheet for Job KC123.

Requirement 2
The costs for Job KC123 would have been recorded as follows:

Materials requisition form:

Quantity Unit Cost Total Cost
Blanks 40.00 80.00 3,200.00
Nibs 960.00 6.00 5,760.00
8,960.00

Time ticket for Kristine: Time Job

Started Ended Completed Rate Amount Number
9:00 AM 12:15 PM 3.25 120.00 390.00 KC123

Time ticket for Clarisse: Time Job

Started Ended Completed Rate Amount Number
2:15 PM 4:30 PM 2.25 140.00 315.00 KC123

Job Cost Sheet for Job KC123:

Direct materials 8,960.00
Direct labor:
Kristine 390.00
Clarisse 315.00
Total 9,665.00
rent documents:
Exercise 3

Requirement 1 Company X - DLH Company Y - MH

Predetermined overhead rates:
Estimated total manufacturing overhead cost 432,000.00 = 7.20 per DLH 270,000.00 = 3.00
Estimated total amount of the allocation base 60,000.00 90,000.00

Requirement 2 - 58,000 actual labor hours for Company X:

Actual overhead costs incurred 420,000 Total actual hours:
Overhead cost applied to Work in Process: Job 237 7,000
58,000 × P7.20 per hour 417,600 Job 238 30,000
Underapplied overhead cost . 2,400 Job 239 21,000
58,000

Requirement 3 - 150,000 actual machine hours for Company Y:

Actual overhead costs incurred 420,000
Overhead cost applied to Work in Process:
150,000 × P3.00 per hour 450,000
Overapplied overhead cost . (30,000.00)

Requirement 4 - actual materials cost P300,000 for Company Z:

Actual overhead costs incurred 420,000
Overhead cost applied to Work in Process:
300,000 × 160% of materials cost 480,000
Overapplied overhead cost . (60,000.00)
ompany Y - MH Company Z - RMC

per MH 384,000.00 = 160% per MC

240,000.00
Langston Tool uses job order cost accumulation and applies overhead based on direct labor hours. Any underapplie
Cost of Goods Sold at the end of each month. On April 1, job cost sheets indicated the following:
Job 201 Job 202 Job 203 Job 204
Direct materials 3,590 2,000 1,480 2,000
Direct labor 2,700 1,500 1,000 1,200
Applied overhead 2,160 1,200 800 960
Total cost 8,450 4,700 3,280 4,160
Job status Finished In process In process In process
During April, Langston continued working on Jobs 202, 203 and 204, and started work on Jobs 205, 206 and 207. T
Job 202 Job 203 Job 204 Job 205 Job 206 Job 207
Direct materials 1,250 555 970 2,500 1,980 2,450
Direct labor 100 75 50 105 50 95
Other information:
a. On April 30, the jobs still in process were 203 and 206.
b. On April 30, the finished goods contained only jobs 204 and 207.
c. All workers are paid P20 per hour. Wage rates are stable throughout the year.
d. Langston maintains only one raw materials account (Materials Control) from which it uses both direct and indirect
e. All sales are billed on account at 150% of total cost.
f. Other items in April:
Depreciation, factory equipment 1,375
Raw materials purchased 11,500
Indirect labor 2,500
Factory rent and utilities 2,700
Indirect materials used 2,790
Required: On sheet P1A, prepare a schedule showing computations for the following costs in April.
1. Direct materials issued to production.
2. Direct labor cost incurred.
3. Applied factory overhead charged to production
4. Total manufacturing cost..
5. Work in process, April 1.
6. Cost of goods manufactured.
7. Cost of goods sold (normal)
8. The overapplied or underapplied factory overhead.
9. Sales price of goods sold.
10. Cost of goods sold (actual).
abor hours. Any underapplied or overapplied overhead is adjusted directly to

n Jobs 205, 206 and 207. The above jobs showed the following information during April:

ses both direct and indirect materials. The balance in this account was P2,750 on April 1.
Problem 1

Predetermined overhead rate based on DL:

Job 201 Job 202 Job 203 Job 204
Overhead 2,160 1,200 800 960
Direct labor 2,700 1,500 1,000 1,200
FOH rate based on the DLCost 80% 80% 80% 80%

Job 201 Job 202 Job 203 Job 204 Job 205 Job 206 Job 207 Total
Direct materials 1,250 555 970 2,500 1,980 2,450 9,705
Direct labor 2,000 1,500 1,000 2,100 1,000 1,900 9,500
Applied overhead 1,600 1,200 800 1,680 800 1,520 7,600
Total manufacturing cost 4,850 3,255 2,770 6,280 3,780 5,870 26,805
Add: Work in process, beg. 4,700 3,280 4,160 0 0 0 12,140
Total cost of good in process 9,550 6,535 6,930 6,280 3,780 5,870 38,945
Less: Work in process, end. 0 (6,535) 0 0 (3,780) 0 (10,315)
Cost of goods manufactured 9,550 6,930 6,280 5,870 28,630
Add: Finished goods, beg. 8,450 0 0 0 0 8,450
Cost of goods available for sale 8,450 9,550 6,930 6,280 5,870 37,080
Less: Finished goods, end. 0 0 (6,930) 0 (5,870) (12,800)
CGS - normal 8,450 9,550 6,280 24,280
Add: under-applied FOH 1,765
CGS - actual 26,045
Sales price 12,675 14,325 9,420

1. Direct materials issued to production. 9,705

2. Direct labor cost incurred. 9,500
3. Applied factory overhead charged to production 7,600
4. Total manufacturing cost.. 26,805
5. Work in process, April 1. 12,140
6. Cost of goods manufactured. 38,945
7. Cost of goods sold (normal) 24,280
8. The overapplied or underapplied factory overhead 1,765 under-applied
9. Sales price of goods sold. 12,675 14,325 9,420
10. Cost of goods sold (actual). 26,045
COST OF GOODS SOLD STATEMENT

Direct materials used

Raw materials, beg. 2,750
Cost of materials purchased 11,500
Materials available for use 14,250
Less: Raw materials, end. 2,045
Indirect materials used 2,500 4,545 9,705
Direct labor 9,500
Factory overhead 7,600
Total manufacturing cost 26,805
Add: Work in process, beg. 12,140
Total cost of good in process 38,945
Less: Work in process, end. (10,315)
Cost of goods manufactured 28,630
Add: Finished goods, beg. 8,450
Cost of goods available for sale 37,080
Less: Finished goods, end. (12,800)
Cost of goods sold - normal 24,280
Add: under-applied FOH 1,765
Cost of goods sold - actual 26,045

Computation of un-applied FOH:

Actual FOH
Depreciation, factory equipment 1,375
Indirect labor 2,500
Factory rent and utilities 2,700
Indirect materials used 2,790 9,365
Applied FOH 7,600
Under-applied FOH 1,765
Trooper Inc. had the following inventories on March 1:
Finished goods P15,000
Work in process 19,070
Materials 14,000
The work in process account controls three jobs:
Job 621 Job 622 Job 623 Total
Materials P2,800 P3,400 P1,800 P8,000
Labor 2,100 2,700 1,350 6,150
Applied factory overhead 1,680 2,160 1,080 4,920
Total P6,580 P8,260 P4,230 P19,070
The following information pertains to March operations:
a. Materials purchased and received cost P22,000 at terms n/30.
b. Materials requisitioned for production cost P21,000. Of this amount, P2,400 was for indirect materials; the differen
c. Materials returned to the storeroom from the factory totaled P600, of which P200 was for indirect materials, the ba
d. Materials returned to vendors totaled P800.
e. Payroll of P38,000 was accrued in March.
f. Of the payroll, direct labor represented 55%; indirect labor, 20%; sales salaries, 15%; and administrative salaries,
P8,160 to Job 622; and P6,320 to Job 623.
g. Factory overhead, other than previously mentioned, amounted to P9,404.50. Included in this figure were P2,000 f
P250 for expired insurance on the factory. The remaining overhead, P7,154.50, was unpaid at the end of March
h. Factory overhead at the end of March was applied to production at a rate of 80% of the direct labor cost to be cha
i. Jobs 621 and 622 were completed and transferred to the finished goods warehouse.
j. Both Jobs 621 and 622 were sold on account at a gross profit of 40% of the cost of goods sold (normal).
k. Cash collections from accounts receivable during March were P69,450.
Required: Do these on the P2 sheets:
1-2 Prepare the necessary journal entries and if necessary post entries to the respective job order cost sheets.
3-4 Post the entries to the general ledger and prepare a summary of the job order cost sheets showing computation
a. Materials available for use
b. Indirect materials used
c. Materials inventory, 3/31
d. Direct materials used
e. Direct labor cost
f. Applied factory overhead
g. Total manufacturing cost
h. Total work in process
i. Cost of goods manufactured
j. Cost of goods available for sale
k. Cost of goods sold
l. Total sales for March.
m. Gross profit for March.
n. Over/under applied overhead
o. Actual cost of goods sold
5 Prepare the statement of cost of goods manufactured and the income statement of Trooper Inc.
for indirect materials; the difference was distributed: P5,300 to Job 621; P7,400 to Job 622; and P5,900 to Job 623.
was for indirect materials, the balance from Job 622.

5%; and administrative salaries, 10%. The direct labor cost was distributed: P6,420 to Job 621;

uded in this figure were P2,000 for depreciation of factory building and equipment and
, was unpaid at the end of March.
of the direct labor cost to be charged to the three jobs, based on the direct labor cost for March.

of goods sold (normal).

ective job order cost sheets.

cost sheets showing computation of the following:

nt of Trooper Inc.
00 to Job 623.
Problem 2 - requirements 1 & 2:

Requirement 1: Requirement 2:
a Materials inventory 22,000.00
Accounts payable 22,000.00 JOCS Summary Job 621
b Work in process 18,600.00 Materials issued 5,300.00
Manufacturing overhead 2,400.00 Less: Returned to stockroom 0.00
Materials inventory 21,000.00 Direct materials used 5,300.00
c Materials inventory 600.00 Direct labor cost 6,420.00
Work in process 400.00 Applied factory overhead 5,136.00
Manufacturing overhead 200.00 Total manufacturing cost 16,856.00
d Accounts payable 800.00 Add: Work in process, beg. 6,580.00
Materials inventory 800.00 Total cost of goods in process 23,436.00
e Payroll 38,000.00 Less: Work in process, end. 0.00
Accrued payroll 38,000.00 Cost of goods manufactured 23,436.00
f Work in process 20,900.00
Manufacturing overhead 7,600.00
Sales salaries 5,700.00
Administrative salaries 3,800.00
Payroll 38,000.00
g Manufacturing overhead 9,404.50
Accumulated depreciation 2,000.00
Prepaid insurance 250.00
Accounts payable 7,154.50
h Work in process 16,720.00
Applied manufacturing overhead 16,720.00
i Finished goods 53,384.00
Work in process 53,384.00
j Cost of goods sold 53,384.00
Finished goods 53,384.00
Accounts receivable 74,737.60
Sales 74,737.60
k Cash 69,450.00
Accounts receivable 69,450.00

To close the applied MOH to Cost of Goods Sold:

Applied manufacturing overhead 16,720.00
Under-applied FOH / CGS 2,484.50
Manufacturing overhead 19,204.50
Job 622 Job 623 Total
7,400.00 5,900.00 18,600.00
(400.00) 0.00 (400.00)
7,000.00 5,900.00 18,200.00
8,160.00 6,320.00 20,900.00
6,528.00 5,056.00 16,720.00
21,688.00 17,276.00 55,820.00
8,260.00 4,230.00 19,070.00
29,948.00 21,506.00 74,890.00
0.00 (21,506.00) (21,506.00)
29,948.00 0.00 53,384.00
Problem 2 - requirements 3 & 4:

Debit Credit Balance

Cash 69,450.00 69,450.00

Accounts receivable 74,737.60 74,737.60

Accounts receivable 69,450.00 5,287.60

Beginning balance 15,000.00 15,000.00

Finished goods 53,384.00 68,384.00
Finished goods 53,384.00 15,000.00

Beginning balance 19,070.00 19,070.00

Work in process 18,600.00 37,670.00
Work in process 20,900.00 58,570.00
Work in process 16,720.00 75,290.00
Work in process 400.00 74,890.00
Work in process 53,384.00 21,506.00

Beginning balance 14,000.00 14,000.00

Materials inventory 22,000.00 36,000.00
Materials inventory 600.00 36,600.00
Materials inventory 21,000.00 15,600.00
Materials inventory 800.00 14,800.00

Prepaid insurance 250.00 250.00

Accumulated depreciation 2,000.00 2,000.00

Accounts payable 7,154.50 7,154.50

Accounts payable 22,000.00 29,154.50
Accounts payable 800.00 28,354.50

Accrued payroll 38,000.00 38,000.00

Sales 74,737.60 74,737.60

Cost of goods sold 53,384.00 53,384.00

Administrative salaries 3,800.00 3,800.00

Sales salaries 5,700.00 5,700.00

Payroll 38,000.00 38,000.00
Payroll 38,000.00 0.00

Manufacturing overhead 2,400.00 2,400.00

Manufacturing overhead 7,600.00 10,000.00
Manufacturing overhead 9,404.50 19,404.50
Manufacturing overhead 200.00 19,204.50
Manufacturing overhead 19,204.50 0.00

Applied manufacturing overhead 16,720.00 16,720.00

Applied manufacturing overhea 16720 0.00
Problem 2 - requirements 5:

Trooper Inc. Trooper Inc.

Cost of Goods Manufactured Statement Income Statemen
For the year month ended March 2022 For the year month ended M

Direct materials used Sales

Raw materials, beg. 14,000.00 Cost of goods sold
Cost of materials purchased 21,200.00
Materials available for use 35,200.00
Less: Raw materials, end. 14,800.00
Indirect materials used 2,200.00 17,000.00 18,200.00
Direct labor cost 20,900.00
Factory overhead 16,720.00
Total manufacturing cost 55,820.00 Gross profit
Add: Work in process, beg. 19,070.00 Less: Operating expenses
Total cost of good in process 74,890.00
Less: Work in process, end. (21,506.00)
Cost of goods manufactured 53,384.00 Net profit
 Trooper Inc.
Income Statement
For the year month ended March 2022

74,737.60
Cost of goods sold
Cost of goods manufactured 53,384.00
Add: Finished goods, beg. 15,000.00
Cost of goods available for sal 68,384.00
Less: Finished goods, end. (15,000.00)
Cost of goods sold - normal 53,384.00
Add: under-applied FOH 2,484.50 55,868.50
Gross profit 18,869.10
Less: Operating expenses
Sales salaries 3,800.00
Admin salaries 5,700.00 9,500.00
Net profit 9,369.10