UNIVERSITY OF SANTO TOMAS
AMV-COLLEGE OF ACCOUNTANCY
COST ACCOUNTNG AND CONTROL
MMD
Problem A
Sound of Music Co. has a job order costing system. The following items appeared in the Work in
Process Inventory account during April, 2018:
April 1, 2018, balance $20,000
Materials placed into ?
production
Direct labor (4,000 hours) $120,000
Factory overhead applied $ 96,000
Cost of goods $400,000
manufactured
April 30, 2018, balance $ 16,000
Sound of Music applies overhead to production on the basis of direct labor hours. Job XX, the only job in
process on April 30, has been charged $10,600 materials cost and has 100 labor hours of direct labor time
assigned to it.
Required:
a. Determine the predetermined factory overhead rate for Sound of Thunder Company.
b. Determine the amounts of materials, direct labor, and factory overhead included in the April 30, 2018,
work in process.
c. Determine the amount of materials placed into production during April 2018.
ANSWER: a. Factory overhead rate = $96,,000 =
$24 per direct labor hour
b. Costs assigned to Job XX:
materials $10,600
direct labor (100 × $30*) = 3,000
factory overhead applied (100 × $24) = 2,400
work in process, April 30, 2018 = $16,000
* $120, = $30 per hour
c. $X + $120,000 + $96,000 + $20,000 − $16,000 = $400,000 X = $180,000
Problem B
Matriarch Incorporated uses a job-order costing system and a predetermined overhead rate based
on machine hours. At the beginning of the year, the company estimated manufacturing overhead
for the year would be $240,000 and machine hours would be 8,000. The following information
pertains to November of the current year: Job 10
J 10 J11 J12 Total
WIP 11-1 $16,000 $26,000 $38,000 $80,000
November production activity:
Materials $ 4,000 $ 4,800 $ 7,200 $16,000
requisitioned
DL cost $ 2,400 $ 3,600 $ 4,000 $10,000
, Actual manufacturing overhead cost incurred in November was $61,000.
Required:
a. Compute the predetermined overhead application rate.
b. Determine the total cost associated with each job.
c. If jobs 10 and 12 were completed, prepared the journal entry to move the cost.
d. If job 10 was delivered to customers that paid $50,000 cash, prepare the journal
entries. What is the gross profit for job 10?
e. Assuming no beginning work in process, what is the cost assigned to ending work
in process?
f. Assuming no beginning finished goods what is the cost assigned to ending finished
goods? g. How much was overhead over/underapplied?
ANSWER: a. $240,,000 = $30
b. Job 10 Job 11 Job 12 Total
Work-in- $16,000 $26,000 $38,000 $80,000
process, Nov.
1
November production activity:
Materials $ 4,000 $ 4,800 $ 7,200 $16,000
requisitioned
Direct labor $ 2,400 $ 3,600 $ 4,000 $10,000
cost
Overhead applied:
Machine hours
400 × $30 12,000
700 × $30 $21,000
900 × $30 $27,000
Total 34,400 55,400 76,200
c. Finished goods $110,600
Work in process $110,600
job 10 + job 12 = 34,400 + 76,200 = $110,600 (the cost of goods manufactured)
d. record a sale
Cash $50,000
Sales $50,000
Cost of goods sold $34,400
Finished
goods 34,400
Sales
$50,000
CGS 34,400
Gross Profit $15,600
g. Actual overhead $61,000
Applied overhead (12,000 + 21,000 + 27,000 ) =
$60,000
Underapplied overhead $ 1,000
AMV-COLLEGE OF ACCOUNTANCY
COST ACCOUNTNG AND CONTROL
MMD
Problem A
Sound of Music Co. has a job order costing system. The following items appeared in the Work in
Process Inventory account during April, 2018:
April 1, 2018, balance $20,000
Materials placed into ?
production
Direct labor (4,000 hours) $120,000
Factory overhead applied $ 96,000
Cost of goods $400,000
manufactured
April 30, 2018, balance $ 16,000
Sound of Music applies overhead to production on the basis of direct labor hours. Job XX, the only job in
process on April 30, has been charged $10,600 materials cost and has 100 labor hours of direct labor time
assigned to it.
Required:
a. Determine the predetermined factory overhead rate for Sound of Thunder Company.
b. Determine the amounts of materials, direct labor, and factory overhead included in the April 30, 2018,
work in process.
c. Determine the amount of materials placed into production during April 2018.
ANSWER: a. Factory overhead rate = $96,,000 =
$24 per direct labor hour
b. Costs assigned to Job XX:
materials $10,600
direct labor (100 × $30*) = 3,000
factory overhead applied (100 × $24) = 2,400
work in process, April 30, 2018 = $16,000
* $120, = $30 per hour
c. $X + $120,000 + $96,000 + $20,000 − $16,000 = $400,000 X = $180,000
Problem B
Matriarch Incorporated uses a job-order costing system and a predetermined overhead rate based
on machine hours. At the beginning of the year, the company estimated manufacturing overhead
for the year would be $240,000 and machine hours would be 8,000. The following information
pertains to November of the current year: Job 10
J 10 J11 J12 Total
WIP 11-1 $16,000 $26,000 $38,000 $80,000
November production activity:
Materials $ 4,000 $ 4,800 $ 7,200 $16,000
requisitioned
DL cost $ 2,400 $ 3,600 $ 4,000 $10,000
, Actual manufacturing overhead cost incurred in November was $61,000.
Required:
a. Compute the predetermined overhead application rate.
b. Determine the total cost associated with each job.
c. If jobs 10 and 12 were completed, prepared the journal entry to move the cost.
d. If job 10 was delivered to customers that paid $50,000 cash, prepare the journal
entries. What is the gross profit for job 10?
e. Assuming no beginning work in process, what is the cost assigned to ending work
in process?
f. Assuming no beginning finished goods what is the cost assigned to ending finished
goods? g. How much was overhead over/underapplied?
ANSWER: a. $240,,000 = $30
b. Job 10 Job 11 Job 12 Total
Work-in- $16,000 $26,000 $38,000 $80,000
process, Nov.
1
November production activity:
Materials $ 4,000 $ 4,800 $ 7,200 $16,000
requisitioned
Direct labor $ 2,400 $ 3,600 $ 4,000 $10,000
cost
Overhead applied:
Machine hours
400 × $30 12,000
700 × $30 $21,000
900 × $30 $27,000
Total 34,400 55,400 76,200
c. Finished goods $110,600
Work in process $110,600
job 10 + job 12 = 34,400 + 76,200 = $110,600 (the cost of goods manufactured)
d. record a sale
Cash $50,000
Sales $50,000
Cost of goods sold $34,400
Finished
goods 34,400
Sales
$50,000
CGS 34,400
Gross Profit $15,600
g. Actual overhead $61,000
Applied overhead (12,000 + 21,000 + 27,000 ) =
$60,000
Underapplied overhead $ 1,000
