UAP-COST ACCOUNTING ASSIGNMENT:

1. You are asked to bring the following incomplete accounts of Ticker Printing Inc. up to
date through January 31, 2001. Consider the data that appear in the T-accounts as
well as additional information given in items (a) through (i).

Ticker’s job order costing system has two direct cost categories (direct material and
direct manufacturing labor) and one indirect cost pool (manufacturing overhead,
which is allocated using direct manufacturing labor costs).

Materials Inventory Control Wages Payable Control

12/31/2000 1/31/2001
Balance 15,000 Balance 3,000

Manufacturing Department
Work in Process Inventory Control Overhead Control
January 2001
Charges 57,000

Manufacturing Overhead Control

Finished Goods Inventory Control Cost of Goods Sold

12/31/2000
Balance 20,000

Additional Information:
a. Manufacturing department overhead is allocated using a budgeted rate set
every December. Management forecasts next year’s overhead and next year’s
direct manufacturing labor costs. The budget for 2001 is $400,000 of direct
manufacturing labor and $600,000 of manufacturing overhead.
b. The only job unfinished on January 31, 2001 is No. 419, on which direct
manufacturing labor costs are $2,000 (125 direct manufacturing labor hours)
and direct material costs are $8,000.
c. Total material placed into production during January is $90,000.
d. Cost of goods completed during January is $180,000.
e. Material inventory as of January 31, 2001 is $20,000.
f. Finished goods inventory as of January 31, 2001 is $15,000.
g. All plant workers earn the same wage rate. Direct manufacturing labor hours
for January totals 2,500. Other labor and supervision totals $10,000.
h. The gross plant payroll on January paydays totals $52,000. Ignore
withholdings. All personnel are paid on a weekly basis.
i. All “actual” manufacturing department overhead incurred during January has
already been posted.
Required:
a. Material purchased during January
b. Cost of Goods Sold during January
c. Direct Manufacturing Labor Costs incurred during January
d. Manufacturing Overhead Allocated during January
 e. Balance, Wages Payable Control, December 31, 2000
f. Balance, Work in Process Inventory Control, January 31, 2001
g. Balance, Work in Process Inventory Control, December 31, 2000
h. Balance, Finished Goods Inventory Control, January 31, 2001
i. Manufacturing Overhead underapplied or overapplied for January

2. The Smith Company manufactures special purpose machines to order. On 1/1/2001 there
were two jobs in process, 405 and 406. The following costs were applied to them in
2000:

Job No.
405 406
Direct material $ 5,000 $ 8,000
Direct labor 4,000 3,000
Overhead 4,400 3,300
Total $13,400 $14,300

During January of 2001, the following transactions took place:

* Raw material costing $40,000 was purchased on account.

* Jobs #407, 408, and 409 were started and the following costs were applied to
them:

JOB
407 408 409
Direct materials $3,000 $10,000 $ 7,000
Direct labor 5,000 6,000 4,000

* Job $405 and Job #406 were completed after incurring additional direct labor
costs of $2,000 and $4,000, respectively
* Wages paid to production employees during January totaled $25,000.
* Depreciation for the month of January totaled $10,000.
* Utilities bills in the amount of $10,000 were paid for December 2000
operations.
* Utilities bills totaling $12,000 were received for January operations.
* Supplies costing $2,000 were used.
* Miscellaneous overhead expenses totaled $24,000 for January.

Actual overhead is applied to individual jobs at the end of each month using a rate
based on actual direct labor costs.

Required:

a. Determine the January 2001 overhead rate.

b. Determine the cost of each job
c. Prepare a statement of cost of goods manufactured.

3. Fred Company employs a job order costing system. Only three jobs—Job #105, Job #106,
and Job #107—were worked on during November and December. Job #105 was
completed December 10; the other two jobs were still in production on December 31,
the end of the company’s operating year. Job cost sheets on the three jobs follow:
 Job Cost Sheet
Job #105 Job #106 Job #107
November costs incurred:
Direct material $16,500 $ 9,300 $ —
Direct labor 13,000 7,000 —
Manufacturing overhead 20,800 11,200 —

December cost incurred:

Direct materials — 8,200 21,300
Direct labor 4,000 6,000 10,000
Manufacturing overhead ? ? ?

The following additional information is available:

a. Manufacturing overhead is assigned to jobs on the basis of direct labor cost.

b. Balances in the inventory accounts at November 30 were as follows:

Raw Material $40,000

Work in Process ?
Finished Goods 85,000
Required:

a. Prepare T-accounts for Raw Material, Work in Process Inventory, Finished

Goods Inventory, and Manufacturing Overhead Control. Enter the November
30 inventory balances given previously; in the case of Work in Process
Inventory, compute the November 30 balance and enter it into the Work in
Process Inventory T-account.

b. Prepare journal entries for December as follows:

1. Prepare an entry to record the issue of materials into production and

post the entry to appropriate T-accounts. (In the case of direct
material, it is not necessary to make a separate entry for each job.)
Indirect materials used during December totaled $4,000.

2. Prepare an entry to record the incurrence of labor cost and post the
entry to appropriate T-accounts. (In the case of direct labor, it is not
necessary to make a separate entry for each job.) Indirect labor cost
totaled $8,000 for December.

3. Prepare an entry to record the incurrence of $19,000 in various actual

manufacturing overhead costs for December (credit Accounts
Payable).

c. What apparent predetermined overhead rate does the company use to assign
overhead cost to jobs? Using this rate, prepare a journal entry to record the
application of overhead cost to jobs for December (it is not necessary to make
a separate entry for each job). Post this entry to appropriate T-accounts.
 d. As stated earlier, Job #105 was completed during December. Prepare a
journal entry to show the transfer of this job off of the production line and into
the finished good warehouse. Post the entry to appropriate T-accounts.

e. Determine the balance at December 31 in the Work in Process inventory

account. How much of this balance consists of the cost of Job #106? Job
#107?
4. C Co. uses a job order costing system. During April 2001, the following costs
appeared in the Work in Process Inventory account:

Beginning balance $ 24,000

Direct material used 70,000
Direct labor incurred 60,000
Applied overhead 48,000
Cost of goods manufactured 185,000

C Co. applies overhead on the basis of direct labor cost. There was only one job left in
WIP Inventory at the end of April which contained $5,600 of overhead. What amount
of direct material was included in this job?

5. Q Co. is a print shop that produces jobs to customer specifications. During January
2001, Job #1253 was worked on and the following information is available:
Direct material used $2,500
Direct labor hours worked 15
Machine time used 6
Direct labor rate per hour $7
Overhead application rate per
hour of machine time $18

What was the total cost of Job #1253 for January?

Use the following information for questions 6–8.

Ark Co. uses a job order costing system. At the beginning of January, the company had 2
jobs in process with the following costs:

Direct Material Direct Labor Overhead

Job #456 $3,400 $510 $255
Job #461 1,100 289 ?

Ark pays its workers $8.50 per hour and applies overhead on a direct labor hour basis.

6. What is the overhead application rate per direct labor hour?

7. How much overhead was included in the cost of Job #461 at the beginning of
January?
8. During January, Ark employees worked on Job #479. At the end of the month, $714
of overhead had been applied to this job. Total Work in Process Inventory at the end
of the month was $6,800 and all other jobs had a total cost of $3,981. What amount of
direct material is included in Job #479?
9. Black Corp. manufactures products on a job order basis. The job cost sheet for Job
#329 shows the following for March:

Direct material $5,000

Direct labor (100 hours @ $7.25) $725
Machine hours incurred 40
Predetermined overhead rate per
machine hour $26
At the end of March, what total cost appears on the job cost sheet for Job #329?

10. Products at Green Manufacturing are sent through two production departments:
Fabricating and Finishing. Overhead is applied to products in the Fabricating Dept.
based on 150 percent of direct labor cost and $18 per machine hour in Finishing. The
following information is available about Job #639:

Fabricating Finishing
Direct material $1,590 $580
Direct labor cost ? 48
Direct labor hours 22 6
Machine hours 5 15
Overhead applied 429 ?

What is the total cost of Job #639?

11. Carolina Co. applies overhead to jobs at the rate of 40 percent of direct labor cost.
Direct material of $1,250 and direct labor of $1,400 were expended on Job #44 during June.
At May 31, the balance of Job #44 was $2,800. The June 30th balance is
Use the following information for questions 12–17.

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 material used $120,000

Direct labor per hour $8.50
Overhead applied based on
direct labor cost 120%

Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent,
and 25 percent; 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 $33,000. Other actual overhead
costs totaled $36,000.

12. What is the prime cost of Job #5?

13. What is the total amount of overhead applied to Job #8?
14. What is the total amount of actual overhead?
15. How much overhead is applied to Work in Process?
16. If Job #12 is completed and transferred, what is the balance in Work in Process
Inventory at the end of the period if overhead is applied at the end of the period?

17. Assume the balance in Work in Process Inventory was $18,500 on June 1 and
$25,297 on June 30. The balance on June 30 represents one job that contains direct
material of $11,250. How many direct labor hours have been worked on this job
(rounded to the nearest hour)?
 Use the following information for questions 18–21.

The following information pertains to XYZ Co. for September 2001.

Direct Material Direct Labor Overhead

Job #123 $3,200 $4,500 ?
Job #125 ? 5,000 ?
Job #201 5,670 ? $5,550

XYZ Co. applies overhead for Job #123 at 140 percent of direct labor cost and at 150 percent
of direct labor cost for Jobs #125 and #201. The total cost of Jobs #123 and #125 is identical.

18. What amount of overhead is applied to Job #123?

19. What amount of overhead is applied to Job #125?

20. What is the amount of direct material for to Job #125?

21. Assume that Jobs #123 and #201 are incomplete at the end of September. What is the
balance in Work in Process Inventory at that time?

Use the following information for questions 22 and 23.

Zew Co. has a job order costing system and an overhead application rate of 120 percent of
direct labor cost. Job #33 is charged with direct material of $12,000 and overhead of $7,200.
Job #34 has direct material of $2,000 and direct labor of $9,000.

22. What amount of direct labor cost has been charged to Job #33?
23. What is the total cost of Job #34?

Use the following information for questions 24 and 25.

Kool Co. uses a job order costing system. Assume that Job #101 is the only one in process.
The following information is available:

Budgeted direct labor hours 65,000 Budgeted machine hours 9,000

Budgeted overhead $350,000 Direct material $110,500
Direct labor cost $70,000

24. What is the overhead application rate if Kool uses a predetermined overhead
application rate based on direct labor hours (rounded to the nearest whole dollar)?

25. What is the total cost of Job #101 assuming that overhead is applied at the rate of 135
percent of direct labor cost (rounded to the nearest whole dollar)?