Cost Acctg 5 Seatwork
Cost Acctg 5 Seatwork
Cost Acctg 5 Seatwork
Ong, CPA
Practice Problems for Job Order Costing September 11, 2017
PROBLEM 1: Voyager Inc. produces customized vans in a job order shop. On November 1, the following balances appear in
the inventory records:
The amount in Finished Goods represents P101,000 recorded for Van 175 and P78,000 recorded for Van 177. The work in
process account represents the three vans in process, as follows:
REQUIRED:
1. Make an income statement for the month of November with supporting Schedule of Cost of Goods Manufactured.
PROBLEM 2: Barrett Kitchens produces a variety of items in accordance with special job orders from hospitals, plant
cafeterias, and university dormitories. An order for 2,100 cases of mixed vegetables costs P9 per case: direct materials, P4;
direct manufacturing labor, P3; and manufacturing overhead allocated, P2. The manufacturing overhead rate includes a
provision for normal spoilage. Consider each requirement independently.
REQUIRED:
1. Assume that a laborer dropped 420 cases. Suppose part of the 420 cases could be sold to a nearby prison for P420 cash.
Prepare a journal entry to record this event. Calculate and explain briefly the unit cost of the remaining 1,680 cases.
2. Refer to the original data. Tasters at the company reject 420 of the 2,100 cases. The 420 cases are disposed of for P840.
Assume that this rejection rate is considered normal. Prepare a journal entry to record this event, and do the following:
a. Calculate the unit cost if the rejection is attributable to exacting specifications of this particular job.
b. Calculate the unit cost if the rejection is characteristic of the production process and is not attributable to this specific
job.
c. Are unit costs the same in requirements 2a and 2b? Explain your reasoning briefly.
3. Refer to the original data. Tasters rejected 420 cases that had insufficient salt. The product can be placed in a vat, salt can
be added, and the product can be reprocessed into jars. This operation, which is considered normal, will cost P420.
Prepare a journal entry to record this event and do the following:
a. Calculate the unit cost of all the cases if this additional cost was incurred because of the exacting specifications of this
particular job.
b. Calculate the unit cost of all the cases if this additional cost occurs regularly because of difficulty in seasoning.
c. Are unit costs the same in requirements 3a and 3b? Explain your reasoning briefly.