JOB ORDER COSTING

1. The following job order cost detail pertains to the three jobs that were in process at the UNILIVER Company during
January:
JOB 66 JOB 67 JOB 68
Cost charge in prior period 40,000 15,000
Cost added in January:
Direct materials 35,000 45,000 55,000
Direct labor 45,000 40,000 35,000
Factory overhead (50/MHrs) ? ? ?
January machine hours used 720 640 460
Required: Prepare the Journal entry to record each of the following January transaction:
1. Direct materials were issued from the materials storeroom to work in process.
2. The payroll was distributed to work in process.
3. Factory overhead was applied to production for the period.
4. Job orders 66 and 67 were completed and transferred to the finish goods storeroom.

2. The books of Olay Products Company show the following account balances as of March 1:
Finished goods 78,830
Work in process 292,621
Materials 65,000
Over or under applied Factory overhead 12,300 (Cr.)
The work in process account is supported by the following job order cost sheet:
Job Item DM DL FOH Total
204 80,000 Balloons 15,230 21,430 13,800 50,460
205 5,000 Life raft 40,450 55,240 22,370 118,060
206 10,000 Life belt 60,875 43,860 19,366 124,101
During March, the following transactions occurred:
a) Purchase of materials, 42,300.
b) Purchase of special materials was 5,800 for new Job 207, which calls for 4,000 life jackets.
c) Indirect labor cost was 12,480. Direct labor was as follows:
Job Amount Hours
204 26,844 3,355.5
205 22,750 3,250.0
206 28,920 3,615.0
207 20,370 2,910.0
d) Materials issued:
Job 204 9,480
Job 205 11,320
Job 206 10,490
Job 207 16,640(Excluding 5,800 of special materials,
which are also issued at this time.)
e) Other factory overhead incurred or accrued:
Insurance on factory 830
Tax on real estate 845
Depreciation – machinery 780
Depreciation – factory building 840
Light 560
Coal used 1,810
Power 3,390
Repairs and maintenance 2,240
Indirect supplies 1,910
Miscellaneous 15,256
f) Factory overhead is applied at the rate 2.3 per direct labor hour. An applied overhead control account is used and is
then closed to the overhead control account.
g) Job 204 was shipped and billed at a contract price of 117,500.
Required:
1. Compute the total cost of each job at the end of March.
2. Determine the over or under applied factory overhead remaining in the overhead control account.
3. Little Hugs Corp. is a manufacturer of furnishings for children. The company uses a job-order costing system. Little
Hugs work in process inventory on November 30, 2018 consisted of the following jobs:
Job No. Description Units Accumulated costs
CBS102 Cribs 20,000 900,000
PLP086 Playpens 15,000 420,000
DRS114 Dressers 25,000 250,000
The company’s finished goods inventory, which Little Hugs values using the FIFO method, consisted of five items.
Item Quantity Unit cost Accumulated costs
Cribs 7,500 64 480,000
Stroller 13,000 23 299,000
Carriages 11,200 102 1,142,400
Dressers 21,000 55 1,155,000
Playpens 19,400 35 679,000
Little Hugs applies manufacturing overhead on the basis of direct labor hours. The company’s overhead budget for the
year totals 4,500,000, and the company plans to use 600,000 direct labor hours during this period. Though the first 11
months of the year, total of 555,000 direct labor hours were worked, and total overhead amounted to 4,273,500.
At the end of November, the balance in Little Hugs raw materials inventory account, which includes both raw materials
and purchased parts, was 668,000. Additions to inventory and requisitions from inventory during December included the
following:
Raw materials Purchased parts
Purchases 242,000 396,000
Requisitions:
Job CBS102 51,000 104,000
Job PLP086 3,000 10,800
Job DRS114 124,000 87,000
Job STR077 (10,000 strollers) 62,000 81,000
Job CRG098 (5,000 carriages 65,000 187,000
During December, Little Hugs factory payroll consisted of the following:
Hours Cost
CBS102 12,000 122,400
PLP086 4,400 43,200
DRS114 19,500 200,500
STR077 3,500 30,000
CRG098 14,000 138,000
Indirect labor 3,000 29,400
Supervision 57,600
The following list shows the jobs that were completed and the unit sales for December:
Production Sales
Job No. Items Quantity completed Items Quantity shipped
CBS102 Cribs 20,000 Cribs 17,500
PLP086 Playpens 15,000 Playpens 21,000
STR077 Strollers 10,000 Strollers 14,000
CRG098 Carriages 5,000 Dressers 18,000
Carriages 6,000
Required:
1. Determined the over or under applied factory overhead.
2. Calculate the peso balance in Little Hugs Work in Process Inventory account as of December 31, 2018.
3. Calculate the peso amount related to the playpens in Little Hugs Finished Goods Inventory account as of December
31, 2018.

4. During August, Altamont Machine Company started production orders 116, 117, and 118. Order 115 was in process at
the beginning of the month with direct materials costs of 35,000, direct labor costs of 21,000, and applied factory
overhead of 25,200. During the month, direct materials were requisitioned, and direct labor was identified with the
orders as follows:
Order no. Direct materials Direct labor
115 26,000
116 39,000 45,000
117 53,000 47,000
118 47,000 16,000
Factory overhead is applied to the orders at 120 percent of direct labor cost. Orders 115, 116, and 117n were completed
and sold in August. Order 118 was incomplete on August 31.
Required:
1. Determine the cost of goods sold for the month of August.
2. Determine the work in process ending balance August 31.