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Exercise on job costing

The document contains exercises related to job costing for ABC Co. and XYZ Industries, detailing transactions and cost records for February 2011 and the year ended December 2003. It requires journal entries for ABC Co. and computations for raw materials used, prime cost, manufacturing cost, cost of finished goods, cost of goods sold, and gross profit for XYZ Industries. Additionally, it includes data for three jobs in a manufacturing company to compute completed costs and work in progress inventory.

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Yohannes Alemu
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6 views

Exercise on job costing

The document contains exercises related to job costing for ABC Co. and XYZ Industries, detailing transactions and cost records for February 2011 and the year ended December 2003. It requires journal entries for ABC Co. and computations for raw materials used, prime cost, manufacturing cost, cost of finished goods, cost of goods sold, and gross profit for XYZ Industries. Additionally, it includes data for three jobs in a manufacturing company to compute completed costs and work in progress inventory.

Uploaded by

Yohannes Alemu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Exercises on chapter three- job costing

1. Suppose the following transactions were taken from the cost record sheet of ABC Co. for
the month of February 2011.
a. The Company has purchased materials (Direct & indirect) on for Br. 89,000.
b. Usage of direct materials for Br.81, 000 and indirect materials for Br, 4000.
c. Manufacturing payroll for February direct labor Br. 39,000 and indirect labor Br.
15,000 paid in cash.
d. Other manufacturing cost incurred during February Br.75, 000 consisting of
supervision and engineering salaries Br.45, 000 (paid in cash), plant utilities, repairs,
and insurance Br.13, 000 (paid in cash) and plant depreciation Br.18,000.
e. Allocation of manufacturing overhead to jobs Br.80, 000.
f. Completion and transfer of individual jobs to finished goods Br.188, 800.
g. Cost of goods sold Br.180, 000.
h. Marketing cost for February Br.45, 000 and customer service costs for February
Br.15, 000 paid in cash.
i. Sales revenue, all on credit Br.270, 000.
Required:
Pass all the necessary journal entries for ABC Co. for the month of February 2011.
2. XYZ industries manufacture a product A. On 1 st January 2003finished goods in stock
accounts for Br.50,000. Other stocks such as work in progress 1,1,2003 Br.40,000 and raw
materials as of 1,1,2003 accounts for Br.100,000. The information available from cost
records for the year ended 31 December 2003 was as follows.
Br.
Direct materials 800,000
Direct wages 300,000
Carriage inward 40,000
Indirect wage 90,000
Factory cost 275,000
Stock of raw materials 31 December 2003 80,000
Work in progress 31 December 2003 70,000
Sales (120,000 units) 2,500,000
Indirect materials 175,000
Office and administrative overhead 80,000
Selling and administrative overhead 100,000
Stock of finished goods 31 December 2003 60,000
Required-Compute:
a. The amount of raw materials used
b. The prime cost
c. Manufacturing cost/work cost
d. The cost of finished goods
e. Cost of goods sold
f. Gross profit
3. A manufacturing company employs job costing to account for its costs. There are three
production departments, and separate departmental overhead application rates are employed
because the operations of the departments are so different. All jobs generally pass through all
three production departments. Data regarding the hourly direct labor rates, overhead application
rates and three jobs on which work has done during the month appears as below. Job 101 and
job 102 were completed during the current month.
Production Direct labor rate Manufacturing overhead application ate
departments
1 Br12 50% direct materials
2 18 Br.8 per machine hours
3 15 75% direct labor cost

1
Exercises on chapter three- job costing
Additional information: For jobs 101 and 102 and the newly started job 103 the following data
are accounted for.

JOB 101 JOB 102 103


Beg.work in process Br.25,500 Br.32,400 Br.-0-
DM
1 Br.40,000 Br.26,000 Br.58,000
2 3,000 5000 14,000
3 0 0 0
DLH
1 500 400 300
2 200 250 350
3 1,500 1,800 2,500
Machine hours
1 0 0 0
2 1,200 1,500 2,700
3 1,500 1,800 2,500

Required:
a. Compute the completed cost of job 101 and job 102
b. Compute the value of the WIP inventory at the end of the month.

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