Job Cost Computation - Cost Accounting

1. What is the total manufacturing cost assigned to the primary machine from Job #550?
   Answer: $255,500 The cost assigned to the main product is the total job cost less the net realizable value (NRV) of the byproduct. 1. Calculate the total joint cost of the job: Total Cost = DM + DL + Applied OH = $80,000 + $120,000 + $60,000 = $260,000. 2. Calculate the net realizable value of the byproduct: NRV = Selling Price of Byproduct - Additional Selling Costs = $5,000 - $500 = $4,500. 3. Calculate the cost of the main product: Cost of Main Product = Total Joint Cost - NRV of Byproduct = $260,000 - $4,500 = $255,500.
2. Zenith Corporation's Job #H-205 was completed with total costs of $45,600. The job cost sheet shows that applied overhead represents 40% of the total job cost, and direct labor cost is 150% of direct materials cost. How much was spent on direct materials for this job?
   Answer: $10,944 Applied overhead = $45,600 × 40% = $18,240. Direct materials + direct labor = $45,600 - $18,240 = $27,360. Let direct materials = X, then direct labor = 1.5X. So X + 1.5X = $27,360, which gives 2.5X = $27,360, therefore X = $10,944. Choice B assumes overhead is 35%. Choice C uses incorrect labor ratio. Choice D miscalculates the percentage relationships.
3. What is the unit product cost for each brochure from Job #P-01?
   Answer: $1.155 First, calculate the total cost of the job, then divide by the number of units. 1. Calculate the predetermined overhead rate (POHR): POHR = Budgeted MOH / Budgeted Machine Hours = $750,000 / 50,000 MH = $15 per machine hour. 2. Calculate applied overhead for Job #P-01: Applied OH = POHR × Actual Machine Hours = $15/MH × 3,100 MH = $46,500. 3. Calculate total job cost: Total Cost = DM + DL + Applied OH = $45,000 + $24,000 + $46,500 = $115,500. 4. Calculate unit product cost: Unit Cost = Total Cost / Number of Units = $115,500 / 100,000 brochures = $1.155 per brochure.
4. What is the total cost of Job #M-12 as shown on its completed job cost sheet?
   Answer: $63,500 The total cost of a completed job that was in beginning Work-in-Process is the sum of its beginning WIP balance plus all costs added during the current period. 1. Beginning WIP Cost for #M-12: $15,500. 2. Costs added to #M-12 in June: - Direct Materials: $12,000. - Direct Labor: $20,000. - Applied Overhead: 80% of direct labor cost = 0.80 × $20,000 = $16,000. 3. Total costs added in June for #M-12: $12,000 + $20,000 + $16,000 = $48,000. 4. Total Cost of completed Job #M-12: Beginning Cost + Costs Added = $15,500 + $48,000 = $63,500.
5. Based on the job cost sheet information provided, what was the direct materials cost for Job #BD-308?
   Answer: $25,920 Applied overhead = 960 machine hours × $18 = $17,280. Direct materials = Total job cost - Direct labor - Applied overhead = $67,200 - $24,000 - $17,280 = $25,920. Choice B assumes overhead rate of $17 per machine hour. Choice C miscalculates machine hours as 1,040. Choice D uses overhead rate of $20 per machine hour.
6. What was the direct material cost per unit for Job #C-13?
   Answer: $60.00 This problem requires working backward to find the direct material cost and then calculating the per-unit cost. The total cost equation is: Total Cost = DM + DL + OH. We know: - Total Cost = $146,000 - DL = $50,000 - OH = 0.60 × DM Let 'x' be the Direct Material cost. $146,000 = x + $50,000 + 0.60x $146,000 - $50,000 = 1.60x $96,000 = 1.60x \nx = $96,000 / 1.60 = $60,000 (Total Direct Material Cost) Now, calculate the per-unit direct material cost: Unit DM Cost = $60,000 / 1,000 units = $60.00 per unit.
7. What is the correct unit product cost for Job 88P?
   Answer: $1,050 The unit product cost includes only manufacturing costs (direct materials, direct labor, and manufacturing overhead). Selling, administrative, and shipping costs are period costs, not product costs. 1. Direct Materials: $12,500. 2. Direct Labor: $20,000. 3. Applied Manufacturing Overhead: 800 direct labor hours × $25/hour = $20,000. 4. Total Product Cost: $12,500 (DM) + $20,000 (DL) + $20,000 (OH) = $52,500. 5. Unit Product Cost: $52,500 / 50 units = $1,050 per unit.
8. What is the amount that will be transferred from the Work-in-Process account to the Finished Goods account during the month?
   Answer: $172,000 The amount transferred from Work-in-Process to Finished Goods is the total cost of jobs completed during the period. In this case, only Job #501 was completed. Its total cost is its beginning balance plus all costs added during the month. 1. Beginning Cost of Job #501: $30,000. 2. Costs Added to Job #501: - Direct Materials: $40,000. - Direct Labor: $60,000. - Applied Overhead: 70% × $60,000 DL = $42,000. 3. Total Cost of Job #501: $30,000 (Beg. WIP) + $40,000 (DM) + $60,000 (DL) + $42,000 (OH) = $172,000. This is the amount transferred to Finished Goods.
9. What is the total cost of Job #R-50?
   Answer: $55,250 The total cost includes DM, DL (including overtime premium), and applied OH. Since the overtime premium is charged to the job, it's part of the direct labor cost. 1. Direct Materials: $18,000. 2. Direct Labor: - Regular pay: (800 + 100) hours × $25/hour = 900 hours × $25/hour = $22,500. - Overtime premium: 100 hours × ($25/hour × 0.5) = 100 hours × $12.50/hour = $1,250. - Total Direct Labor = $22,500 + $1,250 = $23,750. 3. Applied Overhead: Overhead is applied to all hours worked. - Total hours = 800 regular + 100 overtime = 900 hours. - Applied OH = 900 hours × $15/hour = $13,500. 4. Total Job Cost: $18,000 (DM) + $23,750 (DL) + $13,500 (OH) = $55,250.
10. Based on the job cost information provided, what is the unit product cost for the saleable units from Job #815?
    Answer: $309.64 per unit Total job cost = $8,200 + $15,600 + $10,920 = $34,720. Saleable units = 120 - 8 = 112 units. Unit cost = $34,720 ÷ 112 = $309.64. Choice A divides by all 120 units produced. Choice C uses incorrect overhead calculation. Choice D incorrectly treats rejected units as a separate cost addition.
11. What was the total direct labor cost for Job #B34?
    Answer: $27,360 This is an algebraic 'work backward' problem. The total job cost formula is: Total Cost = Direct Materials (DM) + Direct Labor (DL) + Applied Overhead (OH). We are given: - Total Cost = $88,400 - DM = $20,000 - OH = 1.50 × DL Let 'x' be the Direct Labor cost. The equation is: $88,400 = $20,000 + x + 1.50x $88,400 - $20,000 = 2.50x $68,400 = 2.50x \nx = $68,400 / 2.50 \nx = $27,360.
12. What is the total manufacturing cost recorded on the job cost sheet for Job A-55?
    Answer: $109,000 The total manufacturing cost for a job is the sum of direct materials, direct labor, and applied manufacturing overhead. 1. Calculate the predetermined overhead rate (POHR): POHR = Estimated Total MOH Cost / Estimated Total Allocation Base = $960,000 / 24,000 machine hours = $40 per machine hour. 2. Calculate applied overhead for Job A-55: Applied OH = POHR × Actual Machine Hours for the Job = $40/MH × 850 MH = $34,000. 3. Calculate total job cost: Total Cost = Direct Materials + Direct Labor + Applied OH = $45,000 + $30,000 + $34,000 = $109,000.
13. What is the unit cost for Job #1122 if it consisted of 1,000 identical units?
    Answer: $56.25 To find the unit cost, first calculate the total cost of the job using the predetermined overhead rate, then divide by the number of units. The actual overhead data for the year is irrelevant for costing the specific job. 1. Calculate the predetermined overhead rate (POHR): POHR = Estimated MOH / Estimated DLH = $600,000 / 30,000 DLH = $20 per DLH. 2. Calculate costs for Job #1122: - Direct Materials: $18,000. - Direct Labor: 850 DLH × $25/hour = $21,250. - Applied Overhead: 850 DLH × $20/DLH (POHR) = $17,000. 3. Calculate total job cost: $18,000 + $21,250 + $17,000 = $56,250. 4. Calculate unit cost: $56,250 / 1,000 units = $56.25 per unit.
14. If the total manufacturing cost for Job #305 was $84,000, what was the company's predetermined overhead rate?
    Answer: $14.00 per direct labor hour This question requires working backwards from total cost to find the applied overhead, and then calculating the rate. 1. Find total applied overhead: Total Cost = Prime Costs + Applied OH. Therefore, Applied OH = Total Cost - Prime Costs = $84,000 - $56,000 = $28,000. 2. Identify the allocation base: The job incurred 2,000 direct labor hours. 3. Calculate the predetermined overhead rate: POHR = Total Applied OH / Actual Allocation Base = $28,000 / 2,000 DLH = $14.00 per direct labor hour. The direct labor rate of $16/hour is extra information not needed for the final calculation but is needed to confirm the composition of prime costs.
15. By what amount will the estimated overhead cost for Job #789 change due to the switch in allocation bases?
    Answer: $360 decrease This question requires calculating the applied overhead for the job under both the old and new systems and then finding the difference. 1. Calculate OH under the old system (20X1 rate): The old rate was $18 per direct labor hour. Applied OH (Old) = 100 DLH × $18/DLH = $1,800. 2. Calculate the new POHR for 20X2: The new base is machine hours. POHR (New) = Budgeted MOH / Budgeted MH = $480,000 / 20,000 MH = $24 per machine hour. 3. Calculate OH under the new system: Applied OH (New) = 60 MH × $24/MH = $1,440. 4. Calculate the change: Change = New OH - Old OH = $1,440 - $1,800 = -$360. This is a $360 decrease.
16. If the direct materials used on Job #X-7 were proportional to its share of the total direct labor cost for the year, what was the total manufacturing cost of Job #X-7?
    Answer: $225,000 This is a multi-step problem requiring calculation of total materials used, allocation to the job, and then calculation of total job cost. 1. Calculate total raw materials used: Beginning RM + Purchases - Ending RM = $50,000 + $450,000 - $35,000 = $465,000. 2. Determine the proportion of labor for Job #X-7: Job #X-7 DL / Total DL = $60,000 / $300,000 = 20%. 3. Allocate direct materials to Job #X-7: Total DM Used × Proportion = $465,000 × 20% = $93,000. 4. Calculate applied overhead for Job #X-7: 120% of Job #X-7 DL Cost = 1.20 × $60,000 = $72,000. 5. Calculate total cost of Job #X-7: DM + DL + Applied OH = $93,000 + $60,000 + $72,000 = $225,000.
17. What is the total manufacturing cost to be recorded on the job cost sheet for Job #A-20 based on this information?
    Answer: $19,900 The job cost sheet only includes the direct costs for that job plus applied overhead. Indirect materials are part of actual manufacturing overhead, not a direct cost of the job. 1. Direct Materials: The requisition form explicitly states $10,000 was for Job #A-20. The remaining $2,000 is indirect material. 2. Direct Labor: 200 hours × $22/hour = $4,400. 3. Applied Overhead: 125% of direct labor cost = 1.25 × $4,400 = $5,500. 4. Total Job Cost: $10,000 (DM) + $4,400 (DL) + $5,500 (OH) = $19,900.
18. What is the total cost of Job #101 on its job cost sheet?
    Answer: $39,000 The total cost of the job includes the original direct materials, original direct labor, and the applied overhead based on the original direct labor. The cost of normal rework ($100 in materials, and 8 hours * $30/hr = $240 in labor) is charged to the manufacturing overhead account, not directly to the job. 1. Original Direct Materials: $9,000. 2. Original Direct Labor: $12,000. 3. Applied Overhead: The overhead is applied based on the original direct labor cost before rework. Applied OH = 150% × $12,000 = $18,000. 4. Total Job Cost: $9,000 (DM) + $12,000 (DL) + $18,000 (OH) = $39,000. The costs of rework are part of the overall actual overhead for the period but do not get added to this specific job's cost sheet.

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