DREAM SCIENCE AND TECHNOLOGY COLLEGE

DEPARTMENT OF ACCOUNTING AND FINANCE

PRODUCE JOB ORDER AND PROCESS COSTING SYSTEM GROUP ASSIGNMENT
1. The following selected data are taken from the xy company for the month of November 2022
Direct material inventory November 1, 2022----------------------------105,000
Direct material purchase ----------------------------------------------------365,000
Direct material used---------------------------------------------------------- 385,000
Total manufacturing overhead cost-----------------------------------------450,000
Variable manufacturing overhead cost-------------------------------------265,000
Total manufacturing cost incurred during November 2022 ------------1,610,000
Work in process inventory in November 1,2022-------------------------230,000
Cost of goods manufactured -----------------------------------------------1,660,000
Finished goods inventory November 1, 2022---------------------------130,000
Cost of goods sold ---------------------------------------------------------1,770,000
Task 1 calculate direct material inventory on November 30, 2022 ( 0.5 point)
Task 2 fixed manufacturing overhead cost for November 2022 ( 0.5 point)
Task 3 direct manufacturing labor cost for November 2022 ( 0.5 point)
Task 4 work in process inventory November 30, 2022 ( 0.5 point)
Task 5 cost of finished goods available for sale in November 2022 ( 0.5 point)
Task 6 finished goods inventory on November 30, 2022 ( 0.5 point)
2. Case scenario: Job no 10 pass through the department A and B the following information is given regarding
this job
Department
A B
Material issued to job 8000 1,000
Direct labor hour for job 1,000 2,000
Rate of direct labor per hour 1 1.5
Sale of scrap material arising for job 1,000 150
Total overhead for the department 10,000 15,000
Total labor hour for the departments 10,000 30,000
Task 1: calculate the cost of the job 10 from the above figure. Assume the overhead cost is computed based on
the total labor hour used in the department. (3 points)

3. XYZ Company uses job-order costing. It applies overhead cost to jobs on the basis of direct
labor-hours. The following transactions took place during the year: ( 5 points)
a) $300,000 of raw materials were purchased on account

b) Incurred factory labor of $250,000, $25,000 was payroll taxes

c) Utility costs for the factory were $60,000. Depreciation recorded was $200,000

d) Raw materials were assigned into production: $90,000 direct materials and

$4,000 indirect materials

e) Labor costs assigned: $40,000 direct, $1,000 indirect

f) Manufacturing overhead of was estimated to be $800,000 and is based on direct labor hours.
Total direct labor hours are estimated to be 200,000 hours. Actual direct labor-hours incurred were
72,000.
g) Jobs costing $30,000 were completed and transferred into the finished goods inventory.
h) Jobs with a cost of $15,000 were sold on account for $20,000.

i) Closed the under/over applied overhead for the year.

Required: prepare necessary journal entries

4. XYZ Manufacturing produces three types of products - A, B, and C. The following

information is available for a production batch:
Product A: 5,000 units Product B: 8,000 units Product C: 3,000 units Total Joint Cost: $150,000
Required: Using the Physical Unit Method, calculate the allocated joint cost for each product. ( 2 points)

5. ABC Company has two products, X and Y, with the following details:

 Product X will sell for $300

 Product Y will sell for $150

 Total Joint Cost incurred is $50,000

Required: Apply the Relative Sales Value Method to allocate the joint cost between Products X and Y.( 2
points)
6. Determine the budget variance using the formula: Variance = Actual Value - Projected Value
Actual revenue: $120,000 Projected revenue: $100,000 ( 2 points)
7. Entoto manufacturing company uses a job order cost accounting system. Normal costing system and perpetual
inventory system for its accounting records. Information of the company’s production activities during current
accounting period gives as follows.
1. Beginning finished goods inventory for the period ( job 10) birr 45,000
2. Beginning work in process for the period birr 30,000.
3. Purchased raw materials for cash birr 60,000
4. Materials requisitions record shows use of the following direct material for the period
Job 13 …………………………………………….. 48,000
Job 14 ……………………………………………. 32,000
Job 15 ……………………………………………. 19,200
Job 16 ……………………………………………. 22,400
5. Time ticket record shows use of the following direct hour cost for the period
Job 13 ……………………………………………….. 12,000
Job 14 ……………………………………………….. 10,500
Job 15 ………………………………………………… 37,500
Job 16 ………………………………………………… 39,000
6. The company estimated factory overhead of 70% of direct labor cost during the production
7. Transferred jobs 13,14 and 15 to finished goods during the period
8. Sold jobs 10, job 13 and job 14 on credit at a total price of birr 420,000
Required

Task 1: determine amount of ending work in process inventory and ending finished goods inventory for the
period ( 1 points)
Task 2: calculate cost of goods manufactured ( 1 points)
Task 3: calculate cost of goods sold ( 1 points)
Task 4: record journal entries related to the above transaction ( 0.5 points)
Task 5: calculate gross profit for the period ( 0.5 points)

8. Precision Manufacturing Inc. has two service departments (Maintenance and Human Resources) and two
operating production departments (Machining and Assembly). The company believes in accurately
reflecting the full cost of its production operations. The direct costs for each department and the usage of
services are provided below:

Department Direct Department Proportion of Services Proportion of Services

Costs Provided by Maintenance Provided by HR
Service Departments
Maintenance $120,000 — 20%
Human Resources (HR) $80,000 10% —
Operating Departments
Machining $250,000 60% 50%
Assembly $300,000 30% 30%
Total $750,000 100% 100%
Note:
 The Maintenance Department costs are allocated based on the proportion of maintenance hours used.
 The Human Resources Department costs are allocated based on the proportion of employees in each
department.

Required:
Calculate the total costs allocated to the Machining Department and the Assembly Department from the
service departments (Maintenance and HR) using the following three methods: (4 points)

1. Direct Method
2. Step-Down (or Sequential) Method (Allocate the costs of the Maintenance Department first, as it
provides a greater percentage of its total services to other service departments (10% to HR) compared to
HR's service back to Maintenance (20% of HR's total? No, HR provides 20% to Maintenance). Actually, we
allocate the one with the highest percentage of service to other service depts first. Maintenance gives 10%
to HR, HR gives 20% to Maintenance. HR gives a higher % to Maintenance, so we allocate HR first.)
o Correction: The general rule is to start with the department that serves the most other service departments.
Let's re-calc: Maintenance services: 10% to HR. HR services: 20% to Maintenance. Therefore, HR provides
a higher proportion of its service to another service department. We should allocate HR first.
3. Reciprocal Method (Use the algebraic / simultaneous equation approach)
9. TechCase Inc. manufactures protective phone cases in its Moulding Department. All direct materials are
added at the beginning of the manufacturing process. Conversion costs (direct labor and manufacturing
overhead) are incurred uniformly throughout the process. The company uses the FIFO (First-In, First-Out)
method of process costing to value its inventory and calculate costs. You have been provided with the
following data for the month of November:
Item Units Cost Details
Beginning Work-in- 8,000 units Degree of Completion: 100% complete for materials;
Process (Nov 1) 40% complete for conversion.
Accumulated Costs:
• Direct Materials: $12,000 Conversion Costs: $9,200
Units Started in November 22,000 units
Units Completed and 24,000 units
Transferred Out
Ending Work-in-Process 6,000 units Degree of Completion: 100% complete for materials;
(Nov 30) 50% complete for conversion.
Costs Added in November • Direct Materials: $44,000 , Conversion Costs:
$59,800

Required:

Prepare a production cost report for the Moulding Department for the month of November using the FIFO
method. Your report should include the following five steps (5 points)

1. Physical Flow of Units - Reconcile the units to determine the number of units started and completed during
the period.
2. Equivalent Units of Production (EUP) - Calculate the equivalent units for direct materials and
conversion costs, focusing only on the work done in the current period (November).
3. Cost per Equivalent Unit - Calculate the cost per equivalent unit for materials and conversion based solely
on the costs added during November.
4. Cost Assignment - Assign total costs to:
o a) Units completed and transferred out (separately showing the cost of beginning WIP completed and the
cost of units started and completed).
o b) Units remaining in ending work-in-process inventory.
5. Cost Reconciliation: Verify that the total costs to account for equal the total costs accounted for.