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Job Order Costing Practice Problems

The document provides examples of solving cost accounting practice problems involving job order costing. It gives the overhead rate per direct labor hour for a company and calculates the overhead applied to a job at the beginning of a period. It also solves for the direct material cost for a job given total work in process, overhead applied, and costs of other jobs.

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Yuriieee Minaves
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4 views1 page

Job Order Costing Practice Problems

The document provides examples of solving cost accounting practice problems involving job order costing. It gives the overhead rate per direct labor hour for a company and calculates the overhead applied to a job at the beginning of a period. It also solves for the direct material cost for a job given total work in process, overhead applied, and costs of other jobs.

Uploaded by

Yuriieee Minaves
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

COST ACCOUNTING

BACHELOR OF SCIENCE IN ACCOUNTANCY – II


2ND YEAR – 1ST SEM
PRACTICE PROBLEM SOLVING

VI. Ark Co. uses a job order costing system. At the beginning of January, the company had 2 jobs in process with the
following costs:
Direct Material Direct Labor Overhead
Job #456 $3,400 $510 $255
Job #461 1,100 289 ?
Ark pays its workers $8.50 per hour and applies overhead on a direct labor hour basis.
What is the overhead application rate per direct labor hour?
a. $0.50
b. $2.00
c. $4.25
d. $30.00
Solution:
Direct labor 510 = 60 hours rendered
Rate per hour 8.5

OH 255
Hours rendered / volume 60 = 4.25 OH rate

How much overhead was included in the cost of Job #461 at the beginning of January?
a. $144.50
b. $153.00
c. $2,200.00
d. $2,456.50
Solution:
Direct labor 289
Rate per hour 8.50 = 34 hours rendered

Hours rendered x OH rate = OH


34 * 4.25 = 144.5

During January, Ark employees worked on Job #479. At the end of the month, $714 of overhead had been applied to
this job. Total Work in Process Inventory at the end of the month was $6,800 and all other jobs had a total cost of
$3,981. What amount of direct material is included in Job #479?
a. $677
b. $1,391
c. $2,142
d. $4,658
Solution:
Work in process, end 6,800
Other Work in process (3,981)
Costs remaining in WIP 2,819
OH (714)
Direct Labor (714*2) (1,428)
Direct Material 677

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