ACTIVITY 1
JOB ORDER COSTING
A. Assembly Finishing
Manufacturing OH 960,000 600,000
Direct Labor Hours 80,000
Machine Hours 75,000
Predetermined OH Rate 12.00 8.00
(a) (b)
B. Overhead applied to production
Job Alpha Job Beta Job Charlie Job Delta Job Echo
Assembly
8,000 DLH x P 12 96,000
14,000 DLH x P 12 168,000
9,000 DLH x P 12 108,000
6,000 DLH x P 12 72,000
4,000 DLH x P 12 48,000
Finishing
6,500 DLH x P 8 52,000
11,000 DLH x P 8 88,000
10,000 DLH x P 8 80,000
7,500 DLH x P 8 60,000
3,000 DLH x P 8 24,000
Total 148,000 256,000 188,000 132,000 72,000
C. Cost to manufacture each job
Job Alpha Job Beta Job Charlie Job Delta Job Echo
Assembly
Direct Materials 25,000 30,000 40,000 50,000 25,000
Direct Labor
8,000 DLH x P 5.50 44,000
14,000 DLH x P 5.50 77,000
9,000 DLH x P 5.50 49,500
6,000 DLH x P 5.50 33,000
4,000 DLH x P 5.50 22,000
Overhead 96,000 168,000 108,000 72,000 48,000
Finishing
Direct Materials 12,000 25,000 30,000 2,000 5,000
Direct Labor
1,800 DLH x P 5.50 9,900
2,000 DLH x P 5.50 11,000
3,500 DLH x P 5.50 19,250
3,200 DLH x P 5.50 17,600
2,800 DLH x P 5.50 15,400
Overhead 52,000 88,000 80,000 60,000 24,000
Total 238,900 399,000 326,750 234,600 139,400
D. Gross Profit assuming the jobs are sold at cost plus 40% mark up
Job Alpha Job Beta Job Charlie Job Delta Job Echo
Assembly 165,000 275,000 197,500 155,000 95,000
Finishing 73,900 124,000 129,250 79,600 44,400
Total Cost 238,900 399,000 326,750 234,600 139,400
Mark Up (40% on Cost) 95,560 159,600 130,700 93,840 55,760
Selling Price 334,460 558,600 457,450 328,440 195,160
Cost of Sales 238,900 399,000 326,750 234,600 139,400
Gross Profit 95,560 159,600 130,700 93,840 55,760