Mastery Problem Job Order Casting (Basic) A job order costing system is used when a company produces a product or provides a service that is unique that is, the cost of ore product or service is different than that of another A Jab order casting must be able to identyy each individual job and accumulate its costs separately from the costs of other jobs. In manufacturing, the jobs may be for a single item or a batch of similar items. The Howchart illustrates the flow of costs into work in Process and finished Goods in a job order costing system. Cost Flows in a Job Cast System Materials Work in Process Assembly Dept Work in Process- Test & Packaging Dept Finished Goods Beg Inventory Bey Inventory + Purcharcs Cast of Units transferred out Ost of Units translated out Cost of Goods Direct Materials + Cost of units Transferred in Job. Job 2 Jah43, Job 4 Ecg Inventory + Direct Materials + Direct Jab#1,42,43,44 + Factory Overhead applied Job41,42,43,44 Jab1, Jebe2 Job 3 Jcbe1 Bey Invertury Coat of units transferred in - Direct Labor Jan 1.2.43 + Factory Overted appled Job , 2, 3 End Inventory Job22.23 Fue Invertery Job+1 Erd (nventory Jobw4 Factory Overhead Actual Factory Overhead: + ualities experse Factory overhead - depreciation of applied + supplies Costs to data ty tah are shown. Source: Job Cost Sheets: Job Job#2 Job*3 Job#4 Direct inisterials $730 $600 $410 $360 Direct laber SO 90 80 110 Overhead 140 120 110 155 $960 $810 $600 $635 Use the low cart to complete tha following santos. The ending inventory balance in the work in Process Asserby Dept is $ The cost of goods transferred to tha War in Process Tast & Packaging Dept is $ The cost of goods transtorted out of the Work in Process Test & Packaging Dept Dept The ending inventory balance in the work in Process- Test & Packaging Dept is $ is the primary document for accumulating all costs related to a spediccb. Materials are record tabs based on a materias requisition and labor s charged to lots based on a timecard, cr later accumulater system. Uverhead is applied based on a The rate rrey be based on direct laber Hous, mattire hours, or another activty. It may be a dollar amount or a percentage. Assume the correny has est matecovertreed costs for the coming year of $1,500,000 and expected activity is 200,000 direct labor hours. The formua for calculating the read rale is: Overhead - Estimatec ove teed costs - $ Activity direct labor hours per direct labor hour Overticac tappiled to good based on this rate. It is likely that the actual overhead costs and activity level will be different than the estimated overhead cost and estimated activity level. The result is an amount of ter/under applied overhead that is expensed to cost of goods sold APPLY THE CONCEPTS: Job Order Costing At the beginning of the year. Carenton Company estrated the following: Machining Assembly Department Department Total Overhead $332,500 272,000 $604,500 Direct labor hours 110,000 170,000 280.000 Machine hours 190,000 190.000 Carentan uses departmental overhead races. In the machiniro department, overhead is applied on the basis of machine hours. In the assembly department, overhead is applied on the basis or direct Isbor hours. Actual data for the month of January are as follows: Machining Department Assembly Department Total Overhead Direct labor hours Hachine hours Complete the folloning table $21,750 $20,500 $42,250 10,000 12.000 22.000 13,000 13,000 required, round your anspers to the near en Machining Department per machine hour Assembly Department Predatormired over theed rate pcr direct labor hour Overnaad applied in January Variance Over or underapplied Mastery Problem Job Order Casting (Basic) A job order costing system is used when a company produces a product or provides a service that is unique that is, the cost of ore product or service is different than that of another A Jab order casting must be able to identyy each individual job and accumulate its costs separately from the costs of other jobs. In manufacturing, the jobs may be for a single item or a batch of similar items. The Howchart illustrates the flow of costs into work in Process and finished Goods in a job order costing system. Cost Flows in a Job Cast System Materials Work in Process Assembly Dept Work in Process- Test & Packaging Dept Finished Goods Beg Inventory Bey Inventory + Purcharcs Cast of Units transferred out Ost of Units translated out Cost of Goods Direct Materials + Cost of units Transferred in Job. Job 2 Jah43, Job 4 Ecg Inventory + Direct Materials + Direct Jab#1,42,43,44 + Factory Overhead applied Job41,42,43,44 Jab1, Jebe2 Job 3 Jcbe1 Bey Invertury Coat of units transferred in - Direct Labor Jan 1.2.43 + Factory Overted appled Job , 2, 3 End Inventory Job22.23 Fue Invertery Job+1 Erd (nventory Jobw4 Factory Overhead Actual Factory Overhead: + ualities experse Factory overhead - depreciation of applied + supplies Costs to data ty tah are shown. Source: Job Cost Sheets: Job Job#2 Job*3 Job#4 Direct inisterials $730 $600 $410 $360 Direct laber SO 90 80 110 Overhead 140 120 110 155 $960 $810 $600 $635 Use the low cart to complete tha following santos. The ending inventory balance in the work in Process Asserby Dept is $ The cost of goods transferred to tha War in Process Tast & Packaging Dept is $ The cost of goods transtorted out of the Work in Process Test & Packaging Dept Dept The ending inventory balance in the work in Process- Test & Packaging Dept is $ is the primary document for accumulating all costs related to a spediccb. Materials are record tabs based on a materias requisition and labor s charged to lots based on a timecard, cr later accumulater system. Uverhead is applied based on a The rate rrey be based on direct laber Hous, mattire hours, or another activty. It may be a dollar amount or a percentage. Assume the correny has est matecovertreed costs for the coming year of $1,500,000 and expected activity is 200,000 direct labor hours. The formua for calculating the read rale is: Overhead - Estimatec ove teed costs - $ Activity direct labor hours per direct labor hour Overticac tappiled to good based on this rate. It is likely that the actual overhead costs and activity level will be different than the estimated overhead cost and estimated activity level. The result is an amount of ter/under applied overhead that is expensed to cost of goods sold APPLY THE CONCEPTS: Job Order Costing At the beginning of the year. Carenton Company estrated the following: Machining Assembly Department Department Total Overhead $332,500 272,000 $604,500 Direct labor hours 110,000 170,000 280.000 Machine hours 190,000 190.000 Carentan uses departmental overhead races. In the machiniro department, overhead is applied on the basis of machine hours. In the assembly department, overhead is applied on the basis or direct Isbor hours. Actual data for the month of January are as follows: Machining Department Assembly Department Total Overhead Direct labor hours Hachine hours Complete the folloning table $21,750 $20,500 $42,250 10,000 12.000 22.000 13,000 13,000 required, round your anspers to the near en Machining Department per machine hour Assembly Department Predatormired over theed rate pcr direct labor hour Overnaad applied in January Variance Over or underapplied