BKAM 2013 MANAGEMENT ACCOUNTING I (A162)
TUTORIAL TOPIC 4 JOB ORDER COSTING
DUE DATE:
QUESTION 1 (20 MARKS: 36 MINUTES)
Pok Rey Sdn. Bhd. (PRSB) is using a job-order costing based on normal costing system. PRSB
has two operating departments that all jobs pass through, Assembly Department and Machining
Department. Following are the estimated and actual data for the year 2015:
Assembly
Department
200,000
220,000
100,000
20,000
102,000
21,000 Estimated manufacturing overhead (RM)
Actual manufacturing overhead (RM)
Estimated direct labour hours (DLH)
Estimated machine hours (MH)
Actual direct labour hours (DLH)
Actual machine hours (MH) Machining
Department
700,000
690,000
20,000
100,000
18,000
104,000 Data for Job 3112 that completed during the year 2015 as follows:
Direct materials costs
Direct labour costs:
Assembly Department (12,000 hours @
RM15)
Machining Department (2,400 hours @
RM15)
Machine hours used:
Assembly Department
Machining Department
Units produced Job 3112
RM240,000
RM180,000
RM36,000
500
3,500
250 PRSB is using plantwide predetermined overhead system to allocate manufacturing overhead
costs to the jobs. Direct labour hours (DLH) is applied to compute the plantwide predetermined
overhead rate. The PRSB closes any underapplied or overapplied manufacturing overhead to cost
of goods sold account.
REQUIRED:
(a) Using plantwide predetermined overhead system:
(i) Calculate the predetermined overhead rate.
(3 Marks) 1 (ii) Calculate the unit cost for Job 3112.
(2 Marks) (iii) Calculate the underapplied or overapplied manufacturing overhead at the end of the
year 2015.
(4 Marks)
(iv) Prepare the journal entry to close any underapplied or overapplied manufacturing
overhead at the end of the year 2015.
(2 Marks)
(b) Calculate the unit cost for Job 3112 using departmental predetermined manufacturing
overhead rate. Use direct labour hour (DLH) for Assembly Department and machine hour
(MH) for Machining Department.
(5 Marks) (c) List another TWO (2) accounts that can be used as an alternative to close underapplied or
overapplied manufacturing overhead beside cost of goods sold account.
(2 Marks) (d) Explain TWO (2) reasons why applied manufacturing overhead is used in normal costing
system. QUESTION 2
Jemurung Sdn Bhd (JSB) uses a job order cost system in each of its two manufacturing
departments. Manufacturing overhead is applied to jobs on the basis of direct labor hours in
Department X, and machine hours in Department Y. All jobs will go through Department X and
Department Y.
In establishing the predetermined overhead rates for 2007, the following estimates were made for
the year: Manufacturing overhead
Direct labor cost
Direct labor hours
Machine hours Department X
RM3,000,000
RM2,500,000
250,000
1,000,000 Department Y
RM1,920,000
RM900,000
80,000
240,000 During January 2007, the job cost sheets showed the following costs and production data:
Direct materials used Department X
RM252,000
2 Department Y
RM156,000 Direct labor cost
Manufacturing overhead incurred
Direct labor hours
Machine hours RM220,000
RM258,000
22,000
90,000 RM75,000
RM160,000
7,000
18,000 REQUIRED:
(a) Calculate the predetermined overhead rate for each department. (b) Calculate the total manufacturing costs assigned to jobs in January 2007 in each
department. (c) Determine the underapplied or overapplied overhead for each department at 31 January
2007. (d) Assuming that JSB prices its job at cost plus 30 percent, calculate the price of the job for
January. (e) Journalize the January transactions including production, sales and the adjustment for
underapplied or overapplied overhead. QUESTION 3
GoldenTech Access Sdn. Bhd. (GoldenTech) had no work in process inventory or finished goods
inventory at the beginning of December. The company recorded that Job GT1 and GT5 were
conducted in the month. Job GT1 was completed and sold at the end of the month, and Job GT5
was incomplete. The company uses direct labour hours as the basis of the predetermined
manufacturing overhead rate. The following additional information for both Job GT1 and Job
GT5 in the month of December is available:
Estimated total fixed manufacturing overhead
Estimated variable manufacturing overhead per direct labour hour
Estimated total direct labour hours
Total actual manufacturing overhead costs incurred
Job GT1
RM30,000
RM18,000
2,900 Direct materials
Direct labour
Actual direct labour hours REQUIRED:
3 RM24,500
RM5
3,700
RM43,000
Job GT5
RM21,000
RM6,000
700 (a) Compute GoldenTech’s predetermined manufacturing overhead rate. Give your answer to
two decimal places. (b) Compute the amount of manufacturing overhead costs applied to Job GT1 and Job GT5. (c) Calculate the amount of overapplied or underapplied manufacturing overhead costs. (d) Calculate the finished goods inventory for Job GT1. 4

 

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