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Job Order Problem | PDF | Cost Of Goods Sold | Accounting
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Job Order Problem

The document outlines job order cost details for Otto Company, requiring journal entries for various transactions related to direct materials, payroll, and factory overhead. It also presents inventory details for Noah as of March 1, 2025, and includes operations information for March 2025, necessitating journalization of transactions and preparation of an inventory schedule. Key tasks involve calculating costs for job orders, applying factory overhead, and tracking inventory movements.

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49 views2 pages

Job Order Problem

The document outlines job order cost details for Otto Company, requiring journal entries for various transactions related to direct materials, payroll, and factory overhead. It also presents inventory details for Noah as of March 1, 2025, and includes operations information for March 2025, necessitating journalization of transactions and preparation of an inventory schedule. Key tasks involve calculating costs for job orders, applying factory overhead, and tracking inventory movements.

Uploaded by

mykellandreihablado
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
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Problem 1

The following job order cost details pertains to the three job orders that
were in process at Otto Company during January.
Job 66 Job 67
Job 68
Cost charged in prior period 50,000
25,000 -
Cost added in January:
Direct Materials 25,000 35,000
60,000
Direct Labor 35,000
45,000 55,000
Factory overhead (P50 per machine hour) ? ?
?
January machine hours used 720 640 560

Required: Prepare appropriate journal entry to record each of the following


transactions.
a) Direct materials were issued from materials storeroom to work in
process
b) Payroll was distributed to work in process
c) Factory overhead was applied to production for the period
d) Job Orders 66 and 67 were completed and transferred to finished
goods storeroom.
Problem 2

Noah had the following inventories on March 1, 2025:


Finished Goods (Job 920) 15,000
Labor 19,070
Materials 14,000
The work in process account controls 3 jobs:
Job 921 Job 922
Job 923
Materials 2,800 3,400 1,600
Labor 2,100 2,700 1,350
Applied Factory Overhead 1,680 2,160 1,080
Total 6,580 8,260 4,230

The following information pertains to March 2025 operations:


1. Materials purchased and received cost P22,000 at terms n/30
2. Materials requisitioned for production cost P21,000. Of this amount,
P2,400 was for indirect materials, the difference was distributed as
follows:
a) P5,300 to Job 921 b) P7,400 to Job 922 c) P 5,900 to Job 923
3. Materials returned to the storeroom from the factory totaled P600, of
which P200 was for indirect materials, the balance from Job 922.
4. Materials returned to vendors totaled P800.
5. Payroll of P38,000 was accrued in March 2025.
6. Of the payroll, direct labor represented 55%; indirect labor, 20%; Sales
salaries, 15%; and administrative salaries, 10%. The direct labor cost
was distributed; P6,420 to Job 921; P8,160 to Job 922; and P6,320 to
Job 923.
7. Factory overhead, other than any previously mentioned, amounted to
P9,404.50. Included in this figure were P2,000 for depreciation of
factory building and equipment and P250 for expired insurance on
factory. The remaining overhead, P7,154.50, was unpaid at the end of
March 2025.
8. Factory overhead applied to production at a rate of 80% of the direct
labor cost to be charged to the three (3) jobs, based on the labor cost
for March 2025.
9. Job 921 and Job 922 were completed and transferred to the finished
goods warehouse.
10. Both Jobs 920 and 921 were sold and billed at a gross profit of
40% of the cost of goods sold.
11. Cash collection from accounts receivable during March 2025
were P40,000.

Required:
1) Journalize the March 2025 transactions
2) Prepare a schedule of Inventories on March 31, 2025.

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