Chapter 3, Problem 1TF15

1.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Predetermined overhead rate

Answer to Problem 1TF15

Predetermined overhead rate is $7.95

Explanation of Solution

Total manufacturing overhead cost Y

  $\begin{array}{l}Y=a+b_1{X}_1+b_2{X}_2\\ Y=\$25000+(1.40\times 2500)+(2.20\times 1500)\\ Y=\$25000+3500+3300\\ Y=\$31,800\end{array}$

The total manufacturing overhead is $31800

  $\begin{array}{l}\mathrm{Pr}edter\min edoverheadrate=\frac{Estimatedtotalmanufacturingoverhead\cos t}{Estimatedtotalamountoftheallocationbase}\\ =\frac{\$31,800}{4000}\\ =\$7.95\end{array}$

Predetermined overhead rate is $7.95

2.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Manufacturing overhead applied to Job P and Q

Answer to Problem 1TF15

Manufacturing overhead applied to Job P is $18,285 and Q is $13,515

Explanation of Solution

Manufacturing overhead applied to job P and Q

	Particular	Job P	Job Q
a.	Predetermined overhead rate	$7.95	$7.95
b.	Actual machine hour used	2300	1700
$a\times b$	Manufacturing overhead applied	$18,285	$13,515

Manufacturing overhead applied to Job P is $18,285 and Q is $13,515

3.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Total manufacturing cost applied to Job P

Answer to Problem 1TF15

Total manufacturing cost applied to Job P

Explanation of Solution

Total manufacturing cost assigned to job P

Particular	Amount $
Direct materials	13,000
Direct labor	21,000
Manufacturing overhead	18,285
Total manufacturing cost	52,285

Total manufacturing cost applied to Job P is $52,285

4.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: The unit product cost for job P

Answer to Problem 1TF15

The unit product cost for job P is $2614.25

Explanation of Solution

Unit product cost:

  $\begin{array}{l}Unitproductcost=\frac{Totaljob\cos t}{Numberofunits}\\ =\frac{\$52,285}{20}\\ =\$2614.25\end{array}$

The unit product cost for job P is $2614.25

5.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Total manufacturing cost applied to Job Q

Answer to Problem 1TF15

Total manufacturing cost applied to Job Q is $29,015

Explanation of Solution

Total manufacturing cost assigned to job Q

Particular	Amount $
Direct materials	8,000
Direct labor	7500
Manufacturing overhead	13,515
Total manufacturing cost	29,015

Total manufacturing cost applied to Job Q is $29,015

6.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: The unit product cost for job Q is $967.167

Answer to Problem 1TF15

The unit product cost for job Q

Explanation of Solution

Unit product cost:

  $\begin{array}{l}Unitproductcost=\frac{Totaljob\cos t}{Numberofunits}\\ =\frac{\$29,015}{30}\\ =\$967.167\end{array}$

The unit product cost for job Q is $967.167

7.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Selling price per unit of job P and Job Q.

Answer to Problem 1TF15

Selling price per unit of job P is $7705.65 and Job Q is $1740.90

Explanation of Solution

Selling price of Job P and Job Q

Particular	Job P ($)	Job Q ($)
Total manufacturing cost	52,285	29,015
Markup (80% of total manufacturing cost)	41,828	23,212
Selling price of job 550	94,113	52,227

Selling price of job P is $94,113 and Q is $52,227

Selling price of P:

  $\begin{array}{l}Sellingpriceperunit=\frac{Sellingpriceforjob}{numberofunits}\\ =\frac{\$94,113}{20}\\ =\$7705.65\end{array}$

Selling price of Q:

  $\begin{array}{l}Sellingpriceperunit=\frac{Sellingpriceforjob}{numberofunits}\\ =\frac{\$52,227}{30}\\ =\$1740.90\end{array}$

Selling price per unit of job P is $7705.65 and Job Q is $1740.90

8.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Cost of goods sold.

Answer to Problem 1TF15

Cost of goods sold is $81,300

Explanation of Solution

Particular	Amount $
Manufacturing cost of Job P	52,285
Manufacturing cost of Job Q	29,015
Cost of goods sold	81,300

Thus, Cost of goods sold is $81,300

9.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Predetermined overhead rate in the molding department.

Answer to Problem 1TF15

Predetermined overhead rate in the molding department is $12.20

Explanation of Solution

Total manufacturing overhead cost Y

  $\begin{array}{l}Y=a+bX\\ Y=\$10000+1.40\times 2500)\\ Y=\$10000+3500\\ Y=\$13,500\end{array}$

The total manufacturing overhead for molding is $13,500

  $\begin{array}{l}\mathrm{Pr}edter\min edoverheadrate=\frac{Estimatedtotalmanufacturingoverhead\cos t}{Estimatedtotalamountoftheallocationbase}\\ =\frac{\$13,500}{2500}\\ =\$5.40\end{array}$

Predetermined overhead rate in the molding department is $5.40

For fabrication department:

Total manufacturing overhead cost Y

  $\begin{array}{l}Y=a+bX\\ Y=\$15,000+2.20\times 1500\\ Y=\$15000+3300\\ Y=\$18,300\end{array}$

The total manufacturing overhead for molding is $18,300

  $\begin{array}{l}\mathrm{Pr}edter\min edoverheadrate=\frac{Estimatedtotalmanufacturingoverhead\cos t}{Estimatedtotalamountoftheallocationbase}\\ =\frac{\$15,800}{1500}\\ =\$12.20\end{array}$

Predetermined overhead rate in the molding department is $12.20

10.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Manufacturing overhead applied to Job P and Q

Answer to Problem 1TF15

Manufacturing overhead applied to Job P is $9180 and Q is $4320

Explanation of Solution

Manufacturing overhead applied to job P and Q from molding department

	Particular	Job P	Job Q
a.	Predetermined overhead rate	$5.40	$5.40
b.	Actual machine hour used	2700	800
$a\times b$	Manufacturing overhead applied	$9180	$4320

Manufacturing overhead applied to Job P is $9180 and Q is $4320

11.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Manufacturing overhead applied to Job P and Q

Answer to Problem 1TF15

Manufacturing overhead applied to Job P is $7320 and Q is $$10,980

Explanation of Solution

Manufacturing overhead applied to job P and Q from fabrication

	Particular	Job P	Job Q
a.	Predetermined overhead rate	$12.20	$12.20
b.	Actual machine hour used	600	900
$a\times b$	Manufacturing overhead applied	$7320	$10980

Manufacturing overhead applied to Job P is $7320 and Q is $$10,980

12.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Unit product cost job P

Answer to Problem 1TF15

Unit product cost job P is $2,525

Explanation of Solution

Unit product cost of job P

Particular	Amount $
Direct materials	13000
Direct labor	21000
Manufacturing overhead
Molding department	9180
Fabrication department	7320
Total manufacturing cost	50500
Number of units	20
Unit product cost	2525

Unit product cost job P is $2,525

13.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Unit product cost job Q

Answer to Problem 1TF15

Unit product cost job Q is $1027

Explanation of Solution

Unit product cost of job Q

Particular	Amount $
Direct materials	8000
Direct labor	7500
Manufacturing overhead
Molding department	4320
Fabrication department	10980
Total manufacturing cost	30800
Number of units	39
Unit product cost	1027

Unit product cost job Q is $1027

14.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Selling price for Job P and Job Q

Answer to Problem 1TF15

Selling price for Job P is $4545 and Job Q is $1848

Explanation of Solution

Selling price of job P and Q

Particular	Job P $	Job Q $
Total manufacturing cost	50,500	30,800
Markup (80% of Total manufacturing cost)	40,400	24,640
Selling price	90,900	55,440

Selling price for Job P is $90,900 and Job Q is $55,440

Selling price per unit

Particular	Job P $	Job Q $
Selling price	90,900	55,440
Number of units	20	30
Selling price per unit	4545	1848

Selling price for Job P is $4545 and Job Q is $1848

15.

To determine

Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.

To calculate: Cost of goods sold.

Answer to Problem 1TF15

Cost of goods sold is 81,300

Explanation of Solution

Cost of goods sold

Particular	Amount $
Manufacturing cost of job P	50,500
Manufacturing cost of job Q	30,800
Cost of goods sold	81,300

Cost of goods sold is 81,300