Question 1

Crazy Puzzles started and finished Job 67, a batch of 500 jigsaw puzzles
during June. The job required $3,200 of direct material and 38 hours of direct
labour at $22 per hour. The predetermined overhead rate is $11 per direct labour
hour.
Required:
1. prepare journal entries to show the incurrence of production costs and
the completion of job 67
2. What was the cost per puzzle for job 67?
Cost per unit =4454/500
8.908 $
direct material $3,200
direct labour 38hours@$22ph $836
manufacturing overhead applied 38hours2$11ph $418
$4,454
Question 2
Gloworm Glass has the following information for the year ended 30 june
Budgeted direct labour cost 77,000 hours @$17 per hour
Actual direct labour cost 79,000 hours @$18 per hour
Budgeted manufacturing overhead $993,300
Actual Manufacturing overhead
Depreciation 225,000 $
Property taxes 19,000 $
indirect labour 79,000 $
Supervision 21,000 $
electricity 58,000 $
Insurance 32,000 $
Rent 295,000 $
Indirect materials 79,000 $
Total Manuf overhead 808,000 $
Indirect Materials
Opening Inventory 46,000 $
Purchases 95,000 $
Closing Inventory 62,000 $
Indirect Mats used 79,000 $
Required
1 Calculate the firm's POHR based on direct labour hours
2 Calculate the underapplied or overapplied overhead for the year
3 Prepare a journal entry to close the overhead to COGS
4 What caused the over or underapplied overhead?
Question 3
South Fashions, which uses job order costing, had 2 jobs in progress at the start
of the year. Job 101 $168,000 and job 102 $107,000
The company applies overhead on the basis of machine hours
Budgeted overhead was $1,680,000 and budgeted machine activity for the year
was 32,000 hours
The company worked on the following jobs in the first quarter
Number
Direct
Material Direct Labour
Machine
Hours
101 42,000 $ 70,000 $ 2,400
102 - $ 44,000 $ 1,400
103 88,000 $ 130,000 $ 4,000
Manufacturing overhead was depreciation $68,000, indirect labour $120,000
indirect materials $10,000 and other factory costs $279,000
South Fashions completed job 101 and job 102, and job 102 was sold on credit
for $350,000
Required:
Determine the predetermined overhead application rate
prepare journal entries to record
issue of direct materials
manufacturing overhead incurred
application of overhead to production
completion of jobs 101 and 102
Sale of job 102
Question 4
What are the main purposes of product costing?
For each purpose, discuss how often management would require
this information