Comprehensive Job Costing

Week 2 Activity

# 31 Comprehensive Job Costing

Moody Blues Chocolate Factory uses job costing to cost its products.  In the first quarter of operations, the company incurred the following material and labor costs in a manufacturing a batch of its chocolate candies (the company uses normal costing to apply overhead to products and uses machine hours as the cost driver).

Materials Data: Direct material purchases Direct materials used in production (cost)   $ 100,000    85,000
Labor Data: Direct Labor costs   $ 60,000
Manufacturing Overhead Data: Overhead application rate per machine hour Machine Hour used   9.00 10,000
Inventory Data: Transferred to Finished Goods Cost of Goods sold during the quarter   210,000 190,000


  • Calculate the direct materials ending inventory
  • Calculate the work in progress ending inventory
  • Calculate the finished goods ending inventory

Finished Goods Ending Inventory = $20,000

  • At the end of the quarter, Moody Blues’ actual manufacturing overhead costs totalled $80,000.  Calculate the over or underapplied overhead for the period.

# 37 Process Costing Using FIFO Method

Riley’s Paper Company manufactures computer paper for laser printers.  The following information is related to production costs incurred in the manufacturing process during the month of March:

  Reams of Paper Production Costs
Beginning Work in Progress (40% complete)        35,000 89,170
Current Period Production 93,000 394,830
Ending Work in Progress (65% complete) 20,000  

The company uses FIFO method of computing equivalent units and assigning product costs.  Production costs include both the cost of raw materials and conversion costs that are incurred uniformly in the production process.


  • How many reams of paper were completed in March?
  • Of the reams of paper completed in March, how many were started and completed during the month?
  • How many equivalent finished units did the company complete in March?
  • What is the cost per equivalent unit?
  • Calculate the cost of ending work in progress inventory and the cost of goods manufactured in March.
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