| Course | AC239 Managerial Accounting |
|---|---|
| Unit | Unit 5 |
| Paper type | Job order costing problem |
| Length | About 570 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC239 Unit 5
Job 418, Three Hundred Beds With a Logo: A Unit 5 Job Order Costing Problem From Requisition to Finished Goods
[Student Name]
Purdue University Global
AC239: Managerial Accounting
Unit 5 Job Order Costing Problem
[Instructor Name]
[Date]
Burrow Bedworks, Job 418, its customer and all figures are composite; the textbook and the costing studies cited are real.
Predetermined Overhead Rate
Estimated manufacturing overhead for the year: $468,000. Estimated direct labor hours: 36,000. Rate: $468,000 divided by 36,000 equals $13.00 per direct labor hour. The rate is set before the year begins, so jobs can be costed as they finish rather than waiting for actual overhead to be known (Franklin et al., 2019).
Job Cost Sheet
Job 418. Customer: Harborview Pet Lodges. Quantity: 300 large beds with embroidered covers. Started March 3. Completed March 14.
Direct materials:
1. Requisition 2201, memory foam cores: $5,400.
2. Requisition 2207, cover fabric: $2,850.
3. Requisition 2214, zippers: $630.
4. Requisition 2219, embroidery thread for the logo, traced to this job: $240.
Total direct materials: $9,120.
Direct labor:
1. Cutting, time tickets 3301 to 3306: 120 hours at $19.00, $2,280.
2. Sewing, time tickets 3307 to 3322: 260 hours at $18.50, $4,810.
3. Embroidery, time tickets 3323 and 3324: 40 hours at $21.00, $840.
Total direct labor: 420 hours, $7,930.
Manufacturing overhead applied: 420 hours times $13.00 equals $5,460.
Summary: direct materials $9,120; direct labor $7,930; overhead applied $5,460. Total job cost $22,510. Unit cost: $22,510 divided by 300 beds equals $75.03.
Journal Entries
1. Materials issued. Work in Process, Job 418, debit $9,120; Raw Materials Inventory, credit $9,120.
2. Labor assigned. Work in Process, Job 418, debit $7,930; Factory Wages Payable, credit $7,930.
3. Overhead applied. Work in Process, Job 418, debit $5,460; Manufacturing Overhead, credit $5,460.
4. Job completed. Finished Goods Inventory, debit $22,510; Work in Process, credit $22,510.
5. Job shipped and billed at $105 per bed. Accounts Receivable, debit $31,500; Sales, credit $31,500. Cost of Goods Sold, debit $22,510; Finished Goods Inventory, credit $22,510.
The embroidery thread is treated as direct material here because a separate requisition traces it to Job 418, while ordinary sewing thread for the same beds stays in overhead because nobody measures how much each job uses.
Reading the Job
Gross profit on the job is $31,500 minus $22,510, or $8,990, about 28.5 percent of the selling price. The overhead figure deserves caution. It was applied at the plant-wide rate, but embroidery uses an expensive machine that a labor-hour rate may undercharge. Research on product costing has shown that a single volume-based rate tends to overcost simple, high-volume products and undercost complex, low-volume ones (Cooper & Kaplan, 1988). Job 418 is exactly the kind of custom work that may be undercosted, so the $8,990 margin may be smaller than it looks.
End of Period
At year end, actual overhead will be compared with the total applied. Any difference, underapplied or overapplied, is usually closed to cost of goods sold when small, which adjusts every job's cost after the fact. Job costing of this kind grew up in custom shops and machine works in the late nineteenth century, when owners first needed to know what each order had cost before quoting the next one (Johnson & Kaplan, 1987). For Burrow Bedworks the same need applies: Harborview has asked for a repeat order, and the next quote should start from this cost sheet.
References
Cooper, R., & Kaplan, R. S. (1988). Measure costs right: Make the right decisions. Harvard Business Review, 66(5), 96-103.
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 2: Managerial accounting. OpenStax. https://openstax.org/details/books/principles-managerial-accounting
Johnson, H. T., & Kaplan, R. S. (1987). Relevance lost: The rise and fall of management accounting. Harvard Business School Press.
The Purdue Global AC239 Unit 5 instructions
In the fifth AC239 unit, students cost a single job and record its movement through inventory. Compute the predetermined overhead rate first from estimated overhead and the estimated allocation base. Build a job cost sheet with a header, a direct materials section listing each requisition, a direct labor section listing time tickets with hours and rates, and overhead applied at the predetermined rate times the job's actual base. Total the sheet and compute a unit cost. Then journalize materials issued, labor assigned, overhead applied, completion to finished goods and, if the job ships, the sale and its cost. Mention what happens to over- or underapplied overhead at year end. Two pages normally covers it, with the textbook cited in APA 7 for the rate logic.
How this AC239 Unit 5 example is built
The sample computes the $13.00 rate before the cost sheet. Job 418's header names the kennel chain, quantity and dates. The materials section lists foam cores, fabric, zippers and logo thread by requisition number, and the labor section lists cutting, sewing and embroidery tickets. Applied overhead is 420 hours at $13.00. The summary reaches $22,510 and $75.03 per bed. Five numbered entries follow, from Work in Process through the sale at $105 a bed. The highlighted sentence explains why the logo thread is direct while ordinary thread stays in overhead. A reading computes the job's $8,990 gross profit, cites research on how volume-based rates distort custom work, and a final section covers closing over- or underapplied overhead.
Reading the AC239 Unit 5 grading rubric
Job order problems are graded on the predetermined rate, the cost sheet and the entries. The rate must be computed from estimates, not actuals. Overhead applied must use the job's actual base times the predetermined rate. Each section of the cost sheet should be traceable to requisitions and tickets. The unit cost must divide the correct total by the correct quantity. Entries must move costs from Raw Materials and Wages to Work in Process, then to Finished Goods and Cost of Goods Sold. A reading on margin or overhead accuracy earns interpretation credit in this unit. Format and APA 7 citations close the scoring.
AC239 Unit 5 help from the desk
The most frequent job costing error is applying overhead with actual overhead divided by actual hours, which defeats the purpose of a predetermined rate. Others apply overhead to direct labor cost when the base is hours. Indirect materials are charged to the job. The completion entry credits Raw Materials instead of Work in Process. The sale entry forgets cost of goods sold. Unit cost is computed before overhead is added. With your job's requisitions and time tickets in hand, a member of our team can assemble the cost sheet and entries for your section's problem.
Get an AC239 Unit 5 example written to your instructions
The job's requisitions, time tickets, estimated overhead and allocation base all come from the Unit 5 problem your section issued; send those with the rubric and instructions. The cost sheet and entries return in 24-48h, the overhead difference closed and explained in a sentence. Your first custom sample costs nothing. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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AC239 Unit 5 questions, answered
Why not wait for actual overhead before costing the job?
Because the job has to be priced, billed or valued in inventory long before the year's overhead is known, and some overhead, such as heating, is lumpy across months. A predetermined rate smooths that out. The cost of the method is the difference that appears at year end between overhead applied and overhead incurred, which the sample closes out explicitly.
Which allocation base does the sample use?
Whichever the problem specifies, usually direct labor hours, direct labor cost or machine hours. The choice matters in AC239 because a base that does not drive overhead distorts job costs, overcharging labor-heavy jobs in an automated shop, for example. When the problem asks which base is better, the sample adds a sentence comparing how closely each tracks the overhead it allocates.
What if the problem has several jobs instead of one?
Then each job gets its own cost sheet, and a summary schedule lists every job with its status at period end: still in process, finished but unsold, or sold. The balances in Work in Process and Finished Goods must equal the totals of the matching jobs, and that tie-out is usually where multi-job problems in AC239 place their heaviest marks.
Where can I find a free AC239 Unit 5 sample paper?
This page has a complete AC239 Unit 5 job order costing problem for a 300-bed custom order, with the overhead rate, the job cost sheet, a $75.03 unit cost and five journal entries.
How is overhead applied in the AC239 Unit 5 sample?
At the predetermined rate of $13.00 per direct labor hour, set from $468,000 of estimated overhead over 36,000 estimated hours. Job 418 used 420 hours, so $5,460 was applied.