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Sharp Company
You are asked to bring the following incomplete accounts of Sharp Printing, Inc. up to date through January 31, 201
the data that appear in the T-accounts as well as additional information given in items (a) through (i).
Sharp’s job-order costing system has two direct cost categories (direct material and direct manufacturing labor) and
cost pool (manufacturing overhead, which is allocated using direct manufacturing labor costs).
Additional Information:
Manufacturing department overhead is allocated using a budgeted rate set every December. Managemen
a. next year's overhead and next year's direct manufacturing labor costs. The budget for 2018 is P400,000
manufacturing labor and P600,000 of manufacturing overhead.
The only job unfinished on January 31, 2018 is No. 419, on which direct manufacturing labor costs are P2,00
b.
direct manufacturing labor hours) and direct material costs are P8,000.
c. Total material placed into production during January is P90,000.
d. Cost of goods completed during January is P180,000.
e. Material inventory as of January 31, 2018 is P20,000.
f. Finished goods inventory as of January 31, 2018 is P15,000.
All plant workers earn the same wage rate. Direct manufacturing labor hours for January totals 2,500. Othe
g.
supervision totals P10,000.
The gross plant payroll for January pay periods totals P52,000. Ignore withholdings. All personnel are paid o
h.
basis.
i. All "actual" manufacturing department overhead incurred during January has already been posted.
Answers:
a Material purchased during January P 95,000
b Cost of Goods Sold during January 185,000
c Direct Manufacturing Labor Costs incurred during January 40,000
d Manufacturing Overhead Allocated during January 60,000
e Balance, Wages Payable Control, December 31, 2017 5,000
f Balance, Work in Process Inventory Control, January 31, 2018 13,000
g Balance, Work in Process Inventory Control, December 31, 2017 3,000
h Balance, Finished Goods Inventory Control, January 31, 2018 15,000
i Manufacturing Overhead underapplied or overapplied for January 3,000
Other Computation:
a 15000+Material Purchased-20000=90000
b 20000+180000-15000
c (2000/125)*2500hrs
d (600000/400000)*40000
e Beg+50000-52000=3000
f 2000+(2000*1.5)+8000
g Beg+90000+40000+60000-180000=13000
h 20000+180000-185000
i 60000-57000
nc. up to date through January 31, 2018. Consider
rmation given in items (a) through (i).
ial and direct manufacturing labor) and one indirect
direct manufacturing labor costs).
(overapplied)
Answers:
a Compute beginning direct materials inventory. P 21,000
b Compute beginning WIP inventory. 1,500
c Compute beginning finished goods inventory. 22,000
d Compute actual factory overhead incurred. 52,000
Jordan Company has two departments, X and Y. Overhead is applied based on direct labor cost in Departmen
hours in Department Y. The following additional information is available:
Answers:
a Compute the budgeted factory overhead rate for Department X. 125%
b Compute the budgeted factory overhead rate for Department Y. P 4.50 per hour
c What is the total overhead cost of Job 10? P 27,250
d If Job 10 consists of 50 units of product, what is the unit cost of this job? P 1,565 per unit
d If Job 10 consists of 50 units of product, what is the unit cost of this job?
Department Y
165,000
180,000
40,000 mh
Department Y
16,000
14,000
3,000 mh
per hour
per unit
Harmony Company manufactures picture frames of all sizes and shapes and uses a job-order costing system.
each production run. The following costs relate to the current run:
The actual cost of a spoiled picture frame is P7.00. During the year 170 frames are considered spoiled. Each sp
spoilage is considered a part of all jobs.
Required:
a. Labor hours are used to determine the predetermined overhead rate. What is the predetermined overhead r
b. Prepare the journal entry needed to record the spoilage.
c. Prepare the journal entry if the spoilage relates only to Job #12 rather than being a part of all production run
Answers:
a Predetermined overhead rate per direct labor hour (P/hr)
b Spoiled Goods P
Overhead Control
Work in Process Inventory
c Spoiled Goods P
Work in Process Inventory - Job # 12
Predetermined overhead rate per direct labor hour (P) = 173,500 = 1.735
100,000
s a job-order costing system. There is always some spoilage in
elate to the current run:
160,000
25,000
11,500
100,000
e considered spoiled. Each spoiled frame can be sold for P4. The
of all jobs.
1.735
680
510
P 1,190
680
P 680