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Chapter 5 - Job Order Costing ( Illustrative Examples)
BS accountancy (University of Cebu)
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CHAPTER 5: JOB ORDER COSTING (Illustrative Examples)
The Alexis Company had the following inventories on Aug 1 of the current year.
Finished Goods
50,000.00
Work in process 37,000.00
Materials
44,000.00
The work in process account controls 2 jobs
Job 401
Job 402
Materials
6,000.00
11,200.00
Labor
Factory
Overhead
5,000.00
6,000.00
4,000.00
4,800.00
15,000.00
22,000.00
The following information pertains to August operations
1. Materials puchased on account P56,000
Materials
56,000.00
Accounts Payable
56,000.00
2. Materials issued for production, P50,000 Of this amount, P6,000 was for indirect materials; the difference was
distributed: P11,000 to Job 401; P14,000 to Job 402; and P19,000 to Job 403
FOH Control
WIP
6,000.00
44,000.00
Materials
50,000.00
3. Materials returned to the warehouse from the factory for P1,600– of which P600 was for indirect materials,
the balance from Job 403
Materials
1,600.00
FOH Control
600.00
WIP
1,000.00
4. Materials returned to vendors P2,000
Accounts
Payable
2,000.00
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CHAPTER 5: JOB ORDER COSTING (Illustrative Examples)
Materials
2,000.00
5. Payroll after deducting P6,050 for withholding taxes, P3,200 for SSS Premiums, P750 for Medicare, and P2,400
for Pag-ibig was P65,600. The payroll due the employees was paid during the month
78,000.00
Payroll
Wages payable
Witholding Tax Payable
6,050.00
SSS Premium Payable
3,200.00
PhilHealth Premium Payable
Pag-ibig Funds Contributions
Payable
750.00
Wages payable
65,600.00
2,400.00
65,600.00
Cash
65,600.00
6. The payroll was distributed as follows: P20,800 to Job 401: P25,000 to Job 402, P21,000 to Job 403 and the
balance represents indirect labor
FOH Control
WIP
11,200.00
66,800.00
Payroll
78,000.00
7. The share of the employer for payroll was recorded– P4,000 for SSS Premiums, P750 for Medicare
Contributions, and P2,400 for Pag-ibig Funds
FOH Control
7,150.00
SSS Premium Payable
4,000.00
PhilHealth Premium Payable
750.00
Pag-ibig Funds Contributions Payable
2,400.00
8. Factory Overhead,other than any previously mentioned, amounted to P30,000 Included in this figure were
P6,000 for depreciation of factory building and equipment, and P1,900 for expired insurance on the factory. The
remaining overhead was unpaid at the end of August.
FOH Control
30,000.00
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CHAPTER 5: JOB ORDER COSTING (Illustrative Examples)
Accum depn - factory
Elec/utilities
6,000.00
Prepaid insurance - factory
FOH
1,900.00
Accounts payable
22,100.00
9. Factory Overhead was applied to production at the rate of 80% of direct labor cost
WIP
53,440.00
FOH Applied
53,440.00
10. Jobs 401 and 402 were completed and transferred to the finished goods warehouse
FG
144,440.00
WIP
144,440.00
11. Job 401 was shipped and billed at a gross profit of 40% of the cost
Accounts Rec
88,816.00
Sales
88,816.00
COGS
63,440.00
FG
63,440.00
REQUIRED
1. Journal entries to record the above transactions
2. Job order cost sheets
3. Cost of goods sold statement
JOB ORDER COST SHEETS:
Job 401
Materials
Labor
6,000.00
JE2
5,000.00
Factory Overhead
4,000.00
11,000.00
JE6
20,800.00
JE9
16,640.00
63,440.00
17,000.00
25,800.00
20,640.00
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CHAPTER 5: JOB ORDER COSTING (Illustrative Examples)
Job 402
Materials
Labor
11,200.00
JE2
Factory Overhead
6,000.00
4,800.00
14,000.00
JE6
25,000.00
JE9
20,000.00
81,000.00
25,200.00
31,000.00
Job 403
Materials
Labor
JE2
19,000.00
JE3
(1,000.00)
JE6
24,800.00
Factory Overhead
21,000.00
JE9
16,800.00
55,800.00
18,000.00
21,000.00
16,800.00
COST OF GOOD SOLDS:
Cost of goods sold statement
Direct Materials
43,000.00
Mat., beg
44,000.00
Add: Purch.
56,000.00
Less: Purch. Ret.
(2,000.00)
Mat. Avail. For use
98,000.00
Less: Mat., end
49,600.00
Mat. used
48,400.00
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CHAPTER 5: JOB ORDER COSTING (Illustrative Examples)
Direct Labor
66,800.00
Factory Overhead
Total Manufacturing
Cost
53,440.00
Add: WIP, beg
37,000.00
Cost of goods put into process
200,240.00
Less: WIP, end
(55,800.00)
Cost of Goods manufactured
144,440.00
Add: FG, beg
50,000.00
TGAS
194,440.00
Less: FG, end
(131,000.00
)
COGS
63,440.00
Underapplied FOH
310.00
COGS - actual
63,750.00
163,240.00
*job 401
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