Answered: Adams Co. uses a job order costing…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...

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Question

Adams Co. uses a job order costing system and the following information is available from its records. The company has 3 jobs in process: #5, #8, and #12.

Raw materials used P120,000

Direct labor per hour P8.50

Overhead applied based on direct labor cost 120%

Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and 25 percent; the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200, respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000.

What is the total amount of actual overhead?
How much overhead is applied to Work in Process?
If Job #12 is completed and transferred, what is the balance of Work in Process Inventory at the end of the period if overhead is applied at the end of the period?

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