PROBLEM 2: ABC Company manufactures special purpose machines to order. Because the products are tailored for the customers' preference, completed units are automatically sold to gain 20% profit on billed price. On 1/1/2017 there were two jobs in process, 405 and 406. The following costs were applied to them in 2016: lob 405 P 5,000 Iob 406 P 8,000 Direct material Direct labor 4,000 3,000 3.300 P14.300 Overhead 4,400 P13.400 Total During January of 2017, the following transactions took place: • Raw material costing P40,000 was purchased on account. • Jobs #407, 408, and 409 were started and the following costs were applied to them: Iob 407 Iob 408 Р3.000 5,000 Job 409 P 7.000 4.000 Direct materials P10,000 6,000 Direct labor • Job P405 and Job #406 were completed after incurring additional direct labor costs of P2,000 and P4,000, respectively. Job 408 is also completed on January. • Wages paid to production employees during January totaled P25,000. Depreciation of factory equipment for the month of January totaled P10,000. Utilities bills (where 30% of the utilities are related to office, while the remaining can be attributed to the factory) in the amount of P10,000 were paid for December 2016 operations. • Supplies costing P2,000 were used. Only 40% is used by the factory, while the 60% is used for promotional activities (flyers, etc.). Office rent totaling P5,000 were billed for January operations. • Miscellaneous overhead expenses totaled P13,300 for January. Any over- or underapplied overhead is considered material for the company. REQUIRED: How much is the Net income for January?
PROBLEM 2: ABC Company manufactures special purpose machines to order. Because the products are tailored for the customers' preference, completed units are automatically sold to gain 20% profit on billed price. On 1/1/2017 there were two jobs in process, 405 and 406. The following costs were applied to them in 2016: lob 405 P 5,000 Iob 406 P 8,000 Direct material Direct labor 4,000 3,000 3.300 P14.300 Overhead 4,400 P13.400 Total During January of 2017, the following transactions took place: • Raw material costing P40,000 was purchased on account. • Jobs #407, 408, and 409 were started and the following costs were applied to them: Iob 407 Iob 408 Р3.000 5,000 Job 409 P 7.000 4.000 Direct materials P10,000 6,000 Direct labor • Job P405 and Job #406 were completed after incurring additional direct labor costs of P2,000 and P4,000, respectively. Job 408 is also completed on January. • Wages paid to production employees during January totaled P25,000. Depreciation of factory equipment for the month of January totaled P10,000. Utilities bills (where 30% of the utilities are related to office, while the remaining can be attributed to the factory) in the amount of P10,000 were paid for December 2016 operations. • Supplies costing P2,000 were used. Only 40% is used by the factory, while the 60% is used for promotional activities (flyers, etc.). Office rent totaling P5,000 were billed for January operations. • Miscellaneous overhead expenses totaled P13,300 for January. Any over- or underapplied overhead is considered material for the company. REQUIRED: How much is the Net income for January?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter2: Job Order Costing
Section: Chapter Questions
Problem 3CMA: Lucy Sportswear manufactures a specialty line of T-shirts using a job order cost system. During...
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