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    Solution Sunny Day MFG JOB ORDER COSTING

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    Danica Concepcion
    The document describes transactions for a manufacturing company during its first month of operations in July 2014. It includes purchasing materials, accepting job orders, issuing materials to jobs, payroll expenses, other overhead costs, applying overhead to jobs, and billing completed jobs. Journal entries and T-accounts are provided to record these transactions and flows through raw materials, work in process, finished goods, manufacturing overhead and cost of goods sold accounts.

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    Solution Sunny Day MFG JOB ORDER COSTING

    Uploaded by

    Danica Concepcion
    121 views3 pages
    The document describes transactions for a manufacturing company during its first month of operations in July 2014. It includes purchasing materials, accepting job orders, issuing materials to jobs, payroll expenses, other overhead costs, applying overhead to jobs, and billing completed jobs. Journal entries and T-accounts are provided to record these transactions and flows through raw materials, work in process, finished goods, manufacturing overhead and cost of goods sold accounts.

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    Solution-Sunny-Day-Mfg-JOB-ORDER-COSTING

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    The document describes transactions for a manufacturing company during its first month of operations in July 2014. It includes purchasing materials, accepting job orders, issuing materials to jobs, payroll expenses, other overhead costs, applying overhead to jobs, and billing completed jobs. Journal entries and T-accounts are provided to record these transactions and flows through raw materials, work in process, finished goods, manufacturing overhead and cost of goods sold accounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    121 views3 pages

    Solution Sunny Day MFG JOB ORDER COSTING

    Uploaded by

    Danica Concepcion
    The document describes transactions for a manufacturing company during its first month of operations in July 2014. It includes purchasing materials, accepting job orders, issuing materials to jobs, payroll expenses, other overhead costs, applying overhead to jobs, and billing completed jobs. Journal entries and T-accounts are provided to record these transactions and flows through raw materials, work in process, finished goods, manufacturing overhead and cost of goods sold accounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Illustration: Job Order Cost Flow

    Sunny Day Manufacturing Company has just started operation on July 1, 2014. The following are the
    transactions that transpired during the month of July:
    1. Purchased materials worth P350,000 on account.
    2. Accepted three job orders from different customers and assigned Job No. 700-A, 700-B and 700-C.
    3. Materials in the amount of P200,000 requisitioned and issued. 30% for Job 700-A, 25% for Job 700-
    B, and 35% for Job 700-C. The balance represents indirect materials.
    4. Payroll for the month totaled P357,200. Analysis of the payroll shows:
    Job 700-A 8,840 hours P 88,400
    Job 700-B 11,650 hours 116,500
    Job 700-C 11,980 hours 119,800
    Indirect labor 32,500
    5. The following overhead were incurred during the month in addition to indirect materials and indirect
    labor:
    Maintenance of factory equipment P 10,000
    Utilities (power, light & water) 25,000
    Depreciation of factory plant & equipment 15,000
    Insurance expired 8,000
    Miscellaneous factory expenses 5,000

    6. The company’s policy is to apply overhead to each job at the rate of P3.50 per direct labor hour.
    Any overhead variance is closed to cost of goods sold.
    7. Job Nos. 700-A and 700-B are completed and billed the customers at cost plus 40% mark-up.

    Required:
    1. Journal entries to record the transactions for the month.
    2. Prepare T-Accounts for Raw Materials, Work in Process, Finished Goods, Manufacturing Overhead
    and Cost of Goods Sold accounts.

    1) RM 350,000
    A/P 350,000

    2) No entry
    3) WIP 180,000
    700-A: 60,000
    700-B: 50,000
    700-C: 70,000
    FOH-control 20,000
    RM 200,000
    4) WIP 324,700
    700-A: 88,400
    700-B: 116,500
    700-C: 119,800
    FOH-control 32,500
    Accrued payroll 357,200

    5) FOH-control 63,000
    Cash or A/P (10+25+5) 40,000
    Acc dep 15,000
    Prep ins 8,000
    6) WIP 113,645
    700-A: 3.5 x 8,840 = 30,940
    700-B: 3.5 x 11,650 = 40,775
    700-C: 3.5 x 11,980 = 41,930
    FOH-applied 113,645

    700-A 700-B 700-C TOTAL


    DM 60,000 50,000 70,000 180,000
    DL 88,400 116,500 119,800 324,700
    FOH-applied 30,940 40,775 41,930 113,645
    TOTAL 179,340 207,275 231,730 618,345
    COGS COGS WIP, end

    FG, end = 0
    WIP, end = 231,730
    COGS = 386,615

    7) FG (700-A + 700-B) 386,615


    WIP 386,615
    COGS 386,615
    FG 386,615
    A/R (386,615 x 140%) 541,261
    Sales 541,261

    2) RM, end = 0 + 350,000 – 200,000 = 150,000


    WIP, end = 0 + 180,000 + 324,700 + 113,645 - 386,615 = 231,730
    FG, end = 0+ 386,615 - 386,615 = 0
    COGS = 386,615

    Disposition of FOH Variance:

    Actual FOH 115,500


    Applied FOH 113,645
    Underapplied 1,855

    COGS 1,855
    Over/under-applied FOH 1,855
    COGS-normal 386,615
    Under-applied FOH 1,855
    COGS-actual 388,470

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