1. Lucy Sportswear manufactures a specialty line of T-shirts. The company uses a job-order costing system. During March, the following costs were incurred on Job ICU2: direct materials P13,700 and direct labor P4,800. In addition, selling and shipping costs of P7,000 were incurred on the job. Manufacturing overhead was applied a the rate of P25 per machine-hour and Job ICU2 required 800 machine-hours. If Job ICU2 consisted of 7,000 shirts, the Cost of Goods Sold per shirt was: a. P6.50 b. P6.00 C. P5.70 d. P5.50
1. Lucy Sportswear manufactures a specialty line of T-shirts. The company uses a job-order costing system. During March, the following costs were incurred on Job ICU2: direct materials P13,700 and direct labor P4,800. In addition, selling and shipping costs of P7,000 were incurred on the job. Manufacturing overhead was applied a the rate of P25 per machine-hour and Job ICU2 required 800 machine-hours. If Job ICU2 consisted of 7,000 shirts, the Cost of Goods Sold per shirt was: a. P6.50 b. P6.00 C. P5.70 d. P5.50
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1. Lucy Sportswear manufactures a specialty line of T-shirts. The company
uses a job-order costing system. During March, the following costs were
incurred on Job ICU2: direct materials P13,700 and direct labor P4,800. In
addition, selling and shipping costs of P7,000 were incurred on the job.
Manufacturing overhead was applied a the rate of P25 per machine-hour
and Job ICU2 required 800 machine-hours. If Job ICU2 consisted of 7,000
shirts, the Cost of Goods Sold per shirt was:
a.
P6.50
b. P6.00
С.
P5.70
d. P5.50
2. At the end of the year, overhead applied was P35,000,000. Actual overhead
was P34,200,000. Closing over/under applied overhead into cost of goods
sold would cause net income to increase/decrease by?
Increase by P800,000
a.
b. Decrease by P800,000
Not effect net income.
С.
d. Decrease net income by P200,000
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