Dynamic Company has only Job 844 in process on March 1 of the current year. The job has been charged with P2,000 of direct material cost, P2,500 of direct labor cost, and P1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate based on direct labor cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During March, the following activity and amounts were recorded by the company: Raw materials (all direct materials): Purchased during the month Used in production P31,500 P30,500 Labor: Direct labor hours worked during the month Direct labor cost incurred Indirect labor costs incurred 2,500 P26,500 P5,500 Manufacturing overhead costs incurred (total) P18,500 Inventories: Raw materials (all direct) March 31 Work in process, March 3, contains 5,150 of direct materials and contains P5,500 of direct labor P7,500 cost. Jared Company provided the inventory balances and manufacturing cost data for the month of January below: Inventories January 1 P 30,000 15,000 65,000 January 31 P 40,000 20,000 50,000 Direct materials Work in process Finished goods Factory overhead applied Cost of goods manufactured Direct materials used Month of January P150,000 515,000 190,000 Actual factory overhead 144,000 Under Jared's cost system, any over- and underapplied overhead is closed to the cost of goods sold account at the end of the calendar year. What would cost of goods sold be if under- or overapplied overhead were closed to cost of goods sold?
Dynamic Company has only Job 844 in process on March 1 of the current year. The job has been charged with P2,000 of direct material cost, P2,500 of direct labor cost, and P1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate based on direct labor cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During March, the following activity and amounts were recorded by the company: Raw materials (all direct materials): Purchased during the month Used in production P31,500 P30,500 Labor: Direct labor hours worked during the month Direct labor cost incurred Indirect labor costs incurred 2,500 P26,500 P5,500 Manufacturing overhead costs incurred (total) P18,500 Inventories: Raw materials (all direct) March 31 Work in process, March 3, contains 5,150 of direct materials and contains P5,500 of direct labor P7,500 cost. Jared Company provided the inventory balances and manufacturing cost data for the month of January below: Inventories January 1 P 30,000 15,000 65,000 January 31 P 40,000 20,000 50,000 Direct materials Work in process Finished goods Factory overhead applied Cost of goods manufactured Direct materials used Month of January P150,000 515,000 190,000 Actual factory overhead 144,000 Under Jared's cost system, any over- and underapplied overhead is closed to the cost of goods sold account at the end of the calendar year. What would cost of goods sold be if under- or overapplied overhead were closed to cost of goods sold?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Dynamic Company has only Job 844 in process on March 1 of the current year. The job has been
charged with P2,000 of direct material cost, P2,500 of direct labor cost, and P1,750 of manufacturing
overhead cost. The company assigns overhead cost to jobs at a predetermined rate based on direct
labor cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the
month.
During March, the following activity and amounts were recorded by the company:
Raw materials (all direct materials):
Purchased during the month
Used in production
P31,500
P30,500
Labor:
Direct labor hours worked during the month
Direct labor cost incurred
Indirect labor costs incurred
2,500
P26,500
P5,500
Manufacturing overhead costs incurred (total)
P18,500
Inventories:
Raw materials (all direct) March 31
Work in process, March 3, contains 5,150 of direct materials and contains P5,500 of direct labor
P7,500
cost.
Transcribed Image Text:Jared Company provided the inventory balances and manufacturing cost data for the month of
January below:
Inventories
January 1
P 30,000
15,000
65,000
January 31
P 40,000
20,000
50,000
Direct materials
Work in process
Finished goods
Factory overhead applied
Cost of goods manufactured
Direct materials used
Month of January
P150,000
515,000
190,000
Actual factory overhead
144,000
Under Jared's cost system, any over- and underapplied overhead is closed to the cost of
goods sold account at the end of the calendar year. What would cost of goods sold be if
under- or overapplied overhead were closed to cost of goods sold?
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