Asakapa Corporation manufactures eighteenth-century, classical-style furniture. It uses a job costing system that applies factory overhead on the basis of direct labor hours. Budgeted factory overhead for the year 2014 was P1,235,475, and management budgeted P86,700 direct labor-hours. These transactions were recorded during August: a. Purchased 5,000 square feet of oak on account at P25 per square foot. b. Purchased 50 gallons of glue on account at P36 per gallon (indirect material). C. Requisitioned 3,500 square feet of oak and 30.5 gallons of glue for production. d. Incurred payroll costs of P187,000. Of this amount, P46,000 were indirect labor costs; direct labor personnel earned P22 per hour on average. e. Paid factory utility bill, P15,320 in cash. f. August's insurance cost for the manufacturing property and equipment was P3,500. The premium had been paid in March. g. Incurred P8,200 depreciation on manufacturing equipment for August. h. Recorded P2,400 depreciation on an administrative asset. i. Paid advertising expense in cash, P5,500. j. Incurred and paid other factory overhead costs, P13,500. k. Incurred miscellaneous selling and administrative expenses, P13,250. l. Applied factory overhead to production on the basis of direct labor hours. m. Completed goods costing P146,000 manufactured during the month. n. Made sales on account in August, P132,000. The cost of goods sold was P112,000. Note: For uniformity, record non-manufacturing expenses to Selling, General & Administrative Expense (SG&A) account. REQUIRED: 1. Prepare journal entries to record the August events. 2. Prepare a T-Account for the journal entries.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Asakapa Corporation manufactures eighteenth-century, classical-style furniture. It uses a
a. Purchased 5,000 square feet of oak on account at P25 per square foot.
b. Purchased 50 gallons of glue on account at P36 per gallon (indirect material).
C. Requisitioned 3,500 square feet of oak and 30.5 gallons of glue for production.
d. Incurred payroll costs of P187,000. Of this amount, P46,000 were indirect labor costs; direct labor personnel earned P22 per hour on average.
e. Paid factory utility bill, P15,320 in cash.
f. August's insurance cost for the manufacturing property and equipment was P3,500. The premium had been paid in March.
g. Incurred P8,200
h. Recorded P2,400 depreciation on an administrative asset.
i. Paid advertising expense in cash, P5,500.
j. Incurred and paid other
k. Incurred miscellaneous selling and administrative expenses, P13,250.
l. Applied factory overhead to production on the basis of direct labor hours.
m. Completed goods costing P146,000 manufactured during the month.
n. Made sales on account in August, P132,000. The cost of goods sold was P112,000.
Note: For uniformity, record non-manufacturing expenses to Selling, General & Administrative Expense (SG&A) account.
REQUIRED:
1. Prepare
2. Prepare a T-Account for the journal entries.
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