Homework Help is Here – Start Your Trial Now!
Business
Accounting
Direct material Direct labor Overhead Total

Direct material Direct labor Overhead Total

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Sacred 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: Iob 405 P 5,000 4,000 4,400 P13.400 Job 406 P 8,000 Direct material Direct labor 3,000 3,300 Overhead Total P14,300 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: Job 407 P3,000 Job 408 P10,000 Job 409 P 7,000 Direct materials Direct labor 5,000 6,000 4,000 • 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: 1. How much is the total manufacturing costs for January? 2. Give the entry to record the closing of over-underapplied overhead for the period. 3. How much is the adjusted ending Work-in-Process Inventory? 4. How much is the Net income for January?
Transcribed Image Text:Sacred 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: Iob 405 P 5,000 4,000 4,400 P13.400 Job 406 P 8,000 Direct material Direct labor 3,000 3,300 Overhead Total P14,300 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: Job 407 P3,000 Job 408 P10,000 Job 409 P 7,000 Direct materials Direct labor 5,000 6,000 4,000 • 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: 1. How much is the total manufacturing costs for January? 2. Give the entry to record the closing of over-underapplied overhead for the period. 3. How much is the adjusted ending Work-in-Process Inventory? 4. How much is the Net income for January?
Expert Solution
steps

Step by step

Solved in 3 steps with 4 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost classification
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS