Hagerty, Inc. a manufacturer of computer diskettes, currently uses a conventional process cost system. During February, Hagerty plans to purchase P 50,000 of raw materials. Of this amount 80% will be used for current production, while the remainder will serve as a buffer in inventory. Direct labor cost is expected to be P 10,000 During February, and the actual factory overhead is anticipated to total P 65,000. Paul William, the owner, has been considering the use of a JIT inventory system. If implemented at the beginning of February, only the materials needed for current production would be purchased. Requirements: Using T-accounts, enter the February transactions for the purchase and usage of materials under: a) Conventional Costing b) JIT Costing Using T-accounts, enter the February transactions for the labor and overhead costs under: a) Conventional Costing b) JIT Costing Do not record the entry for applied overhead.
Hagerty, Inc. a manufacturer of computer diskettes, currently uses a conventional
system. During February, Hagerty plans to purchase P 50,000 of raw materials. Of this amount
80% will be used for current production, while the remainder will serve as a buffer in inventory.
Direct labor cost is expected to be P 10,000 During February, and the actual factory
anticipated to total P 65,000.
Paul William, the owner, has been considering the use of a JIT inventory system. If
implemented at the beginning of February, only the materials needed for current production
would be purchased.
Requirements:
Using T-accounts, enter the February transactions for the purchase and usage of materials
under:
- a)
Conventional Costing
- b)
JIT Costing
Using T-accounts, enter the February transactions for the labor and overhead costs under:
- a)
Conventional Costing
- b)
JIT Costing
Do not record the entry for applied overhead.
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