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Problem 2. The Best Manufacturing Company uses standard costs with its job order cost accounting system. During the third quarter of 2013, an order of 4,000 units of Product Echo (Job. 3-3003) was accepted from a longtime customer. The standard cost to produce a unit is given below: Direct materials - 3.0 lbs at P8.00 per pound Direct labor – 2 hours at P18 per hour Overhead – 2 hours (variable P6; Fixed P10) Overhead is applied to production on the basis of direct labor hours. Normal capacity for the quarter was 9,000 direct labor hours. During the quarter, the following transactions related to the job occurred: a. Purchased 12,400 pounds of raw materials on account at P7.20 per pound b. Issued 12,400 pounds of raw materials to production c. Incurred 7,600 hours of direct labor at P18.40 per hour d. Manufacturing overhead incurred for the quarter totaled P135,300. e. Applied overhead to production. f. Transferred completed jobs to Finished Goods. g. Billed the customer at cost plus 60% mark-up on cost. REQUIRED: Journal entries to record the above.

Problem 2. The Best Manufacturing Company uses standard costs with its job order cost accounting system. During the third quarter of 2013, an order of 4,000 units of Product Echo (Job. 3-3003) was accepted from a longtime customer. The standard cost to produce a unit is given below: Direct materials - 3.0 lbs at P8.00 per pound Direct labor – 2 hours at P18 per hour Overhead – 2 hours (variable P6; Fixed P10) Overhead is applied to production on the basis of direct labor hours. Normal capacity for the quarter was 9,000 direct labor hours. During the quarter, the following transactions related to the job occurred: a. Purchased 12,400 pounds of raw materials on account at P7.20 per pound b. Issued 12,400 pounds of raw materials to production c. Incurred 7,600 hours of direct labor at P18.40 per hour d. Manufacturing overhead incurred for the quarter totaled P135,300. e. Applied overhead to production. f. Transferred completed jobs to Finished Goods. g. Billed the customer at cost plus 60% mark-up on cost. REQUIRED: Journal entries to record the above.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 2. The Best Manufacturing Company uses standard costs with its job order cost accounting system. During the third quarter of 2013, an order of 4,000 units of Product Echo (Job. 3-3003) was accepted from a longtime customer. The standard cost to produce a unit is given below: Direct materials – 3.0 lbs at P8.00 per pound Direct labor – 2 hours at P18 per hour Overhead – 2 hours (variable P6; Fixed P10) Overhead is applied to production on the basis of direct labor hours. Normal capacity for the quarter was 9,000 direct labor hours. During the quarter, the following transactions related to the job occurred: a. Purchased 12,400 pounds of raw materials on account at P7.20 per pound b. Issued 12,400 pounds of raw materials to production c. Incurred 7,600 hours of direct labor at P18.40 per hour d. Manufacturing overhead incurred for the quarter totaled P135,300. e. Applied overhead to production. f. Transferred completed jobs to Finished Goods. g. Billed the customer at cost plus 60% mark-up on cost. REQUIRED: Journal entries to record the above.
Transcribed Image Text:Problem 2. The Best Manufacturing Company uses standard costs with its job order cost accounting system. During the third quarter of 2013, an order of 4,000 units of Product Echo (Job. 3-3003) was accepted from a longtime customer. The standard cost to produce a unit is given below: Direct materials – 3.0 lbs at P8.00 per pound Direct labor – 2 hours at P18 per hour Overhead – 2 hours (variable P6; Fixed P10) Overhead is applied to production on the basis of direct labor hours. Normal capacity for the quarter was 9,000 direct labor hours. During the quarter, the following transactions related to the job occurred: a. Purchased 12,400 pounds of raw materials on account at P7.20 per pound b. Issued 12,400 pounds of raw materials to production c. Incurred 7,600 hours of direct labor at P18.40 per hour d. Manufacturing overhead incurred for the quarter totaled P135,300. e. Applied overhead to production. f. Transferred completed jobs to Finished Goods. g. Billed the customer at cost plus 60% mark-up on cost. REQUIRED: Journal entries to record the above.
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