WALANG ORAS PARA SAYO Inc. is a small New England company that manufactures customclocks. It uses normal costing system that applies factory overhead on the basis of direct labor-hours. Factory overhead for the past years were listed below along with the direct labor hoursspent:Factory OverheadDirect Labor Hours35,000549,750505,400529,800P36,00032,00036,50038,500592,725573,025Management assessed that 31,700 direct labor-hours is the normal capacity for the year. Beforethey started their April production, some P 10,000 of both wood fasteners and mahogany blankswere still unused but clocks worth 15,780 are ready to be finished. Since the products were ondemand last quarter, all finished clocks were sold before April. These transactions were recordedduring April:April insurance cost for the manufacturing property and equipment was P1,495. Thepremium had been paid in January.Recorded P1.025 depreciation on an administrative asset.• Purchased 21 pounds of high-grade wood fasteners on account at P15 per pound (indirectmaterial).Paid factory utility bill, P6.510 in cash.• Incurred and paid payroll costs of P80,300. Of this amount, P64,000 were for direct laborpersonnel who earned P20 per hour on average.• Incurred and paid other factory overhead costs, P5,770.• Purchased 2,100 unfinished mahogany blanks on account at P11 per blank.Requisitioned 1.495 mahogany blanks and 13 pounds of fasteners for production.• Incurred miscellaneous selling and administrative expenses, P5,660.• Incurred P3,505 depreciation on manufacturing equipment for April.• Paid advertising expenses in cash, P2,350.• Applied factory overhead to production on the basis of direct labor-hours.• Made sales on account in August, P96,450. Cost of goods sold for the period is 84,500.Work-in Process at the end of April, before any adjustments for over or under appliedoverhead was P56,355.REQUIRED:1. Compute for the predetermined overhead rate using high-low method.2. Journalize the entries for April.3. Compute for the over- or underapplied overhead and make the necessary adjustingjournal entry if management assessed that it is material.Make an income statement for the month of April for WALANG ORAS PARA SAYO Inc withnecessary schedules (CGM & COGS, if applicable).

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WALANG ORAS PARA SAYO Inc. is a small New England company that manufactures custom clocks. It uses normal costing system that applies factory overhead on the basis of direct labor- hours. Factory overhead for the past years were listed below along with the direct labor hours spent: Factory Overhead 549,750 505,400 529,800 592,725 573,025 Direct Labor Hours 35,000 36.000 32,000 36,500 38,500 P

WALANG ORAS PARA SAYO Inc. is a small New England company that manufactures custom clocks. It uses normal costing system that applies factory overhead on the basis of direct labor- hours. Factory overhead for the past years were listed below along with the direct labor hours spent: Factory Overhead 549,750 505,400 529,800 592,725 573,025 Direct Labor Hours 35,000 36.000 32,000 36,500 38,500 P

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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