ACTIVITY 4
JOB ORDER COSTING
Problem 1
The following are transactions of Robina Corporation for the month of February 2020. Provide the corresponding journal entries for
each transaction:
1. Purchase of materials (direct and indirect), on credit, P1,000,000
2. Usage of raw materials, P750,000 (20% are indirect materials)
3. Manufacturing payroll for the month: Gross amount of 390,000 Direct labor, P90,000 of which for SSS and other
government payable, and gross amount of indirect labor, P170,000, P45,000 of which for SSS and government payable. Net
salary paid in cash.
4. Other manufacturing overhead costs incurred during the month, P175,000, consisting of janitorial salaries, P80,000 paid in
cash for plant utilities, repairs, and supervisory salaries, P130,000 and plant depreciation, P40,000
5. Allocation of manufacturing overhead to jobs using predetermined OH rate of P12/machine hour. Actual machine hour for
the month is 50,000 hours.
6. Completion and transfer of individual jobs to finished goods, P1, 555,000
7. Cost of goods sold, P880,000
8. Marketing costs for February, P45,000 and customer service costs for February P15,000, paid in cash
9. Sales, all on credit, P2,270,000
The following are also provided:
Tax rate – 30%
Interest expenses – P20,000
Administrative expenses – P540,000
Beginning Inventories: Raw materials, P610,000; Work in process, P1,065,000, Finished Goods, P2,100,000.
Units manufactured for the period – 100,000 units
Compute/provide for the following:
1) Provide journal entries per transaction (please use compound entries)
2) Cost of Goods Sold
3) Total Manufacturing Cost
4) Cost per unit under normal costing
5) Cost per unit under actual costing
6) Cost of Goods Manufactured
7) Operating income
8) Ending Finished Goods Inventory
9) Ending Raw Materials Inventory
10) Net Income
Problem 2
The following data is available for Justin Corporation for the year ending December 31, 2020:
January 1 December 31
Inventories
Materials P120,000 P180,000
Work in process P190,000 P158,000
Finished Goods P102,000 P130,000
Direct labor cost P300,000
Materials Purchased P380,000
Factory Overhead applied at 150% of Direct labor cost
1. Direct materials used
2. Total manufacturing cost
3. Cost of goods manufactured
4. Cost of goods sold
Problem 3
At the end of 2019, Alonzo Company’s manufacturing inventory and expense accounts held the following costs.
Work in Process Inventory Finished Goods Inventory Cost of Goods Sold
Direct Materials P120,000 P190,000 P350,000
Direct Labor P100,000 P250,000 P580,000
Factory Overhead P60,000 P300,000 P480,000
Alonzo’s accountant applied overhead during the year using a budgeted rate of P8.40 per hour. At year end, they computed the
actual rate of P10.00 per machine hour. The beginning balances of both work in process inventory and finished goods inventory
were zero.
5. How many machine hours worked during 2019?
6. Was a factory overhead over or under applied for year? By how much?
7. Prorate the over or under applied overhead to the appropriate accounts.
Problem 4
Assume the following information related to the Alexis Company for the month of November 2019:
Job No. 123 Job No. 124 Job No. 125 Job No. 126 Job No. 127
In process, Nov. 1
Materials P20,000 P30,000 P90,000 0 0
Labor P70,000 P40,000 P100,000 0 0
Overhead P84,000 P48,000 P120,000 0 0
Cost added in
November
Materials P70,000 P40,000 P60,000 P60,000 P60,000
Labor P80,000 P60,000 P100,000 P70,000 P70,000
Overhead ? ? ? ?
Actual overhead incurred in November amounted to P636,000. Job No. 123 and 124 were completed in November.
Job No. 124 remains unsold by the end of the month.
Overhead is applied using a predetermined overhead rate.
The overhead variance is allocated to Cost of Goods sold and the appropriate inventories.
Given the following information, compute the following:
8. The cost of the Nov. 1 Work in process inventory
9. The amount of overhead applied to production in November assuming no change in the overhead rate used
10. The cost of the goods completed and transferred to finished goods inventory
11. The cost of Goods sold
12. The cost of the finished goods inventory ending
13. The cost of the November 30 work in process inventory
