Quiz 4

QUIZ 4 (PLEASE JUST CORRECT TO PREVIOUS QUIZ.
IT SHOULD NOT BE
QUIZ 4. THIS IS QUIZ 4)
ESSAY QUESTION: This will help you express your understanding of

the concept.
Instructions: Write your answer briefly in less than 100 words.
1. What are the fundamental characteristics of Job-Order Costing System?
PROBLEM SOLVING: This will help you develop your analytical

capabilities and judgment.
Instructions: Answer the following questions and provide the necessary

solutions.
Problem 1
On December 31, 2019, after closing the ledgers of Golden shower
company contains these accounts and balances:
Cash P94,000
Accounts receivable 100,000
Finished goods 65,000
Work in process 15,000
Materials 44,000
Machinery 70,600
Accounts Payable 118,750
Common Stock 200,000
Retained Earnings 69,850
Details of the three inventories are:

Finished goods inventory:
Item A – 2,000 units at P12.50 P25,000
Item B – 4,000 unis at P10.00 40,000
Total P65,000
Work in process inventory: Job 101 Job 102

Direct Materials
1,000 units at P5.00 P5,000
400 units at P3.00 P1,200
Direct labor
1,000 hours at P4.00 4,000
400 hours at P5.00 2,000
Factory overhead:
Applied at P2.00/hour 2,000 800
Total P11,000 P4,000
Materials inventory:
Material X – 4,000 units at P5.00 P20,000
Material Y – 8,000 units P3.00 24,000
Total P44,000
1
During January, 2020, these transactions were completed:
a. Purchases on account: Material X – 20,000 units at P5.20; Material Y –

24,000 units at P3.75; indirect materials – P35,040.
b. Payroll totaling P220,000 was paid. Of the total payroll, P40,000 was for
marketing and administrative salaries. Payroll deductions consisted of
P31,000 for withholding taxes, P7,000 for SSS premiums, P440 for
Medicare contributions, P6,600 for Pag-ibig Funds.
c. Payroll is to be distributed as follows: Job 101 – 10,000 direct labor hours

at P4.00, Job 102 – 16,000 direct labor hours at P5.00; Job 103 – 12,000
direct labor hours at P3.00; indirect labor – P24,000; marketing and
administrative salaries – P40,000. Employer’s payroll taxes are: SSS
premiums – 5%, Medicare contributions – 0.2%; and Pag-ibig funds – 2%.
d. Materials were issued on a FIFO basis as follows; Material X – 20,000

units (charged to Job 101); Material Y – 24,000 units (charged to Job 102);
Material X – 2,000 units and Materials Y – 5,000 units (charged to Job 103):
(Note: Transactions are to be taken in consecutive order). Indirect
materials amounted to P15,040.
e. Factory overhead was applied to Jobs 101, 102, and 103 based on a rate
of P2.25 per direct labor hour.
f. Jobs 101 and 102 were completed and sold on account for P240,000 and
P270,000, respectively.
g. After allowing a 5% cash discount, a net amount of P494,000 was

collected on accounts receivable.
h. Marketing and administrative expenses (other than salaries) paid during

the month amounted to P30,000. Miscellaneous factory overhead of
P21,600 was paid. Depreciation on machinery was P4,000.
i. Payments on account, other than payroll paid, amounted to P170,000.
j. The over or under-applied factory overhead is to be closed.
Required:
1. Journalize the January transactions.
2. Post January transactions to the general ledger, and subsidiary ledgers for
materials and work in process.
3. Prepare a Job order Cost Sheet.
4. Prepare a Statement of Cost of Goods Sold.
2
Problem 2
Beauty Company manufactures picture frames of all sizes and shapes
and uses a job order costing system. There is always some spoilage in each
production run. The following costs relate to the current run:
Estimated overhead (exclusive of spoilage) $160,000

Spoilage (estimated) $ 25,000
Sales value of spoiled frames $ 11,500
Labor hours 100,000
The actual cost of a spoiled picture frame is $7.00. During the year 170
frames are considered spoiled. Each spoiled frame can be sold for $4. The
spoilage is considered a part of all jobs.
a. Labor hours are used to determine the predetermined overhead rate.

What is the predetermined overhead rate per direct labor hour?
b. Prepare the journal entry needed to record the spoilage.
c. Prepare the journal entry if the spoilage relates only to Job #12 rather than
being a part of all production runs.

Quiz 4

Uploaded by

Copyright:

Available Formats

Quiz 4

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Quiz 4

Uploaded by

Copyright:

Available Formats

QUIZ 4 (PLEASE JUST CORRECT TO PREVIOUS QUIZ.

ESSAY QUESTION: This will help you express your understanding of

Instructions: Write your answer briefly in less than 100 words.

1. What are the fundamental characteristics of Job-Order Costing System?

PROBLEM SOLVING: This will help you develop your analytical

Instructions: Answer the following questions and provide the necessary

Details of the three inventories are:

Work in process inventory: Job 101 Job 102

a. Purchases on account: Material X – 20,000 units at P5.20; Material Y –

c. Payroll is to be distributed as follows: Job 101 – 10,000 direct labor hours

d. Materials were issued on a FIFO basis as follows; Material X – 20,000

g. After allowing a 5% cash discount, a net amount of P494,000 was

h. Marketing and administrative expenses (other than salaries) paid during

i. Payments on account, other than payroll paid, amounted to P170,000.

j. The over or under-applied factory overhead is to be closed.

Estimated overhead (exclusive of spoilage) $160,000

a. Labor hours are used to determine the predetermined overhead rate.

You might also like