Question

Problem 1 The Mayhem Company uses a job-order costing system. The following data relate to October, the first month of the company's fiscal year: Raw materials purchased on account, P210,000. Raw materials issued to production, P190,000 (P178,000 direct materials and P12,000 indirect materials). a. b. c. Direct labor cost incurred, P90,000; and indirect labor cost incurred, d. Depreciation recorded on factory equipment, P40,000. P110,000 e. Other manufacturing overhead costs incurred during October, P70,000 (credit Accounts Payable) The company applies manufacturing overhead cost to production on the basis of P8 per machine-hour. There were 30,000 machine-hours recorded for October. Production orders costing P520,000 according to their job cost sheets were completed during October and transferred to Finished Goods. f. g.

Answer 1

1)

a)	Raw material inventory	210000
	Accounts payable		210000
b)	WIP inventory	178000
	Manufacturing overhead	12000
	Raw material inventory		190000
c)	WIP inventory	90000
	Manufacturing overhead	10000
	Salaries and wages payable		100000
d)	Manufacturing overhead	40000
	Accumulated depreciation-Factory equipment		40000
e)	Manufacturing overhead	70000
	Accounts payable		70000
f)	WIP inventory (30000*8)	240000
	Manufacturing overhead		240000
g)	Finished goods inventory	520000
	WIP inventory		520000
h)	Accounts receivable (480000*125%)	600000
	Sales		600000
	Cost of goods sold	480000
	Finished goods inventory		480000

2)

WIP Inventory
Beg. Bal.	42000	520000	Trfd to finished goods
Raw materials	178000
Direct Labor	90000
Mfg. OH	240000
	550000	520000
End bal.	30000
Manufacturing Overhead
Raw materials	12000	240000	Mfg OH applied
Labor	10000
Other expenses	70000
Depreciation	40000
	132000	240000
		108000	End bal.