James Company is engaged in selling customized calculators. The company uses a job order accounting system...

 

Transcribed Image Text:

James Company is engaged in selling customized calculators. The company uses a job order accounting system to its production costs and during the year the company worked on two jobs, Job A and Job B. At the beginning of the year, account balances were: Raw materials* P20,000 Work in process PO Finished goods 0 Accrued payroll 0 *Consist of 1,000 lbs of X @ P12 and 2,000 lbs of Y @ P4 Overhead is allocated to products at a rate of P12 per direct labor hour. During the year, the following transactions took place: a.) 750 pounds of raw material X were issued for the production of 1,000 units of customized calculators for Job A. b.) 375 direct labor hours at an average hourly rate of P15 were used to manufacture customized calculators on Job A. c.) 900 pounds of raw materials Y were issued for production of customized calculators for Job A. d.) 1,000 pounds of raw material Y were issued for the production of 2,000 units of customized calculators for Job B. e.) 300 direct labor hours at an average hourly rate of P15 were incurred in the manufacturing of customized calculators for Job B. f.) 2,000 pounds of raw material X were purchased at a cost of P12.50 per pound. g.) 1,000 pounds of raw material Y were purchased at a cost of P3.90 per pound. h.) 500 pounds of raw material X were issued for the production of 2,000 units of customized calculators for Job B. i.) 800 unit of Job A and 1,500 units of Job B were completed. The incomplete units of Job A had used 70 hours of direct labor; the incomplete unit of Job B had used 50 hours. j.) Actual overhead expenses totaled P8,500 k.) 80% of the finished goods (Job A and Job B) were sold on account at a gross profit rate of 50% based on cost. James Company used FIFO perpetual inventory accounting method. Required: 1. By how much should the work in process account be debited in transaction (a)? 2. By how much should the raw materials account be credited in transaction (h)? 3. How much is the cost of ending inventory of Material X? 4. How much is the cost of ending inventory of Material Y? 5. How much is the total materials issued to production? James Company is engaged in selling customized calculators. The company uses a job order accounting system to its production costs and during the year the company worked on two jobs, Job A and Job B. At the beginning of the year, account balances were: Raw materials* P20,000 Work in process PO Finished goods 0 Accrued payroll 0 *Consist of 1,000 lbs of X @ P12 and 2,000 lbs of Y @ P4 Overhead is allocated to products at a rate of P12 per direct labor hour. During the year, the following transactions took place: a.) 750 pounds of raw material X were issued for the production of 1,000 units of customized calculators for Job A. b.) 375 direct labor hours at an average hourly rate of P15 were used to manufacture customized calculators on Job A. c.) 900 pounds of raw materials Y were issued for production of customized calculators for Job A. d.) 1,000 pounds of raw material Y were issued for the production of 2,000 units of customized calculators for Job B. e.) 300 direct labor hours at an average hourly rate of P15 were incurred in the manufacturing of customized calculators for Job B. f.) 2,000 pounds of raw material X were purchased at a cost of P12.50 per pound. g.) 1,000 pounds of raw material Y were purchased at a cost of P3.90 per pound. h.) 500 pounds of raw material X were issued for the production of 2,000 units of customized calculators for Job B. i.) 800 unit of Job A and 1,500 units of Job B were completed. The incomplete units of Job A had used 70 hours of direct labor; the incomplete unit of Job B had used 50 hours. j.) Actual overhead expenses totaled P8,500 k.) 80% of the finished goods (Job A and Job B) were sold on account at a gross profit rate of 50% based on cost. James Company used FIFO perpetual inventory accounting method. Required: 1. By how much should the work in process account be debited in transaction (a)? 2. By how much should the raw materials account be credited in transaction (h)? 3. How much is the cost of ending inventory of Material X? 4. How much is the cost of ending inventory of Material Y? 5. How much is the total materials issued to production?

Answer rating: 100% (QA)

a 750 pounds of raw material X were issued for the production of 1000 units of customized calculators for Job A The cost of raw material X is given as P12 per pound Therefore the total cost of raw mat... View the full answer