All costs incidental to materials procurement and handling until they are issued are charged to the materials
Question:
All costs incidental to materials procurement and handling until they are issued are charged to the materials account by Cruz Mfg. Co. at a rate predetermined for each of the departments involved.
For 19C, the estimated departmental costs are given:
Purchasing department P175,000
Receiving and Inspection Dept. 124,500
Materials department 83,000
Accounting department (20% is 295,000
estimated to be relatedto
processing of paymentsfor materials.
Purchases for 19C were estimated to amount to P5, 000,000 for more or less 8,300,000 units to be ordered 50 times.
Actual purchases for 19C amounted to P5, 600,000 for total of 8,000,000 units in 52 orders. Costs incurred by the four given departments were as follows:
Purchasing department P180,000
Receiving and inspection department 128,000
Materials department 78,000
Accounting department 20% is estimated to be related 290,000
processing of payments for materials.
Required: All entries related to the materials purchased in 19C with supporting computations. (Use one applied account).
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins