Nicole Plastics company uses a job order costing system to account for its production costs. During the current period 1,000 chairs were molded and assembled on Job No. 453. The total cost incurred on the job is:

Materials P 24,000

Labor (500 hours @ P20/hr) 10,000

Factory overhead (P40 per labor hr) 20,000

Total P 54,000

Before being transferred to finished goods inventory, the chairs were inspected and 200 were found to be spoiled.  The spoiled chairs cannot be reworked but they can be sold for P20.00 each. The company maintain separate 

Spoiled goods inventory account for defective products and charges the unrecoverable cost of spoilage to factory overhead control.

 

Required:

1. JOURNAL ENTRIES and Determine the cost of Job 453 to be transferred to finished goods inventory.
2. Determine the amount to be transferred to Spoiled goods inventory account
3. Assume spoilage is due to customer's new design requirements, JOURNAL ENTRIES and determine the cost of Job 453 to be transferred to finished goods inventory.

Answer rating: 100% (QA)

Lets break down the required journal entries and calculations 1 Journal Entries for Job No 453 a To ... View the full answer