Perry Company employs a job-order costing system. Only three jobs-Job #205, Job #206, and Job #207-were worked on during January and February. Job #205 was completed February 10; the other two jobs were still in production on February 28, the end of the company's operating year. Job cost sheets on the three jobs follow:

	Job Cost Sheet
	Job #205	Job #206	Job #207
January costs incurred:
Direct material	P16,500	P 9,300	P
Direct labor	13,000	7,000
Manufacturing overhead	20,800	11,200
February costs incurred:
Direct materials		8,200	21,300
Direct labor	4,000	6,000	10,000
Manufacturing overhead	?	?	?

The following additional information is available:

a.	Manufacturing overhead is assigned to jobs on the basis of direct labor cost.

b.	Balances in the inventory accounts at January 31 were as follows:

Raw Material	P40,000
Work in Process	?
Finished Goods	85,000

Required:

a.	Prepare journal entries forFebruaryas follows:

1.	Prepare an entry to record the issue of materials into production. (In the case of direct material, it is not necessary to make a separate entry for each job.) Indirect materials used during February totaled P4,000.
2.	Prepare an entry to record the incurrence of labor cost (In the case of direct labor, it is not necessary to make a separate entry for each job.) Indirect labor cost totaled P8,000 for February.
3.	Prepare an entry to record the incurrence of P19,000 in various actual manufacturing overhead costs for February (credit Accounts Payable).

 

b.	What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Using this rate, prepare a journal entry to record the application of overhead cost to jobs for February (it is not necessary to make a separate entry for each job).

c.	As stated earlier, Job #205 was completed during February. Prepare a journal entry to show the transfer of this job off of the production line and into the finished good warehouse.

d.	Determine the balance at February 28 in the Work in Process inventory account. How much of this balance consists of the cost of Job #206? Job #207?