Problem I Evergreen Company produces tools on a job order basis. me completed, and the following costs
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Problem I Evergreen
Company produces tools on a job order basis.
me completed, and the following costs were incurred: Job 401
Direct materials Direct fabor-
regular
overtime premium
267
During May, two jube
Job 402 37,000
P 28,000 P
18,000
23,000
6,000
Oner factory costs for the month totaled P 16,800. Factory overhead costs are allocated one-third to Job 401 and two-thirds to Job 402.
Required: a) Describe two alternative methods of recording the overtime premium and explain how the appropriate method affect the cost of each job.
b) Compute the cost of Job 401 and Job 402 under each of the two methods.
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