Operation Costinig. Jest-in-Time System and Backlush Costing 269 II. Exercises Exercise 1 (Operation Costing) The Packo Company, a small manufacturer, makes a variety of tool boxes. The company's manufacturing operations and their costs for November were Cutting Assembly Finishing Direct manufacturing labor P2.600 P16,500 Manufacturing overhead 3.000 22.900 P5.600 P39.400 Three styles of boxes were produced in November. The quantities and direct materials costs were Style Quantity Direct materials Standard 1,200 Home 600 Industrial 200 Total P4,800 P23,900 3.300 29,200 P8.100 P53.100 P18.000 6,600 5.400 P30.060 The company uses actual costing. It takes direct materials to each style of box. It combines direct manufacturing labor and manufacturing overhead and allocates the conversion costs on the basis of all product units passing through an operation. All product units are assumed to receive an identical amount of time and effort in each operation. The industrial style, however, does not go through the finishing operation. Required: 1. Tabulate the conversion costs of each operation, the total units produced, and the conversion costs per unit for November. 2. Calculate the total costs and the cost per unit of each style of box produced in November. Be sure to account for all the total costs. 3. Prepare summary journal entries for each operation. For simplicity, assume that all direct materials are introduced at the beginning of the cutting operation. Also, assume that all units were transferred to finished goods when completed and that there was no beginning or ending work in process. Prepare one summary entry for all conversion costs incurred, but prepare a separate entry for allocating conversion costs in each operation