Problem 1

San Bartolome Company uses job order cost accumulation procedures. Manufacturing related-costs for February were:

Work in process, February 1 (Job 20) P109,000

Materials and supplies requisitioned for:

Job 20 P90,000

Job 21 75,000

Job 22 51,000

Supplies 4,000

Factory Direct labor hours:

Job 20 7,000

Job 21 6,000

Job 22 4,000

Labor costs:

Direct labor wages P204,000

Indirect labor 30,000

Supervisory salaries 87,000

Building occupancy costs 7,000

Factory equipment costs 12,000

Other Factory costs 10,000

Job 20 and 21 were completed during February. The predetermined overhead rate is P9 per direct labor hour.

REQUIRED:

1. Compute the total cost of Job 20.

2. Compute the manufacturing overhead costs applied to Job 22 during February. 3. Compute the total manufacturing overhead costs applied during February. 4. Compute the actual February manufacturing overhead incurred.

5. How should San Bartolome Company dispose of any under or overapplied factory overheadassuming that the amount is not significant in relation to total manufacturing overhead? 6. Will your answer change in Number 5, if the same under or overapplied is significant inamount?