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.