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The Hyman Company manufactures special purpose machines to order. On January 1, there were two jobs in process, #705 and #706. The following costs were
The Hyman Company manufactures special purpose machines to order. On January 1, there were two jobs in process, #705 and #706. The following costs were applied to these jobs in the prior year:
Job No. | ||
705 | 706 | |
Direct material | P 5,000 | P 8,000 |
Direct labor | 4,000 | 3,000 |
Overhead | 4,400 | 3,300 |
Total | P13,400 | P14,300 |
During January, the following transactions took place:
* | Raw material costing P40,000 was purchased on account. |
* | Jobs #707, #708, and #709 were started and the following costs were applied to them: |
JOB | |||
707 | 708 | 709 | |
Direct materials | P3,000 | P10,000 | P7,000 |
Direct labor | 5,000 | 6,000 | 4,000 |
* | Job #705 and Job #706 were completed after incurring additional direct labor costs of P2,000 and P4,000, respectively |
* | Wages paid to production employees during January totaled P25,000. |
* | Depreciation for the month of January totaled P10,000. |
* | Utilities bills in the amount of P10,000 were paid for operations during December. |
* | Utilities bills totaling P12,000 were received for January operations. |
* | Supplies costing P2,000 were used. |
* | Miscellaneous overhead expenses totaled P24,000 for January. |
Actual overhead is applied to individual jobs at the end of each month using a rate based on actual direct labor costs.
Required:
a. | Determine the January overhead rate. |
b. | Determine the cost of each job. |
c. | Compute cost of goods manufactured. |
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