Question
The KCP Metal Company received two orders from customers on December 17, 2020: Assigned Job Order No. 11 Landok Auto Parts placed an order for
The KCP Metal Company received two orders from customers on December 17, 2020:
Assigned
Job Order No.
11 Landok Auto Parts placed an order for 10,000 aluminum rods, inch diameter, 12 inches long. The price
agreed upon for the job is P70,000. Landok auto parts requested a completion date of December 21, 2020.
12 The Marlboro Lamp Company placed an order for 3,000 aluminum switch plates of standard size. The price
for this job is 30,000 and the requested completion date is December 25, 2020.
Both jobs will be shaped in the forming department and cleaned in the finishing department. The KCP Metal
Company uses a job order cost system. The following transactions relate to jobs 11 and 12:
1. On December 17, 2011, the purchasing department bought: 50,000 lb of aluminum for P375,000; unit cost is
P7.5/lb, 500 gallons of cleaning fluid for P25,000; unit cost P50/gal.
2. The following materials were requisitioned:
Date Quantity Description Amount
Forming Department
Job 11 12/17 2,500 lb Aluminum P18,750
Job 12 12/17 300 lb Aluminum 2,250
Total P21,000
Finishing Department
12/24 10 gal Cleaning Fluid P 500
3. Labor costs incurred according to labor job tickets and payroll summary were as follows:
Forming Finishing Total
Week of 12/17/2020:
Direct Labor - job 11 P15,500 P 3,500 P19,000
Direct Labor - job 12 7,500 1,500 9,000
Indirect Labor - Forming Department 5,500 5,500
Week of 12/24/2020:
Direct Labor - job 12 2,000 2,000
Indirect Labor - Finishing Department 750 750
Total P28,500 P7,750 P36,250
4. Additional factory overhead costs incurred by the forming department:
Insurance Expense P12,000
Depreciation Expense 1,500
Payroll Taxes 2,000
Total P15,500
5. Factory is applied to each job upon completion as follows:
Forming Department: 100% of direct labor pesos.
Finishing Department: 50% of direct labor pesos.
6. Job 11 was completed on December 21, and job 12 was completed on December 25. Both jobs were transferred
to the finished goods storeroom upon completion.
7. Both jobs were picked up on December 25 by the customers, who paid cash.
Required: Prepare journal entries for the above transactions.
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