ACTIVITY 4

JOB ORDER COSTING

Problem 1
The following are transactions of Robina Corporation for the month of February 2020. Provide the corresponding journal entries for
each transaction:

1. Purchase of materials (direct and indirect), on credit, P1,000,000

DEBIT CREDIT
Raw Materials 1,000,000
Accounts Payable 1,000,000

2. Usage of raw materials, P750,000 (20% are indirect materials)

DEBIT CREDIT
Work in Progress 600,000
Factory Overhead Control 150,000
Raw Materials 750,000

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3. Manufacturing payroll for the month: Gross amount of 390,000 Direct labor, P90,000 of which for SSS and other

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government payable, and gross amount of indirect labor, P170,000, P45,000 of which for SSS and government payable. Net

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salary paid in cash.
DEBIT CREDIT

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Payroll Expense
Cash rs e
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Government Payable

Work in Progress
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Factory Overhead Control

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Payroll Expense
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4. Other manufacturing overhead costs incurred during the month, P175,000, consisting of janitorial salaries, P80,000 paid in
cash for plant utilities, repairs, and supervisory salaries, P130,000 and plant depreciation, P40,000
DEBIT CREDIT
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Factory Overhead Control 425,000

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Account Salaries Payable 425,000

5. Allocation of manufacturing overhead to jobs using predetermined OH rate of P12/machine hour. Actual machine hour for
the month is 50,000 hours.
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DEBIT CREDIT
Work in Progress 600,000
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Factory Overhead Control 6000,000

6. Completion and transfer of individual jobs to finished goods, P1, 555,000

DEBIT CREDIT
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Finished Goods 1,555,000

Work in Progress 1,555,000

7. Cost of goods sold, P880,000

DEBIT CREDIT
Cost of Goods Sold 180,000
Finished Goods 180,000

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8. Marketing costs for February, P45,000 and customer service costs for February P15,000, paid in cash
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 DEBIT CREDIT
Marketing Expense 45,000
Customer Service Expense 15,000
Cash 60,000

9. Sales, all on credit, P2,270,000

DEBIT CREDIT
Accounts Receivable 2,270,000
Sales 2,270,000

The following are also provided:

Tax rate – 30%
Interest expenses – P20,000
Administrative expenses – P540,000
Beginning Inventories: Raw materials, P610,000; Work in process, P1,065,000, Finished Goods, P2,100,000.
Units manufactured for the period – 100,000 units

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Compute/provide for the following:

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1) Provide journal entries per transaction (please use compound entries)

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2) Cost of Goods Sold

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Raw materials 610,000
Factory overhead cost 560,000

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Work in process 1,065,000
Finished Goods rs e
2,100,000
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COGS 4,335,000
3) Total Manufacturing Cost
Raw materials 610,000
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Factory overhead cost 560,000

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Total Manufacturing Cost 1,170,000

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4) Cost per unit under normal costing

Total Manufacturing Cost 1,170,000
Units manufactured 100,000
Cost per unit – normal costing 11.7
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5) Cost per unit under actual costing

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Total Manufacturing Cost 1,170,000

Units manufactured 100,000
Cost per unit – normal costing 11.7
6) Cost of Goods Manufactured
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Raw materials 610,000

Factory overhead cost 560,000
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Work in process 1,065,000

Cost of Goods Manufactured 2,235,000
7) Operating income
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8) Ending Finished Goods Inventory

9) Ending Raw Materials Inventory
10) Net Income

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Problem 2
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 The following data is available for Justin Corporation for the year ending December 31, 2020:
January 1 December 31
Inventories
Materials P120,000 P180,000
Work in process P190,000 P158,000
Finished Goods P102,000 P130,000

Direct labor cost P300,000

Materials Purchased P380,000
Factory Overhead applied at 150% of Direct labor cost P450,000
1. Direct materials used
180,000 – 120,000 + 380,000 = 440,000
Direct Materials, Beg 180,000
Direct Materials, End (120,000)
Materials Purchased 380,000
Direct materials used 440,000

2. Total manufacturing cost

180,000 – 120,000 + 380,000 + 300,000

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Direct Materials, Beg 180,000

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Materials Purchased 380,000

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Direct Materials, End (120,000)

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Direct Labor cost 300,000
Total manufacturing cost740,000

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3. Cost of goods manufactured rs e
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4. 180,000 – 120,000 + 380,000 + 300,000 + 190,000 – 158,000
Direct Materials, Beg 180,000
Materials Purchased 380,000
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Direct Materials, End (120,000)

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Direct Labor cost 300,000

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Work in Progress, Beg 190,000

Work in Progress, End (158,000)
Cost of goods manufactured 772,000
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5. Cost of goods sold

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Direct Materials, Beg 180,000

Materials Purchased 380,000
Direct Materials, End (120,000)
Direct Labor cost 300,000
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Work in Progress, Beg 190,000

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Work in Progress, End (158,000)

Finished goods, Beg 102,000
Finished goods, End (130,000)
Cost of goods sold 744,000
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 Problem 3
At the end of 2019, Alonzo Company’s manufacturing inventory and expense accounts held the following costs.
Work in Process Inventory Finished Goods Inventory Cost of Goods Sold
Direct Materials P120,000 P190,000 P350,000
Direct Labor P100,000 P250,000 P580,000
Factory Overhead P60,000 P300,000 P480,000

Alonzo’s accountant applied overhead during the year using a budgeted rate of P8.40 per hour. At year end, they computed the
actual rate of P10.00 per machine hour. The beginning balances of both work in process inventory and finished goods inventory
were zero.
6. How many machine hours worked during 2019?
7. Was a factory overhead over or under applied for year? By how much?
8. Prorate the over or under applied overhead to the appropriate accounts.

Problem 4
Assume the following information related to the Alexis Company for the month of November 2019:

Job No. 123 Job No. 124 Job No. 125 Job No. 126 Job No. 127
In process, Nov. 1
Materials P20,000 P30,000 P90,000 0 0

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Labor P70,000 P40,000 P100,000 0 0
Overhead P84,000 P48,000 P120,000 0 0

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Cost added in

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November

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Materials P70,000 P40,000 P60,000 P60,000 P60,000
Labor
Overhead
P80,000
? rs e P60,000
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P100,000
?
P70,000
?
P70,000
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Actual overhead incurred in November amounted to P636,000. Job No. 123 and 124 were completed in November.
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Job No. 124 remains unsold by the end of the month.

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Overhead is applied using a predetermined overhead rate.

The overhead variance is allocated to Cost of Goods sold and the appropriate inventories.
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Given the following information, compute the following:

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9. The cost of the Nov. 1 Work in process inventory

10. The amount of overhead applied to production in November assuming no change in the overhead rate used
11. The cost of the goods completed and transferred to finished goods inventory
12. The cost of Goods sold
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13. The cost of the finished goods inventory ending

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14. The cost of the November 30 work in process inventory

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