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Costacc HW

A company uses job order costing with a predetermined overhead rate of P9.8 per machine hour. For Job 888, the total manufacturing cost was P72,485 with 1,500 units produced and a unit cost of P48.32. If 30 units were reworked for P25 each, the rework cost would be included in the total manufacturing costs of Job 888. If instead 30 units were spoiled and sold for P240, while 30 new units cost P1,390 to make, the total cost of Job 888 would be P73,635.

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Rikka Takanashi
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168 views2 pages

Costacc HW

A company uses job order costing with a predetermined overhead rate of P9.8 per machine hour. For Job 888, the total manufacturing cost was P72,485 with 1,500 units produced and a unit cost of P48.32. If 30 units were reworked for P25 each, the rework cost would be included in the total manufacturing costs of Job 888. If instead 30 units were spoiled and sold for P240, while 30 new units cost P1,390 to make, the total cost of Job 888 would be P73,635.

Uploaded by

Rikka Takanashi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

A Company uses a job order costing system that combines actual direct material and actual
direct labor costs with a predetermined overhead charge based on machine hours. Expected
overhead and machine hours of P1,421,000 and 145,000, respectively, were used in developing
the predetermined rate for 2019. During 2019, the company worked on Job#888 and incurred
the following costs and machine hours:
Direct Material P47,500
Direct Labot 21,800
Machine Hours 325
a. What is the total cost of Job 888? What is the unit cost of P1,500 units that were produced?
(Round to the nearest centavo.)
b. In completing job 888, 30 units were defective and had to be reworked at a cost of P25
each. Assume that spoilage and rework costs were included In the original estimated
overhead costs. Where does the cost of the rework cost appear in the accounts of A
Company?

JOB 888
Predetermined Overhead Rate (1421/145 ) 9.8
Direct Material 47,500
Direct Labor 21,800
Machine Hours(325 x 9.8) 3185
Manufacturing Costs 72,485
Units 1500
Unit Cost 48.32333

c. Disregard the facts in (b). Upon completing Job 888, the quality control inspector
determined that 30 units were spoiled and would be unacceptable to the customer. Thirty
additional good units were made at a total cost of P1,390. The spoiled units were sold for
P240 as “seconds” to a store. What is the total cost of Job 888?

Total Manufacturing Costs 72,485


Additional good units 1,390
Less spoiled units -240
TOTAL COST of JOB 888 73,635

3.

a. Manufacturing Overhead 1,150

Materials 250

Labor 900

b. Work in Process 1,150


Materials 250

Labor 900

c. Loss from abnormal work 1,150

Materials 250

Labor 900

4.

a.

Estimated Overhead cost 600,000


Estimated Spoilage Cost 50,000
Estimated sales value of spoiled materials -20,000
Total 630,000
Divide estimated direct labor hours 40,000
Pretermined Overhead Rate 15.75

b.

Spoiled Goods Inventory 496

Factory Overhead 1,234

Work In Process 1,730

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