Problem 2-5A (Video) Phillips Corporation\'s fiscal year ends on November 30. Th

Question

Problem 2-5A (Video) Phillips Corporation's fiscal year ends on November 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year. Other data 1. On December 1, two jobs were in process: Job No. 154 and Job No. 155. These jobs had combined direct materials costs of $9,850 and direct labor costs of $16,500. Overhead was applied at a rate that was 75% of direct labor cost. During December, Job Nos 156, 157, and 158 were started. On December 31 Job No. 158 was unfinished This ob had charges ordirec materials labor $5,400, plus manufacturing overhead. All jobs, except for Job No. 158, were completed in December. 2. 20o and direct 3. On December 1, Job No. 153 was in the finished goods warehouse. It had a total cost of $5,100. On December 31, Job No. 157 was the only job finished that was not 4. Manufacturing overhead was $1,095 underapplied in December List the letters (a) through (m) and indicate the amount pertaining to each letter sold. It had a cost of $4,400.

Explanation / Answer

Req a: Requisitions of material 18950 Add: Ending Raw material 8475 27425 Less: Purchase of Rw material 18525 Beginning Balance of RM 8900 Req b: Beginning Balance of WIP: Direct Material 9850 Direct Labour 16500 Overheads (16500*75%) 12375 Beginning Balance of WIP: 38725 Req c: Requisition of Material 18950 Less: Indirect Material 3200 Direct Material consumed 16750 Req d: Overheads applied Direct labour cost incurred 8900 OH rate as % of DLC 75% of DLC Overheads applied on WIP 6675 Req e: Ending Inventory of WIP: Direct material 4200 Direct Labour 5400 Overheads applied (5400*75%) 4050 Ending Inventory of WIP: 13650 Req f: Cost of Jobs completed: beginning Balance 38725 Direct Material 16750 Direct Labour 8900 Overheads applied 6675 Total cost of Manufacturing 71050 Less: Ending inventory of WIP 13650 Cost of Job completed 57400 Req g: Beginning Balance of Job 153 5100 Req h: Cost of Jobs completed 57400 (computed in reg. f) Req j: ending balance of Job 157 4400 Req i: Beginning Balance of Job 153 5100 Add: Cost of Jobs completed 57400 Total cost of goods available for sale 62500 Less: ending inventory of FG 4400 Cost of goods sold 58100 Req k: Total Factory wages paid 12125 Less: Direct labour charged to WIP 8900 Indirect Wages charged to OH 3225 Total wages assigned 12125 Req l: Total Factory wages paid 12125 Less: Direct labour charged to WIP 8900 Indirect Wages charged to OH 3225 Req m: Overheads applied Direct labour cost incurred 8900 OH rate as % of DLC 75% of DLC Overheads applied on WIP 6675 RAW MATERIAL INVENTORY Beginning balance 8,900 Requisitions 18,950 Purchases 18,525 Ending Balance 8,475 Work in Process Inventory Balance 38,725 Jobs completed 57,400 Raw material Inv. 16,750 Wages Payable 8,900 Manufacturing Overheads 6,675 Balance 13,650 FINISHED GOODS INVENTORY Balance 5,100 Cost of Goods sold 58,100 Jobs completed 57,400 Balance 4,400 Factory Labour Factory Wages 12,125 Wages assigned 12,125 Ending balance 0 MANUFACTURING OVERHEADS Indirect Material 3,200 OH applied 6,675 Indirect Labour 3,225 Other Overheads 1,345 Ending balance 1,095

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