ABC Company manufactures custom-built conveyor systems for factory and commercial operations.

The cost accountant for ABC Company is in the process of educating

a new employee, Mark Garcia, about the job-order costing system that ABC Company uses. The cost accountant of the company told Mark that the direct labor cost per
hour is P20 and the overhead is applied based on direct labor cost.
To explain the missing job number, the cost accountant informed Mark that Job #668 had been completed and sold in June.
At the end of July, Job #671 and #673 had not been completed; and all other jobs were complete.
The company sold Job # 667 and # 669.
Following job-order cost records are available for July:
Beginning Work-in-process Inventory
Job No. Direct Materials Direct Labor Applied OH Total Cost
667 5,540.00 2,100.00 1,260.00 8,900.00
669 18,000.00 8,000.00 4,800.00 30,800.00
670 9,450.00 4,000.00 2,400.00 15,850.00
Manufacturing cost/hrs incurred during the period
Job No. Direct Materials Direct Labor hours
667 - 20
669 2,000.00 45
670 6,000.00 60
671 20,000.00 380
672 5,250.00 90
673 7,450.00 180
674 12,000.00 295
The cost accountant asked Mark several questions to determine whether he understood the job-order costing system.
A. Answer the following:
1. What is the predetermined overhead rate?
2. What is the total prime cost?
3. What is the total cost of goods manufactured?
4. What is the total ending finished goods inventory?
5. Assuming the actual overhead is P12,000, what is the over/under-applied overhead?
B. Prepare the following:
1. T-account for work-in-process inventory (general ledger), finished goods inventory and all the subsidiary ledger.
2. Prepare the adjusting entry to close the overhead control account assuming the over/under applied overhead:
2.1 immaterial
2.2 material
JOB-ORDER COSTING MATERIALS