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Hans Jensen, general manager of a Mr. Clean and Company, has provided the following information for transaction that occurred during August. The production plant uses the JIT costing system.
Raw materials were purchased at the cost of P97,000.
Direct labor costs of P77,000 were incurred.
Actual overhead costs amounted to P225,000.
Applied conversion costs totaled to P300,000. This includes direct labor costs.
All units are completed and immediately sold.
Problem 1: Determined the August 31 balance of Cost of Goods Sold account, no adjustment has been made for over-applied or under-applied conversion cost.
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