Reference no: EM132955180

Question - The Company received an order to make school uniforms and uses the job order cost system. The following transactions occurred during 2014 to Job U-101.

a. Purchased raw materials at a cost of P 2,000,000.

b. Direct materials used for P 1,400,000.

c. Raw materials were used as indirect materials, P 200,000.

d. Direct labor hours consumed for P 1,500,000 on the job, which was fully paid.

e. Indirect labor hours used costing P 500,000.

f. Other indirect costs accrued were P 1,250,000.

g. Manufacturing overhead equal to 100% of direct labor was charged.

h. The cost of U-101 of P 4,400,000 (direct materials of P 1,400,000 + direct labor costs of P 1,500,000 + applied overhead of P 1,500,000) was transferred to finished goods on completion.

i. Revenue is recorded at P 5,720,000 (P4,400,000 x 130%)

j. Actual manufacturing overheads were P 1,950,000 (indirect materials costing P 200,000 + indirect labor costing P 500,000 and other overheads of P 1,250,000). Applied manufacturing overhead were P 1,500,000. The manufacturing overheads worth P 450,000 were under-applied and are taken to the cost of goods sold or income statement.

Required - Journal entries to record the above transactions.