Reference no: EM132693462
As of September 1, 20C, there are two jobs in process with accumulated prime costs as follows:
Job 71: No. of units - 6,000,
Direct materials - P5,000,
Direct labor - P2,000.
Job 72:No. of units - 5,000,
Direct materials - P4,000,
Direct labor - P1,800.
Job 72 is special in nature because of its strict specifications. Factory overhead is charged at P.40 per unit and includes a P.03 provision for defective work.
The prime costs incurred in September are as follows:
Job 71: Direct materials - P3,000, Direct labor - 2,000;
Job 72: Direct materials - P5,000, Direct labor 3,000;
Job 75: No. of units - 3,000, Direct materials - P4,500, Direct labor - 2,000;
Job 76: No of units - 2,000, Direct materials - P2,500, Direct labor - 1,500.
Some units are found to have imperfections and the corresponding prime costs incurred in reprocessing are as follows: No. of units found with imperfections:
Job 71 - 50, Job 72 - 80, Job 75 - 40.
Prime costs in reprocessing:
Direct materials = Job 71 - P500, Job 72 - P1,500, Job 75 - P300;
Direct labor= Job 71 - 200, Job 72 - 800, Job 75 - 100. Jobs 71, 72 and 75 were completed.
Problem 1: The units cost in each completed job must be:
Option 1: Job 71- P2.49, Job 72 - P3.60, Job 75 - P2.57
Option 2: Job 71- P2.37, Job 72 - P3.13, Job 75 - P2.54
Option 3: Job 71- P2.40, Job 72 - P3.60, Job 75 - P2.57
Option 4: Answer not given.