Question # 2
USE different costing method:
Ahsan Corporation produce special products to customer specifications and uses job order cost system. The following data relates to its operation for the month of December, 1996.
1) Purchase raw material on Account $ 42000
2) Material issued to factory $ 33000 of which $3000 was used indirectly
3) Labor used: Direct $ 50000 Indirect $ 5000
4) Factory overhead cost incurred $ 40000
5) Factory overhead is applied at 100% of direct labor cost
6) Jobs were completed to the extent of 90%
7) Goods sold on Account $ 170000
8) Finished goods inventory valued at $ 10000
Record the above transaction in general journal entries and ledger account.
The information below is taken from the financial statements of Usama Company at the end of year 1996.
1) Good s in process inventory December 31, 1996 $ 30000
2) Cost of raw material used 156000
3) Cost of goods manufactured 372000
4) Factory overhead(75% of Direct Labor Cost ) 90000
Required: Compute the cost of goods in process inventory at January 1, 1996
b) Calculation of COGS in process Inventory at Jan, 1996
Costs of goods manufactured 372,000
Goods in process ending 30,000
Total goods in process 402,000
Manufacturing cost for the period
DL (90,000x.75) 120,000