Chapter 1 Cost - Guerrero 384d5
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1
CHAPTER 1
Multiple Choice Questions- Theoretical 1. 2. 3. 4. 5.
a c a c d
6. b 7. c 8. d 9. a 10. b
11. d 12. a 13. b 14. d 15. a
16. a 17. b 18. d 19. b 20. a
21. 22. 23. 24. 25.
b c c d c
26. 27. 28. 29. 30.
c a c c d
Multiple Choice Questions - Computational 1.
(b) Direct Materials Direct Labor Factory Overhead: Depreciation – Factory equipment Factory rent Factory insurance Materials handling Manufacturing cost
2.
P1,000 2,000 500 1,500
5,000 P80,000
(a) Decrease in finished goods inventory Add: Raw materials purchased Direct labor payroll Factory overhead Total Less: Increase in raw materials inventory Cost of goods sold
3.
P47,000 28,000
P35,000 P430,000 200,000 300,000
930,000 P965,000 15,000 P950,000
(d) Direct labor- Wages of machine operations Direct materials: Metal wire Plastic coating
P200,000 P500,000 380,000
P880,000
1
2
4.
5.
6.
(c) Materials inventory, beginning Purchases Materials available for use Materials inventory, ending Materials used Direct labor Factory overhead Manufacturing cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured
P 32,400 40,000 72,400 34,000 38,400 33,000 17,160 88,560 7,200 95,760 16,240 P 79,520
(d) Materials inventory, Jan. 1 Purchases Freight in Materials available for use Materials inventory, Dec. 31 Materials used Direct labor Factory overhead Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold
P 17,000 240,000 3,000 260,000 19,000 241,000 320,000 188,000 749,000 12,000 761,000 13,000 748,000 62,000 810,000 46,000 P764,000
(b) Solve upward from Cost of Goods Sold. Materials inventory, Jan. 1 Purchases (squeeze) Materials available for use Materials inventory, Dec. 31 Materials used Direct labor Factory overhead Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold (given)
P 16,000 72,000 88,000 17,000 71,000 30,000 20,000 121,000 16,000 137,000 30,000 107,000 14,000 121,000 20,400 P100,600
(1)
(2)
2
3
7.
8.
9.
(c) Direct materials used Direct labor Factory overhead: Factory supplies Indirect labor Machine maintenance and repair Factory rent, light and power Depreciation Payroll taxes Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold (b) Raw materials inventory, beginning Purchases Materials available for use Raw materials inventory, ending Raw materials used Direct labor Factory overhead: Indirect labor Taxes, utilities and depreciation Factory cost Work in process inventory, beginning Total Work in process inventory, end Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, end Cost of goods sold (b) Direct materials used Direct labor Factory overhead Factory cost Work in process inventory, beginning Total Work in process inventory, end Cost of goods manufactured Finished goods inventory, beginning (squeeze) Goods available for sale Finished goods inventory, end Cost of goods sold
P100,000 250,000 P 6,000 50,000 10,000 24,000 10,000 30,000
130,000 480,000 30,000 510,000 40,000 470,000 50,000 520,000 60,000 P460,000
(1)
(2)
P 44,000 600,000 644,000 60,000 584,000 240,000 P120,000 100,000
220,000 1,044,000 80,000 1,124,000 96,000 1,028,000 50,000 1,078,000 36,000 P1,042,000 P 500,000 600,000 700,000 1,800,000 200,000 2,000,000 250,000 1,750,000 610,000 2,360,000 760,000 P1,600,000
3
4
10.
11.
(d) Direct materials, Dec. 31, 19x7 Purchases Available for use Direct materials, Dec. 31, 19x8 (squeeze) Direct materials used (P301,000- P180,000) Direct labor Factory overhead [(P180,000 / 60%) x 40% ] Factory cost Work in process, Dec 31, 19x7 Total Work in process, Dec. 31, 19x8 (squeeze) Cost of goods manufactured Finished goods, Dec. 31, 19x7 Goods available for sale Finished goods, Dec. 31, 19x8 (squeeze) Cost of goods sold (P500,000 x 80%)
P 16,000 170,000 186,000 65,000 121,000 180,000 120,000 421,000 34,000 455,000 25,000 430,000 30,000 460,000 60,000 P400,000
(1)
(2)
(3)
(a) Solve upward from Cost of Goods Sold Raw materials inventory, 19x7 Purchases (squeeze) Materials available for use Raw materials inventory, 19x8 Raw materials used Direct labor Factory overhead (squeeze) Manufacturing cost Work in process inventory, 19x7 Total Work in process inventory, 19x8 Cost of goods manufactured (Squeeze) Finished goods inventory , 19x7 Goods available for sale Finished goods inventory , 19x8 Cost of goods sold (given) Accrued factory payroll, 19x7 Direct labor Indirect labor Accrued factory payroll, 19x8 Payment of payroll
P 60,000 630,000 690,000 90,000 600,000 410,000 821,000 1,831,000 34,000 1,865,000 35,000 1,830,000 46,000 1,876,000 36,000 P1,840,000 P 6,200 410,000 140,000 ( 70,000 ) P549,200
(1)
(2)
(3)
4
5
12.
13.
(b) Solve upward from Cost of Goods Sold. Raw materials inventory, Jan. 1 Gross purchases (squeeze) Freight in Raw materials available for use Raw materials inventory, Dec. 31 Raw materials used Direct labor Factory overhead: Indirect labor P12,160 Factory overhead expenses 31,730 Indirect materials 21,390 Manufacturing cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured (16,000 units) Finished goods inventory, Jan. 1 (500 units x P12*) Goods available for sale Finished goods inventory, Dec. 31 (1,500 units x P12) Cost of goods sold (15,000 units x P12)
P 11,600 88,610 5,570 105,800 9,640 96,160 32,640
(1)
65,280 194,080 5,740 199,820 7,820 192,000 6,000 198,000 18,000 P180,000
* P192,000 / 16,000 units = P12 Sales Cost of goods sold Gross profit
P360,000 180,000 P180,000
(d) Materials inventory, beginning Purchases Materials available for use Materials inventory, ending Materials used Direct labor (P15,000 ÷ 2/3) Factory overhead Factory cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, ending Cost of goods sold Sales Cost of goods sold Gross profit Operating expenses ( P72,000 x 6%) Operating income Other expenses (P72,000 x 5%) Net income before income tax
P 8,000 36,000 44,000 8,500 35,500 22,500 15,000 73,000 8,000 81,000 15,000 66,000 7,000 73,000 10,200 P62,800 P 72,000 62,800 9,200 4,320 4,880 3,600 P 1,280
(2)
(1)
(2)
5
6
14.
15.
(a) Cost of goods sold Finished goods inventory, Dec 31 Goods available for sale
P111,000 17,500 P128,500
Sales Cost of goods sold Gross profit Operating expenses: Marketing expenses General and istrative expenses Operating income
P182,000 111,000 71,000 P14,000 22,900
(1)
36,900 P 34,100
(2)
Factory overhead: Indirect labor Factory heat, light and power Factory rent Factory insurance Production supervisor’s salary Indirect materials used (P5,600+P16,500- P5,180) Overtime pay [250 hours x (P22 x .5)] Total
P 22,000 11,220 18,500 2,000 5,000 16,920 2,750 P78,390
(1)
Direct materials inventory, March 1 Purchases Available for use Direct materials inventory, March 31 Direct materials used Direct labor (4,250 hours x P22) Factory overhead (1) Factory cost Work in process inventory, March 1 Total Work in process inventory, March 31 Cost of goods manufactured Finished goods inventory, March 1 Goods available for sale Finished goods inventory, March 31 (Squeeze) Cost of goods sold (given)
P 10,250 105,000 115,250 12,700 102,550 93,500 78,390 274,440 60,420 334,860 52,800 282,060 45,602 327,662 47,662 P280,000
(d)
(2)
6
7
16.
(d) Materials, inventory, beginning Purchases (Squeeze) Available for use Materials inventory, ending Raw materials used Direct labor [(P686,000-P326,000) ÷ 160 %] Factory overhead (P225,000 x 60%) Manufacturing cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured
17.
P 75,000 336,000 411,000 85,000 326,000 225,000 135,000 686,000 80,000 766,000 30,000 P 736,000
(2)
(3)
(c) Materials inventory, July 1 Purchases Freight in Available for use Materials inventory, July 31 Direct materials used Direct labor Factory overhead [P468,400+ (P116,000 x 90%)] Manufacturing cost Work in process inventory, July 1 Total Work in process inventory, July 31 Cost of goods manufactured Finished goods inventory, July 1 Goods available for sale Finished goods inventory, July 31 Cost of goods sold
18.
(1)
P 88,000 366,000 6,000 460,000 64,000 396,000 523,000 572,800 1,489,800 19,800 1,521,600 38,800 1,482,800 44,200 1,527,000 66,000 P1,461,000
(1)
(2)
(b) Direct materials: Materials inventory, Dec 1 Purchases Materials inventory, Dec 31 Direct labor Prime cost Direct labor Factory overhead [(P40,000 ÷ P6.40) x P8} Conversion cost
P24,000 56,000 ( 20,000 )
P 60,000 40,000 P100,000
(1)
P 40,000 50,000 P 90,000
(2)
7
8
19.
20.
(d) 1. Direct materials inventory, end (P100,000 – P70,000)
P30,000
2. Work in process control, end (P320,000 – P305,000)
P15,000
3.
P25,000
Finished goods control, end, (P325,000 – P300,000)
(a) Direct materials, Dec. 31, 2008 (Squeeze) Purchases Available for use Direct materials, Dec 19x9 Direct materials used (given) Direct labor (P72,000 ÷ 200%) Applied factory overhead Manufacturing cost Work in process inventory, Dec. 31, 2008 (Squeeze) Total Work in process inventory, Dec. 31, 19x9 Cost of goods manufactured Finished goods inventory, Dec. 31, 19x8 Goods available for sale Finished goods inventory, Dec. 31, 19x9 Cost of goods sold (given)
21.
P 30,000 90,000 120,000 20,000 100,000 36,000 72,000 208,000 3,000 211,000 35,000 176,000 50,000 226,000 46,000 P180,000
(1)
(2)
(a) Materials inventory, Jan. 1 P 34,200 Purchases (P364,000 + P8,600 – P5,200) 367,400 Available for use 401,600 Materials inventory, Dec. 31 49,300 Direct materials used 352,300 Direct labor 162,500 Factory overhead (P21,350 + P83,400 + P47,900) 152,650 Manufacturing cost 667,450 Work in process inventory, Jan 1 81,500 Total 748,950 Work in process inventory, Dec. 31 42,350 Cost of goods manufactured (4,000 units) 706,600 Finished goods inventory, Jan 1 (300 units) 48,600 Goods available for sale (4,300 units) 755,200 Finished goods inventory, Dec. 31 [420 units x (P706,600 ÷ 4,000 units)] 74,193 Cost of goods sold P281,007 (1) P74,193/420 units = P176.65 (2) Sales (3,880 units x P220) Cost of gods sold Gross profit
P853,600 281,007 P172,593
8
9
22.
(c) Materials used Direct labor Applied factory overhead (P290,000 x 30%) Factory cost Work in process inventory, April 1, 19x7 Total Work in process inventory, April 1, 19x8 Cost of goods manufactured
23.
P 440,000 290,000 87,000 817,000 41,200 858,200 42,500 P 815,700
Unit cost (P815,700 ÷ 18,000 nits)
P 45. 32
Applied factory overhead Actual factory overhead Indirect labor Light and power Depreciation Repairs Miscellaneous Under-applied factory overhead
P 87,000 P46,000 4,260 4,700 5,800 29,000
(1)
89,760 P (2,760)
(2)
P182,000 180,000 P 2,000
(1)
P710,000 512,600 197,400 100,900 P 96,500
(2)
(b) Applied factory overhead (P70,000 + P112,000) Actual factory overhead Over-applied factory overhead Sales: Product X (9,000 x P30) Product Y (8,800 x P50) Cost of goods sold (Sch. 1) Gross profit Operating expenses Operating income
P270,000 440,000
Sch. 1: Manufacturing cost (P210,000 + P296,000) Beginning inventories (P21,000 + P33,300) Total Ending inventories (P42,000 + P3,700) Cost of goods sold at normal Over-applied factory overhead Cost of goods sold at actual
P506,000 54,300 560,300 45,700 514,600 ( 2,000 ) P512,600
9
10
24.
25.
(d) Direct labor (8,000 hrs. x P5.60) + (4,600 hrs. x P6.00) Factory overhead (8,000 hrs. x P6.00) + (4,600 hrs x P8.00) Conversion cost
P 72,400 84,800 P157,200
(1)
Materials inventory, beginning Purchases Available for sale Materials inventory, ending Direct materials used Conversion cost Factory cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, ending Cost of goods sold
P 20,000 60,000 80,000 18,000 62,000 157,200 219,200 15,000 234,200 17,600 216,600 22,000 238,600 17,000 P221,600
(2)
(c) Materials inventory, April 1, 19x8 Purchases Available for use Materials inventory, June 30, 19x8 Direct materials used Direct labor Factory overhead Factory cost Finished goods inventory, April 1, 19x8 Goods available for sale Finished goods inventory, June 30, 19x8 (200 x P395) Cost of goods sold Unit cost of equipment manufactured (P4,937, 500 ÷ 12,500 units)
P 268,000 1,946,700 2,214,200 167,000 2,047,700 2,125,800 764,000 4,937,500 43,000 4,980,500 79,000 P4,901,500 P395.00
Sales Cost of goods sold Gross profit
P 6,634,000 4,901,500 P 1,732,500
Per unit (P1732,500 ÷ 12,400)
P139. 72
Gross profit Operating expenses Net income
P 1,732,500 977,000 P 755,500
Per unit (P755, 500 ÷ 12,400)
P 60.93
(1)
(2)
(3)
10
11
26
27.
28.
(d) Predetermined overhead rate (P96,000/P120,000)
80%
Applied factory overhead (P8,000 x 80%) Actual factory overhead Underapplied factory overhead
P6,400 7,200 P 800
(2)
(d) (1)
Indirect labor Rent – factory building Indirect materials used Other factory overhead costs Total
P 6,000 60,000 8,000 40,000 P114,000
(2)
Applied factory overhead costs (16,000 DL hours x P7)
P112,000
(3)
Direct Materials used Direct labor Applied factory overhead Cost of goods sold
P250,000 300,000 114,000 P664,000
(d) Cost of goods placed in process Finished goods Work in process – end (Job 30)
29.
(1)
P360,000 320,000 P 40,000
(d) (1)
Total manufacturing costs Direct labor (P225,000/72%) Applied factory overhead (P900,000 x 25%) Direct materials used
(2)
Mfg. cost + WIP,beg = WIP, end + COGM P900,000 + .80X = X + P850,000 .20X = P50,000 X = P250,000 WIP, end
P900,000 (312,500) (225,000) P362,500
0
11
12
30.
(c) Predetermined overhead rate (120,000/P160,000)
75%
Work in process, May 31 (P580,000 – P501,800) Less: Conversion cost Direct labor : Job 123 P12,000 Job 456 12,800 Applied factory overhead: Job 123 (P12,000 x 75%) P 9,000 Job 456 9,600 Direct materials
31.
P78,200
P24,800 18,600
43,400 P34,800
(a) Direct materials Direct labor Applied factory overhead Total
Dept. ADept. B Total P25,000 P 5,000P 30,000 20,000* 30,000 50,000 40,000 15,000** 55,000 P85,000 P50,000 P135,000
P40,000/200% ** P30,000 x 50% 32.
(b) Balance of Work in Process , 4/30/08 Direct labor Applied factory overhead (P2,000 x 80%) Direct materials
33.
P 8,800 (2,000) (1,600) P 5,200
(b) Pre-determined overhead rate (P11,800 / P14,750)
80%
Let X = Direct labor Therefore 80X = Applied factory overhead Finished goods Less: Direct materials used (P15,500 – P3,200) Prime cost
P37,500 12,300 P25,200
X + .80X = P25,200 180X = P25,200 X = P14,000 Direct labor .80X = P11,200 Applied factory overhead.
12
13
34.
(c)
(1)
(2)
(3) 35.
Manufacturing cost WIP, Dec. 1: Direct materials (3,000 x P2.40) Direct labor (3,000 x P.80) Applied FO (48 hrs x P100) Total WIP, Dec. 31: DM (2,000 x P2.40) DL (2,000 x P.80) Applied FO (32 hrs. x P100) Cost of goods manufactured Finished goods, Dec. 1 Goods available for sale Finished goods, Dec. 31: DM DL Applied FO (P100 x 60 hrs) Cost of goods sold
P180,000 P30,000 60,000
90,000 P 90,000 P180,000
P7,200 2,400 4,800 P4,800 1,600 3,200
P5,000 3,000 6,000
14,400 194,400 9,600 P184,800 12,000 196,800
14,000 P182,800
(d) (1)
(2) 36.
Manufacturing cost Less: Direct labor Applied factory overhead (P100 x 600 hours) Direct materials used
Direct materials used Direct labor Applied FO: Molding Dept. (P2.70 x 2,000 hours) Decorating Dept. (35% x P12,000) Estimated cost to produce
P26,000 30,000 P5,400 4,200
9,600 P65,600
Bid Price (P65,600 x 145% ) P95,120
(b) WIP, beg. Current cost: DM DL AFO Total cost (1)
Job 115 P81,200
Job 116
Job 117
26,000 31,200 P138,400
P39,000 45,000 54,000 P138,000
P53,000 47,000 56,400 P156,400
Cost of goods manufactured:
Job 115 Job 116 Job 117 Total
Job 118 P47,000 16,000 19,200 P82,200
Total P139,000 134,000 160,800 P515,000
P128,400 138,000 156,400 P432,800
13
14
37.
38.
(2) (c)
WIP, Aug. 31 (Job 118)
P 82,200
(1)
P1,280,000 / P1,600,000 = 80%
(2)
WIP, end Direct Labor Applied FO (.80 x P100,000) Direct materials
P280,000 (100,000) ( 80,000) P100,000
(1)
s payable, March 31 Payment of s payable (for materials) s payable, March 1 Materials purchased
P 20,000 70,000 (12,000) P 78,000
(2)
This can be computed by working backward from cost of goods sold as follows:
(a)
Costs of goods sold P 600,000 Finished goods inventory, March 31 120,000 Finished goods inventory, March 1 (100,000) Cost of goods manufactured 620,000 Work in process, March 31 (P12,000+P24,000+P48,000) 84,000 Work in process, March 1 (60,000) Manufacturing cost 644,000 Applied factory overhead (200% x P160,000) (320,000) Direct labor (160,000) Direct materials used 164,000 Materials inventory, March 31 30,000 Purchases (1) (78,000) Materials inventory, March 1 P 116,000 39.
(d) (1)
Applied factory overhead (200% x P160,000) = Actual factory overhead Overapplied factory overhead
P320,000 300,000 P 20,000
(1)
Direct materials Direct labor Prime cost
P26,000 20,000 P46,000
(2)
Direct labor Applied factory overhead (150% x P20,000) Conversion costs
P20,000 30,000 P50,000
(2) 40.
(b)
14
15
41.
(c) Work in process, May 1 : Job 769 Job 772 Current cost: Direct materials Direct labor Applied factory overhead (150% x P20,000) Total cost of goods placed in process Less: Work in process, May 31 (Job 779): Direct materials Direct labor Applied factory overhead (150% x P1,800) Cost of goods manufactured Finished goods inventory, May 31 (job 776) Cost of goods sold at normal
42.
P9,000 2,900 P26,000 20,000 30,000 P2,800 1,800 2,700
76,000 87,900
7,300 P80,600 4,000 P76,600
(d) Work in process, beginning Current costs: Direct materials Direct labor Applied factory overhead (P30 x 2,000 hours) Total Manufacturing cost Work in process, end
43.
(a) P30,000 x 500%
44.
(b)
P 40,000 P98,000 50,000 60,000
Applied manufacturing overhead (50% of direct labor) Direct labor (P30,101.80 x 2) Conversion cost (50% of manufacturing cost) Thus, the cost of materials used equals Manufacturing costs Decrease in work in process inventory Cost of goods manufactured 45.
P11,900
(a) Direct materials used Direct labor Applied factory overhead : Job X (P5,000 x 200%*) Job Y (P4,000 x 200%*) Job Z (P2,500 x 200%*) Total manufacturing cost charged to Work in Process * P300,000 / P150,000 = 200%
208,000 248,000 210,000 P 38,000
P30,101.80 60,203.60 90,305.40 90,305.40 180,610.80 590.00 P181,200.80 P45,000 (cr) 11,500 (cr) P10,000 8,000 5,000
23,000 (cr) P79,500 (dr)
15
16
46.
(d) Direct materials used: Materials inventory, June 1 Purchases Available for use Materials inventory, June 30 Direct labor (19,800 hours x 5) Applied factory overhead (19,800 hours x P2.50) Manufacturing cost Work in process, June 1 Total Work in process, June 30 Cost of goods manufactured
47.
P 10,000 50,000 60,000 25,000
P 5,000 20,000 15,000
P 35,000 100,000 75,000 210,000 50,000 260,000
40,000 (1) P220,000 (2)
(a) Applied manufacturing overhead Divided by predetermined overhead rate based on direct labor cost Direct labor cost
49.
P115,200 99,000 49,500 263,700 (1) 21,420 285,120 48,420 P263,700 (2)
(a) Direct materials used: Materials inventory, 11/1 Purchases Available for use Materials inventory, 11/30 Direct labor (25,000 hours x P4) Applied factory overhead (25,000 hours x P3) Factory cost Work in process inventory, 11/1 Total Work in process inventory, 11/30: Direct materials Direct labor (5,000 x P4) Applied factory overhead (5,000 x P3) Cost of goods manufactured
48.
P 97,200 120,000 217,200 102,000
P3,600,000 200% P1,800,000
(a) Manufacturing cost Direct labor Applied factory overhead Direct material used
P 8,000,000 (1,800,000) (3,600,000) P 2,600,000
16
17
50.
(a) Manufacturing cost Work in process inventory, 1/1 Cost of goods manufactured Work in process inventory, 12/31
51.
(b), credit to Materials .
52.
(b)
P8,000,000 320,000 (7,920,000) P 400,000
Direct labor hours (P360,000/P15) Factory overhead head per hour Applied manufacturing overhead 53.
(a), debit to Finished Goods
54.
(a) Work in process, January 1 Manufacturing cost: Direct materials used Direct labor Applied factory overhead Total Cost of goods manufactured (debit to finished goods) Work in process, December 31
55.
24,000 hrs. x P20 P480,000
P P380,000 360,000 480,000
P 940,000 10,000 950,000 50,000 P 900,000
(b) Actual manufacturing overhead Applied manufacturing overhead Under-applied overhead
57.
1,220,000 1,240,000 940,000 P 300,000
(b) Cost of goods manufactured Finished goods, January 1 Goods available for sale Finished goods, December 31 Cost of goods sold before adjustment for over/under applied overhead
56.
20,000
P 540,000 480,000 P 60,000
(a) Sales Cost of goods sold at actual (P900,000 + P60,000) Gross profit Manufacturing expenses Operating income (loss)
P1,090,000 960,000 130,000 140,000 P( 10,000)
17
18
58.
(c) Sales Cost of goods sold Gross profit Manufacturing overhead Operating income
P1,09`0,000 943,200 146,800 140,000 P 6,800
Prorating of under-applied overhead: Work in process Finished goods Cost of goods sold Total 59. 0
60.
Amount P 300,000 50,000 900,000 P1,250,000
Ratio 24% 4% 72% 100%
(c) Materials inventory, January 1 Purchases (debit to materials) Direct materials requisitioned (debit to work in process) Materials, January 31
P30,000 70,000 (40,000) P60,000
(d) Direct labor hours Rate per hour Direct labor cost
61.
(b), credit to accrued payroll.
62.
(a)
11,000 xP6 P66,000
Direct labor hours Indirect cost rate Applied factory overhead cost 63.
Pro-ration P14,400 2,400 43,200 P60,000
11,000 x P4 P44,000
(d) Work in process, January 1 Manufactory cost: Direct materials used Direct labor Applied factory overhead Total Cost of goods sold (credit to finished goods) Work in process, January 31
P 2,000 P40,000 66,000 44,000
150,000 152,000 80,000 P 72,000
18
19
64.
(c) Finished goods, January 1 Cost of goods manufactured (credit to work in process) Cost goods sold Finished goods, January 31
65.
(a)
66,
(d), credit to finished goods .
67.
(d) Applied factory overhead Actual factory overhead Under-applied overhead
68.
P 20,000 80,000 (60,000) P 40,000
P 44,000 48,000 P 4,000
(c)
19
20
PROBLEMS Problem 1-1 a. Materials s payable
13,500
b. Work in process-direct material Materials
17,500
13,500 17,500
c. Factory overhead control-Indirect materials Materials d. Payroll
1,800 1,800 27,000
Accrued payroll
27,000
Labor cost distribution: Work in process-direct labor Factory overhead control-indirect labor Selling expense control-salaries istrative expense control-salaries Payroll
17,000 2,000 5,000 3,000 27,000
e. Factory overhead control-various Cash
2,508
f.
8,500
2,508
Factory overhead control-various s payable
8,500
g. Work in process-Factory overhead Factory overhead control
14,808
h. Finished goods Work in process
60,100
i.
s receivable Sales
75,000
Cost of goods sold Finished goods Finished goods, Jan. 1 Cost of production Finished goods, Jan 31 Cost of good sold
60,000
14,808 60,100 75,000 60,000 P15,000 60,100 (15,100) P60,000
20
21
Problem 1-2 a. Materials s payable
100,000 100,000
b. Work in process-direct material Factory overhead control-indirect material Materials
49,000 9,000 58,000
c. Payroll
88,000 Withholding tax payable (10%) SSS Payable (5%) Pag-ibig Payable Medicare payable Accrued payroll (net)
8,800 4,400 880 1,320 72,600
Work in process -direct material Factory overhead control Selling expenses General istrative expenses Payroll
60,000 12,000 6,000 10,000 88,000
Accrued payroll Cash
7
2,600 72,600
d. Factory overhead control (P4,800 + P960) Selling expenses General istrative expenses SSS payable Medicare payable ECC payable Pag-ibig payable Direct labor P60,000 5% 1.5% 1.5% 1%
Indirect labor P12,000
P 3,000 P 600 900 300 600 P 4,800 P960
180 60 120
Sales P6,000
5,160 480 800 4,400 1,320 440 880 Office Salary P10,000
P 300P 500 90 30 60 P 480P 800
P 4,400 150 50 100 P 7,040
e. Factory overhead control Cash f.
Work in process Applied factory overhead
Total P88,000 1,320 440 880
15,000 15,000 30,000 30,000
21
22
Problem 1-2, continued. g. Finished goods Work in process
120,000 120,000
h. s receivable Sales
52,000 52,000
Cost of goods sold Finished goods
40,000 40,000 Problem 1-3
a. Materials s payable b. Work in process Factory overhead control Materials
64,000 64,000 37,000
c. Payroll
5,600 42,600 100,000
Withholding tax payable (14%) SSS Payable (5%) Medicare payable (. 5%) Pag-ibig payable (. 5%) Accrued payroll Accrued payroll Cash
14,000 5,000 500 500 80,000 80,000 80,000
d. Work in process (P100,000 x 55%) Factory overhead control (P100,000 x 18%) Selling expenses (P100,000 x 17%) General istrative expenses (P100,000 x 10%) Payroll
55,000 18,000 17,000 10,000
e. Factory overhead control Selling expenses General istrative expenses SSS payable Medicare payable ECC payable Pag-ibig payable
5,100 1,190 700
100,000
5,000 1,000 500 500
22
23
Problem 1-3, continued: Direct labor P55,000 5% 1% ½% ½% f.
Indirect labor P18,000
P 2,750P 900P 550 275 275 P 3,850 P1,260
Sales P17,000
istrative P10,000
850P 500P 5,000 180 170 90 85 90 85 P 1,190P 700 P7,000
Work in process Factory overhead control
100 50 50
1,000 500 500
44,000 44,000
g. Factory overhead control Accumulated depreciation Prepaid insurance s payable
21,700 18,000 1,200 2,500
h. Finished goods Work in process
103,000
i.
s receivable Sales
168,750
Cost of goods sold (P168,750 / 135%) Finished goods
125,000
Cash
145,000
j.
Total P100,000
103,000 168,750 125,000
s receivable
145,000 Problem 1-4
1. a. b. c.
d.
Materials s payable Work in process Materials
200,000 200,000 180,000 180,000
Factory Payroll Withholding tax payable SSS contribution payable Phil, health contribution payable Pag-ibig contribution payable Accrued payable
120,000
Factory overhead control SSS contribution payable Phil. Health contribution payable
8,800
6,000 3,200 1,300 2,000 107,500 5,500 1,300
23
24
Pag-ibig contribution payable
2,000
Problem 1-4, continued: e.
f. g. h. i.
j.
2.
(1) (2) (3)
Work in process Factory overhead control Factory payroll
80,000 40,000 120,000
Factory overhead control s payable Work in process Applied factory overhead
67,500 67,500 96,000 96,000
Finished goods Work in process
320,000
Cash/s receivable Sales
480,000
Cost of goods sold Finished goods
320,000
320,000 480,000 320,000
Applied factory overhead Cost of goods sold Factory overhead control
96,000 20,300 116,300
Work in process, October 1 Factory cost: Direct materials Direct labor Applied factory overhead Total Cost of goods manufactured Work in process, October 31
Work in process Materials Work in process Factory payroll Work in process Applied factory overhead 1,920 hours x P50
P 15,000 P180,000 80,000 96,000
356,000 371,000 320,000 P 51,000
Problem 1-5 135,000 135,000 120,000 120,000 96,000 96,000
24
25
Problem 1-5, continued: (4)
Finished goods Work in process Work in process, beginning Factory cost: Direct materials Direct labor Applied factory overhead Total
288,000 288m000 Job 66 P 40,000
Job 67 P 15,000
Total P 55,000
35,000 45,000 36,000 P156,000
45,000 40,000 32,000 P132,000
80,000 85,000 68,000 P288,000
Problem 1-6 (1)
a. b.
Materials s payable
229,040
Payroll
220,000
229,040
Payroll payable c.
d.
e. f.
220,000
Work in process Factory overhead control Selling and istrative expenses Payroll Direct labor: Job 101 (5,000 hours x P8) Job 102 (8,000 hours x P10) Job 103 (6,000 hours x P6) Total
156,000
Work in process Factory overhead control Materials
216,350
P 40,000 80,000 36,000 P156,000
231,390
Finished goods Work in process
s receivable
220,000
15,040
Work in process Applied factory overhead
Work in process, Jan.1 Manufacturing cost: Direct materials Direct labor Applied overhead Total
24,000 40,000
85,500 85,500 380,700 380,700
Job 101 P 11,000
Job 102 P 4,000
Total P 15,000
103,200 40,000 22,500 P176,700
84,000 80,000 36,000 P204,000
187,200 120,000 58,500 P380,700
520,000
25
26
Sales
520,000
Problem 1-6, continued: g.
h.
i. j.
2.
Cash Sales discount s receivable
494,000 26,000 520,000
Marketing and istrative expenses Factory overhead control Cash
30,000 49.720 79,720
s payable Cash
170,000 170,000
Applied factory overhead Under-applied overhead Factory overhead control
85,500 3,260
Cost of goods sold Under-applied overhead
3,260
3,260 3,260
Joselyn Company Statement of Cost of Goods Sold Month Ended January 31, 2010 Direct materials used Direct labor Applied factory overhead Factory cost Work in process, January 1 Total cost of goods placed in process Work in process, January 31 (Job. 103) Cost of goods manufactured Finished goods, January 1 Goods available for sale Finished goods, January 31 Cost of goods at normal Under-applied overhead Cost of goods sold at actual
P216,350 156,000 85,500 457,850 15,000 472,850 92.150 380,700 65,000 445,700 65,000 380,700 3,260 P383,960
Problem 1-7 (1)
a. b.
Materials s payable Work in process Factory overhead control Materials
22,000 22,000 18,600 2,400 21,000
26
27
Problem 1-7, continued: c.
d. e.
Materials Factory overhead control Work in process (Job 622)
600
s payable Materials
800
200 400 800
Payroll
38,000 Payroll payable
f.
g.
h.
i.
j.
k.
Work in process Factory overhead control Selling expenses istrative expenses Payroll
38,000 20,900 7,600 5,700 3,800 38,000
Factory overhead control Accumulated depreciation Prepaid insurance s payable Work in process Applied factory overhead P20,900 x 80% Finished goods (P23,436 + P29.948) Work in process Job 621 Work in process, March 1 P6,580 Current costs: Direct materials 5,300 Direct labor 6,420 Applied FO 5,136 Total P23,436
9,404.50 2,000 250 7,154.50 16,720 16,720 53,384 53,384 Job 622 P8,260 7,000 8,160 6,528 P29,948
5,900 6,320 5,056 P21,506
s receivable Sales (P15,000 + P23,436) x 140%
53,810.40
Cost of goods sold Finished goods
38,436
Cash
40,000
53,810.40
38,436
s receivable 2.
Job 623 P4,230
Schedule of inventory, March 31: Materials inventory (balance of Materials )
40,000 P14,800
27
28
Finished goods (Job 622) Work in process (Job 623)
29,948 21,506 Problem 1-8
(1) Nancy Corporation Cost of goods sold statement Month Ended September 30, 2010 Direct materials used Direct labor Applied factory overhead Manufacturing cost Work in process inventory, Sept. 1 Total Work in process inventory, Sept.30 Cost of goods manufactured Finished goods inventory, Sept.1 Goods available for sale Finished goods inventory, Sept. 30 Cost of goods sold
P 29,800 18,600 27,450 75,850 4,070 79,920 4,440 75,480 9,800 85,280 9,250 P 76,030
(2) Nancy Corporation Income Statement Month Ended September 30, 2010 Net sales (P144,900 – P1,300) Cost of goods sold Gross profit Operating expenses: Marketing expenses Depreciation (P30 + P16 + P20 + 24) General istrative expenses Net income
P143,600 76,030 67,570 P 25,050 90 19,700
44,840 P 22,730
(3) Computation of over(under)applied factory overhead: Applied factory overhead Actual factory overhead: Overhead paid Indirect materials Depreciation- building Depreciation- machinery and equip Indirect labor Under-applied factory overhead
P27,450 P20,100 3,950 150 800 4,400
29,400 P( 1,950 )
28
29
Problem 1-9 (1)
Pena Manufacturing Company Statement of Cost of Goods Manufactured For the Year Ended December 31, 2010 Raw materials inventory beginning Purchases [(P52,000 ÷ 65%) x 2] Available for use Raw materials inventory, ending Direct materials used Direct labor Factory overhead Manufacturing cost Work in process inventory, ending Cost of goods manufactured
P 60,000 * 160,000 220,000 20,000 200,000 120,000 80,000 400,000 25,000 P375,000
*
Let X= Raw materials inventory, beginning 1/3X= Raw materials inventory, ending Therefore: X + P160,000 – 1/3X = P200,000 2/3X = P40,000 X = P60,000 (2)
Pena Manufacturing Company Income Statement For the Year Ended December 31, 2010 Sales (P300,000 ÷ 60%) Cost of goods sold: Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, ending Gross profit Operating expenses (squeeze) Selling expenses General expenses Net income before tax Provision of income tax Net income after tax
P500,000 P375,000 25,000 400,000 100,000 96,000 24,000
300,000 200,000 120,000 80,000 28,000 P 52,000
ing computations: Finished goods inventories: COGM + FG, beg – FG, end = COGS Let X = Finished goods inventory beginning 4X = Finished goods inventory ending Therefore: P375,000 + X – 4X = P300,000 -3X = -P375,000
29
30
X = P25,000 finished goods, beginning 4X = P100,000 finished goods ending
Problem 1-9, continued: Operating expenses: SE + GE = OE Let X = GE 4X = SE Therefore: 4X + X = 120,000 5X = 120,000 X = 24,000 GE 4X = 96,000 SE Problem 1-10 Journal Entries (a) Materials s payable
18,400
(b) Factory overhead control s payable
53,060
18,400 53,060
(c) Payroll
172,000 Accrued payroll
172,000
Work in process- direct labor Factory overhead control Selling expenses istrative expenses Payroll
121,000 25,000 16,000 10,000
Accrued payroll (P4,500 + P172,000) Cash
176,500
172,000 176,500
(d) Work in process- direct materials Factory overhead control Materials (e) Work in process Factory overhead control
115,000 16,600 131,600 94,660 94,660
(f) Finished goods Work in process
376,000
(g) s receivable Sales (P19,000 + P376,000 – P24,000) x 130%
482,300
Cost of goods sold Finished goods P19,000 + P376,000 – P24,000= P371,000
376,000 482,300 371,000 371,000
30
31
Problem 1-10, continued: (h) Cash (P425,800 x 98%) Sales discount (P425,840 x 2%) s receivable
417,323 8,517 425,840
(i) Selling expenses (P60,000 x 60%) General istrative expense (P60,000 x 40%) s payable (j) s payable Cash
36,000 24,000 60,000 208,000 208,000
Problem 1-11 (1)
Cost of goods sold statement: Materials inventory, June 1 Purchases Materials available for sale Less: Materials inventory, June 30 Indirect materials used Direct materials used Direct labor [(P49,000 ÷ 7) × 6] Factory overhead: General factory overhead Depreciation Indirect materials Insurance Indirect labor (P49,000 ÷ 7) Manufacturing cost Work in process inventory, June 1 Total Work in process inventory, June 30 Cost of goods manufactured Finished good inventory, June 1 Goods available for sale Finished goods inventory, June 30 Cost of goods sold
(2)
P15,000 33,000 P48,000 P19,000 1,000
P13,000 17,000 1,000 2,000 7,000
20,000 28,000 42,000
40,000 110,000 40,000 150,000 30,000 120,000 70,000 190,000 50,000 P140,000
Summary journal entries: (a) (b)
Materials s payable
33,000
Work in process-Direct materials Factory overhead control Materials
28,000 1,000
33,000
29,000
31
32
Problem 1-11, continued: (c )
Payroll
49,000 Accrued payroll
(d)
(e) (f)
49,000
Work in process-direct labor Factory overhead control Payroll
42,000 7,000
Finished goods Work in process
120,000
s receivable Sales (P140,000 × 150%)
210,000
Cost of goods sold Finished goods
140,000
Problem 1-12 Computation of Costs: 1. Direct materials used Direct labor Applied factory overhead (P1,300,000 x 160%) Manufacturing cost
49,000 120,000 210,000 140,000
P 710,000 1,300,000 2,080,000 P4,090,000
2. Supplies Indirect labor Depreciation of building and factory equip. Miscellaneous Total actual factory overhead
P 100,000 900,000 400,000 550,000 P1,950,000
3. Raw materials inventory, Jan. 1, 2010 Purchases Available for use Raw materials used Raw materials inventory Less indirect materials used (supplies) Raw materials inventory, Dec. 31,2010
P 100,000 800,000 900,000 ( 710,000 ) 190,000 100,000 P 90,000
4. Manufacturing cost (1) Work in process, Jan. 1, 2010 Cost of goods manufactured Work in process, Dec. 31,2010
P4,090,000 60,000 ( 4,120,000 ) P 30,000
5. Applied factory overhead (1) Applied factory overhead (2) Overapplied factory overhead
P2,080,000 1,950,000 P 130,000
6. Cost of goods sold at normal
P4,020,000
32
33
Overapplied factory overhead (5) Cost of goods sold at actual
( 130,000) P3,890,000 Problem 1-13
(1) JMG Company Balance Sheet December 31, 2009 Assets Cash (Schedule 1) s receivable Finished goods inventory [P12,000 – (1/3 x P12,000)] Work in process inventory [P4,000 – (50% x P4,000)] Materials inventory [P8,000 – (50% x P8,000)] Prepaid expenses Property, plant, and equipment (P60,000 – P8,000) Total Liabilities and Stockholders’ Equity Current liabilities Stockholders’ equity: Capital stock Retained earnings Total
P 38,000 20,000 8,000 2,000 4,000 1,000 52,000 P125,000 P 35,000 P60,000 30,000
90,000 P125,000
ing Computations: Schedule 1 Cash balance, Jan 1, 2009 Collection of s receivable (a) Total Payments: Payroll (b) Factory overhead (c ) Marketing expenses (d) istrative expenses (e) Payment of materials purchases (Per COGS) Cash balance, Dec. 31, 2009
P 10,000 120,000 130,000 P18,000 16,000 12,000 16,000 30,000
92,000 P 38,000
(a) s receivable, Jan. 1, 2009 Sales on s receivable, Dec. 31, 2009 (required balance) Collections
P 20,000 120,000 ( 20,000 ) P120,000
(b) Current liabilities, Jan. 1, 2009 Direct labor cost (accrued payroll) Current liabilities, Dec. 31, 2009 (required balance) Payment of current liabilities
P 35,000 18,000 ( 35,000 ) P 18,000
33
34
Problem 1-13, continued: (c) Actual factory overhead (P18,000 + P4000) Less depreciation (P8,000 x ¾) Payment
P 22,000 6,000 P 16,000
(d) Marketing expenses paid (P120,000 x 10%)
P 12,000
(e) istrative expenses (P120,000 x 15%) Less depreciation (P8,000 x ¼) Payment
P 18,000 2,000 P 16,000
(2) JMG Company Income Statement Year Ended December 31, 2009 Sales Cost of goods sold at actual (Sch. 2) Gross profit Operating expenses: Marketing expenses istrative expenses Net income
P120,000 80,000 40,000 P12,000 18,000
30,000 P 10,000
Schedule 2- Statement of Cost of Goods Sold Direct materials used: Inventory, Jan. 1 Purchases (squeeze) Inventory, Dec. 31 Direct labor Applied factory overhead Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold at normal Under-applied factory overhead Cost of goods sold at actual
P 8,000 30,000 ( 4,000 )
P 34,000 18,000 18,000 70,000 4,000 74,000 2,000 72,000 12,000 84,000 8,000 76,000 4,000 P 80,000
34
35
Problem 1-14 1.
Cost of Jobs: Direct materials used Direct labor Applied factory overhead Total factory cost
Job 234 P 32,500 35,000 35,000 P102,500
Job 567 P 59,000 30,000 30,000 P119,000
2: (a) Purchases of materials Materials requisitioned Materials returned to storeroom Materials balance
P100,000 (94,000) 2,500 P 8,500
(b) Materials requisitioned Direct labor Applied factory overhead Materials returned for Job 2,500 Completed job 234 Work in process, end
P 94,000 65,000 65,000 (2,500) (102,500) P119,000
(c) Cost of goods sold (Job 234)
P102,500 Problem 1-15
1.
Journal entries b. c.
d.
Materials s payable Work in process Factory overhead control Materials
720,000 720,000 560,000 40,000 600,000
Factory payroll Withholding tax payable SSS contributions payable Phil. Health contributions payable Pag-ibig contributions payable Payroll payable
680,000
Payroll payable Cash
634,100
Work in process Factory overhead control Factory payroll
34,000 7,500 2,400 2,000 634,100 634,100
620,000 60,000 680,000
35
36
Problem 1-15, continued: e.
f. g. h. i.
Factory overhead control SSS Contributions payable Phil. Health contributions payable Pag-ibig contributions payable
14,600
Factory overhead control Accumulated depreciation
60,000
2.
60,000
Factory overhead control s payable Work in process Applied factory overhead Finished goods Work in process Work in process, June 1 Current costs: Direct materials Direct labor Applied FO Total costs
j.
10,200 2,400 2,000
340,000 340,000 620,000 620,000 1,200,000 1,200,000 Job 40 P 20,000
Job 41 P 60,000
100,000 200,000 200,000 P520,000
220,000 200,000 200,000 P680,000
s receivable Sales
900,000
Cost of goods sold Finished goods
520,000
900,000 520,000
Work in Process, June 30, 2010 (Job 42): Direct materials Direct labor Applied factory overhead Work in process, June 30
P240,000 220,000 220,000 P680,000
Or: Balance, June 1 (c) (d) (h) Balance, June 30
Work in process P 80,000 P1,200,000 560,000 620,000 620,000 1,880,000 1,200,000 P680,000
(i)
36
37
Problem 1-16 Jenna Company Statement of Cost of Goods Sold Year Ended December 31, 2010 Direct materials used: Raw materials inventory, Jan 1 Net purchases (P400,000 – P4,200) Available for use Raw materials inventory, Dec. 31 Direct labor Factory overhead: Factory maintenance Factory power and heat Insurance Depreciation Factory superintendence Indirect labor Factory supplies Manufacturing cost Work in process, Jan. 1 Cost of goods placed in process Work in process, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec.31 Cost of goods sold
P395,800 395,800 24,000 P38,400 19,400 4,800 17,500 100,000 20,000 22,400
P371,800 180,000
222,500 774,300 84,000 858,300 30,000 828,300 37,500 865,800 40,000 P825,800
Problem 1-17 Jenny Incorporated Statement of Cost of Goods Manufactured and Sold Month Ended May 31, 2010 Direct materials used: Inventory, April 30, 19x8 Purchases (P510,000 + P15,000) Available for use Inventory, May 31, 19x8 Direct labor Factory overhead Indirect labor Property tax Insurance (60%) Depreciation Utilities Factory cost Work in process inventory, April 30, 19x8 Cost of goods placed in process
P28,000 525,000 553,000 23,000 P
90,000 60,000 12,000 50,000 108,000
P 530,000 260,000
320,000 1,110,000 150,000 1,260,000
37
38
Work in process inventory, May 31, 19x8 Cost of goods manufactured
130,000 P1,130,000
Problem 1 – 18
1.
Journal Entries: (a) (b) (c) (d)
(e)
(f) (g)
Materials s payable
136,000
Factory payroll Payroll payable
180,000
Manufacturing overhead control s payable
158,500
180,000 158,500
Work in process Manufacturing overhead control Materials
105,500
Work in process Manufacturing overhead control Factory payroll
156,000
Work in process Applied factory overhead
195,000
15,500 121,000 24,000 180,000
Finished goods Work in process Work in process, May 1 Current costs: Direct materials Direct labor Applied FO Total costs
(h)
136,000
195,000 394,400 394,400
Job 809 P 11,500
Job 811 P 13,900
Job 812 P -
14,000 64,000 80,000 P169,500
24,000 32,000 40,000 P109,900
34,000 24,000 45,000 P115,000
Cash
412,500 Sales
Cost of goods sold Finished goods Job 809 Job 810 Job 811 Total (i)
Operating expenses Cash
412,500 308,200 308,200 P169,500 28,800 109,900 P308,200 74,500 74,500
38
39
Problem 1-18, continued: 2.
Noynoy Manufacturing Corporation Statement of Cost of Goods Manufactured Month Ended May 31, 2010 Direct materials used: Materials inventory, May 1 Purchases Available for use Less: Materials inventory, May 31(Sq) P60,500 Indirect materials used 15,500 Direct labor Applied factory overhead Factory cost Work in process inventory, May 1 Total cost of goods placed in process Work in process inventory, May 31 (Job 813) Cost of goods manufactured
3.
P105,500 156,000 195,000 456,500 25,400 481,900 87,500 P394,400
P412,500 P 28,800 394,400 423,200 115,000
308,200 104,300 74,500 P 29,800
Schedule of Inventory balances, May 31, 2010: Materials inventory Work in process inventory (Job 813): Direct materials Direct labor Applied factory overhead Finished goods inventory (Job 812): Direct materials Direct labor Applied factory overhead
5.
76,000
Noynoy Manufacturing Corporation Income Statement Month Ended May 31, 2010 Sales Cost of goods sold: Finished goods inventory, May 1 Cost of goods manufactured Goods available for sale Finished goods inventory, May 31, (Job 812) Gross profit Operating expenses Net profit
4.
P 45,500 136,000 181,500
P 60,500 P33,500 24,000 30,000
87,500
P34,000 36,000 45,000
115,000
P193,700, this is not reported in the financial statements.
39
40
Problem 1-19 (1)
Materials Control balance, April 30: Materials Control balance, April 1 Raw materials purchased during April Direct materials used Indirect materials used Materials Control balance, April 30 Work in Process balance, April 30: Work in process, April 1: Job 202 Job 203 Job 204 Put into process during April: Direct materials Direct labor Applied factory overhead (P16/hr) Total cost of goods placed in process Finished goods: Job 202 Job 204 Job 205 Job 207 Work in process, April 30{ Job 203 Job 206
P 2,750 11,500 ( 9,705) ( 2,790) P 1,755
P4,700 3,280 4,160
P12,140
P 9,705 9,500 7,600
26,805 P38,945
P9,550 6,930 6,280 5,870
28,630
P6,535 3,780
P10,315
ing Computations: Work in process, April 1 Current costs: Direct materials Direct labor Applied FO (P16/DLH) Total cost
(2)
Job 202 P4,700
Job 203 P3,280
Job 204 P4,160
Job 205 P -
Job 206 P -
Job 207 P -
1,250 2,000 1,600 P9,550
555 1,500 1,200 P6,535
970 1,000 800 P6,930
2,500 2,100 1,680 P6,280
1,980 1,000 800 P3,780
2,450 1,900 1,520 P5,870
Work in process (Job 202) Materials control Payroll Applied factory overhead
4,850
Finished goods (Job 202) Work in process
9,550
s receivable Sales (P9,550 x 150%) Cost of goods sold Finished goods
1,250 2,000 1,600 9,550 14,325 14,325 9,550 9,550 40
41
(3)
(4)
(5)
Direct materials used Direct labor Applied factory overhead Factory cost Work in process, April 1 Work in process, April 30 Cost of goods manufactured
P 9,705 9,500 7,600 26,805 12,140 (10,315) P28,630
Applied factory overhead Actual factory overhead: Depreciation Indirect labor Factory rent and utilities Indirect materials used Under-applied overhead
P 7,600 P1,375 2,500 2,700 2,790
Sales (P24,280 * x 150%) Cost of goods sold : Finished goods, April 1 (Job 201) Cost of goods manufactured Finished goods, April 30 (Jobs 204 & 207) Cost of goods sold at normal Under-applied overhead Gross profit * Job 201 Job 202 Job 205 Total
9,365 P(1,765) P36,420
P 8,450 28,630 (12,800) 24,280 1,765
26,045 P10,375
P 8,450 9,550 6,280 P24,280 Problem 1-20
(1) Work in process, March 1 Cost added this month: Direct materials Direct labor Applied factory overhead Total cost
(2)
Job 204 P50,460
Job 205 P118,060
Job 206 P124,101
Job 207 P -
9,480 26,844 7,717.65 P94,501.65
11,320 22,750 7,475 P159,605
10,490 28,920 8,314.50 P171,825.50
22,440 20,370 6,693 P 49,503
Applied factory overhead Actual factory overhead Under-applied factory overhead this month Over-applied factory overhead, March 1 Over-applied factory overhead remaining in FO control
P 30,200.15 40,941.87 10,741.72 (dr) 12,300.00 (cr) P 1,558.28 (cr)
41
42
Problem 1-20, Continued: (3)
Work in process, March 31: Job 205 Job 206 Job 207 Total
(4)
P159,605.00 171,825.50 49,503.00 P380,933.50
Cost of goods manufactured: Work in process, March 1 Cost added this month: Direct material Direct labor Applied factory overhead Total costs Work in process, March 31 (3) Cost of goods manufactured (Job 204)
P292,621.00 P53,730.00 98,884.00 30,200.15
182,814.15 475,435.15 380,933.50 P 94,501.65
Problem 1-21 Tanny Company Statement of Cost of Goods Manufactured and Sold Year Ended December 31, 2010 Direct materials used: Materials inventory, Jan. 1 Purchases (1) Available for use Materials inventory, Dec. 31 Materials used Indirect materials (squeeze) Direct labor (5) Applied factory overhead (6) Factory cost Work in process, Jan. 1 Total cost of goods placed in process Work in process, Dec. 31 (4) Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 (3) Cost of goods sold at normal Over-applied factory overhead (7) Cost of goods sold at actual (2)
P 15,000 100,000 115,000 23,000 92,000 12,000
P 80,000 100,000 150,000 330,000 20,000 350,000 30,000 320,000 80,000 400,000 37,000 363,000 (3,000) P360,000
42
43
Problem 1-21, continued: (1)
s payable, Dec. 31 Payment of s payable s payable, Jan. 1 Purchases of materials
P 5,000 102,000 (7,000) P100,000
(2)
s receivable, Dec. 31 Collections of s receivable s receivable, Jan. 1 Sales Cost ratio Cost of goods sold at actual
P 65,000 480,000 (45,000) P500,000 72% P360,000
(3)
Cost of goods sold at actual Over-applied factory overhead Cost of goods at normal Goods available for sale Finished goods inventory, Dec. 31
P360,000 3,000 363,000 400,000 P 37,000
(4)
Materials Direct labor Applied factory overhead (150% x P8,000) Work in process inventory, Dec. 31
P 10,000 8,000 12,000 P 30,000
(5)
Cost of goods manufactured Work in process inventory, Dec. 31 Work in process inventory, Jan. 1 Factory cost Direct materials used Conversion cost Direct labor cost (x) Applied factory overhead (150%x)
P320,000 30,000 (20,000) 330,000 (80,000) 250,000 100,000 P150,000
(6)
Applied factory overhead Actual factory overhead: Indirect materials used Indirect labor : Accrued payroll, 12/31 Payment Accrued payroll, 1/1 Payroll Direct labor Indirect labor Misc. factory overhead Over-applied factory overhead
P150,000 P 12,000 P 14,000 172,000 ( 11,000) 175,000 (100,000) P 75,000 P 60,000
147,000 P 3,000
43
44
Problem 1-22 1.
Direct materials (P396,000 – P12,000) Direct labor Applied factory overhead (P50 x 2,800 DL hours) Total cost of Project No. 27
P 384,000 248,000 140,000 P 772,000
2.
Sales Cost of goods sold Gross profit Selling and istrative expenses Net profit
P1,400,000 772,000 628,000 140,000 P 488,000 Problem 1-23
1.
s payable, May 31 Payment of s payable s payable, May 1 Purchases of materials
P 12,000 78,000 ( 10,000) P 80,000
2.
Cost of goods sold Finished goods inventory, May 31 Finished goods inventory, May Cost of goods completed during May
P165,000 7,000 (25,000) P147,000
3.
Machine hours Predetermined overhead rate (P750,000 / 15,000 hours) Applied factory overhead
1,000 hours P50 P 50,000
4.
Direct materials Direct labor Applied factory overhead (P50 x 30 machine hours) Work in process, May 31
P 2,000 1,000 1,500 P 4,500
5.
Cost of goods manufactured Work in process, May 31 Work in process, May 1 Factory cost Direct labor (940 DL hours x P25) Applied factory overhead Direct materials used
P147,000 4,500 (2,000) 149,500 (23,500) (50,000) P 76,000
6.
Direct materials used Direct materials control, May 31 Materials purchased Direct materials control, May 1
P 66,000 20,000 (80,000) P 6,000
7.
Applied factory overhead Actual factory overhead
P 50,000 55,000
44
45
Under-applied factory overhead
P (5,000)
Problem 1-24
Schedule of Cost of Goods Sold Materials inventory, July 1 Purchases Available for use Less: Materials inventory, July 31 Indirect materials used Direct materials used Direct labor Factory overhead Factory cost Work in process inventory, July 1 Total Work in process inventory, July 31 Cost of goods manufactured Finished goods inventory, July 1 Goods available for sale Finished goods inventory, July 31 Cost of goods sold
P 20,000 65,000 85,000 P15,000 20,000
35,000 50,000 200,000 100,000 350,000 7,000 357,000 11,000 346,000 34,000 380,000 30,000 P350,000
Computations: 1. 2. 3. 4. 5.
P50,000 P200,000 P100,000 P346,000 P350,000
6. s payable, July 1 Materials purchases s payable, July 31 Payments of s payable
P 18,000 65,000 ( 6,000 ) P 77,000
7. s receivable, July 1 Sales on s receivable, July 31 Collections of s receivable
P 54,000 500,000 ( 22,000 ) P532,000
8. Accrued payroll, July 1 Payroll for July Accrued payroll, July 31 Payment of payroll
P 13,000 255,000 ( 9,000 ) P259,000
45
46
46
CHAPTER 1
Multiple Choice Questions- Theoretical 1. 2. 3. 4. 5.
a c a c d
6. b 7. c 8. d 9. a 10. b
11. d 12. a 13. b 14. d 15. a
16. a 17. b 18. d 19. b 20. a
21. 22. 23. 24. 25.
b c c d c
26. 27. 28. 29. 30.
c a c c d
Multiple Choice Questions - Computational 1.
(b) Direct Materials Direct Labor Factory Overhead: Depreciation – Factory equipment Factory rent Factory insurance Materials handling Manufacturing cost
2.
P1,000 2,000 500 1,500
5,000 P80,000
(a) Decrease in finished goods inventory Add: Raw materials purchased Direct labor payroll Factory overhead Total Less: Increase in raw materials inventory Cost of goods sold
3.
P47,000 28,000
P35,000 P430,000 200,000 300,000
930,000 P965,000 15,000 P950,000
(d) Direct labor- Wages of machine operations Direct materials: Metal wire Plastic coating
P200,000 P500,000 380,000
P880,000
1
2
4.
5.
6.
(c) Materials inventory, beginning Purchases Materials available for use Materials inventory, ending Materials used Direct labor Factory overhead Manufacturing cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured
P 32,400 40,000 72,400 34,000 38,400 33,000 17,160 88,560 7,200 95,760 16,240 P 79,520
(d) Materials inventory, Jan. 1 Purchases Freight in Materials available for use Materials inventory, Dec. 31 Materials used Direct labor Factory overhead Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold
P 17,000 240,000 3,000 260,000 19,000 241,000 320,000 188,000 749,000 12,000 761,000 13,000 748,000 62,000 810,000 46,000 P764,000
(b) Solve upward from Cost of Goods Sold. Materials inventory, Jan. 1 Purchases (squeeze) Materials available for use Materials inventory, Dec. 31 Materials used Direct labor Factory overhead Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold (given)
P 16,000 72,000 88,000 17,000 71,000 30,000 20,000 121,000 16,000 137,000 30,000 107,000 14,000 121,000 20,400 P100,600
(1)
(2)
2
3
7.
8.
9.
(c) Direct materials used Direct labor Factory overhead: Factory supplies Indirect labor Machine maintenance and repair Factory rent, light and power Depreciation Payroll taxes Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold (b) Raw materials inventory, beginning Purchases Materials available for use Raw materials inventory, ending Raw materials used Direct labor Factory overhead: Indirect labor Taxes, utilities and depreciation Factory cost Work in process inventory, beginning Total Work in process inventory, end Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, end Cost of goods sold (b) Direct materials used Direct labor Factory overhead Factory cost Work in process inventory, beginning Total Work in process inventory, end Cost of goods manufactured Finished goods inventory, beginning (squeeze) Goods available for sale Finished goods inventory, end Cost of goods sold
P100,000 250,000 P 6,000 50,000 10,000 24,000 10,000 30,000
130,000 480,000 30,000 510,000 40,000 470,000 50,000 520,000 60,000 P460,000
(1)
(2)
P 44,000 600,000 644,000 60,000 584,000 240,000 P120,000 100,000
220,000 1,044,000 80,000 1,124,000 96,000 1,028,000 50,000 1,078,000 36,000 P1,042,000 P 500,000 600,000 700,000 1,800,000 200,000 2,000,000 250,000 1,750,000 610,000 2,360,000 760,000 P1,600,000
3
4
10.
11.
(d) Direct materials, Dec. 31, 19x7 Purchases Available for use Direct materials, Dec. 31, 19x8 (squeeze) Direct materials used (P301,000- P180,000) Direct labor Factory overhead [(P180,000 / 60%) x 40% ] Factory cost Work in process, Dec 31, 19x7 Total Work in process, Dec. 31, 19x8 (squeeze) Cost of goods manufactured Finished goods, Dec. 31, 19x7 Goods available for sale Finished goods, Dec. 31, 19x8 (squeeze) Cost of goods sold (P500,000 x 80%)
P 16,000 170,000 186,000 65,000 121,000 180,000 120,000 421,000 34,000 455,000 25,000 430,000 30,000 460,000 60,000 P400,000
(1)
(2)
(3)
(a) Solve upward from Cost of Goods Sold Raw materials inventory, 19x7 Purchases (squeeze) Materials available for use Raw materials inventory, 19x8 Raw materials used Direct labor Factory overhead (squeeze) Manufacturing cost Work in process inventory, 19x7 Total Work in process inventory, 19x8 Cost of goods manufactured (Squeeze) Finished goods inventory , 19x7 Goods available for sale Finished goods inventory , 19x8 Cost of goods sold (given) Accrued factory payroll, 19x7 Direct labor Indirect labor Accrued factory payroll, 19x8 Payment of payroll
P 60,000 630,000 690,000 90,000 600,000 410,000 821,000 1,831,000 34,000 1,865,000 35,000 1,830,000 46,000 1,876,000 36,000 P1,840,000 P 6,200 410,000 140,000 ( 70,000 ) P549,200
(1)
(2)
(3)
4
5
12.
13.
(b) Solve upward from Cost of Goods Sold. Raw materials inventory, Jan. 1 Gross purchases (squeeze) Freight in Raw materials available for use Raw materials inventory, Dec. 31 Raw materials used Direct labor Factory overhead: Indirect labor P12,160 Factory overhead expenses 31,730 Indirect materials 21,390 Manufacturing cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured (16,000 units) Finished goods inventory, Jan. 1 (500 units x P12*) Goods available for sale Finished goods inventory, Dec. 31 (1,500 units x P12) Cost of goods sold (15,000 units x P12)
P 11,600 88,610 5,570 105,800 9,640 96,160 32,640
(1)
65,280 194,080 5,740 199,820 7,820 192,000 6,000 198,000 18,000 P180,000
* P192,000 / 16,000 units = P12 Sales Cost of goods sold Gross profit
P360,000 180,000 P180,000
(d) Materials inventory, beginning Purchases Materials available for use Materials inventory, ending Materials used Direct labor (P15,000 ÷ 2/3) Factory overhead Factory cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, ending Cost of goods sold Sales Cost of goods sold Gross profit Operating expenses ( P72,000 x 6%) Operating income Other expenses (P72,000 x 5%) Net income before income tax
P 8,000 36,000 44,000 8,500 35,500 22,500 15,000 73,000 8,000 81,000 15,000 66,000 7,000 73,000 10,200 P62,800 P 72,000 62,800 9,200 4,320 4,880 3,600 P 1,280
(2)
(1)
(2)
5
6
14.
15.
(a) Cost of goods sold Finished goods inventory, Dec 31 Goods available for sale
P111,000 17,500 P128,500
Sales Cost of goods sold Gross profit Operating expenses: Marketing expenses General and istrative expenses Operating income
P182,000 111,000 71,000 P14,000 22,900
(1)
36,900 P 34,100
(2)
Factory overhead: Indirect labor Factory heat, light and power Factory rent Factory insurance Production supervisor’s salary Indirect materials used (P5,600+P16,500- P5,180) Overtime pay [250 hours x (P22 x .5)] Total
P 22,000 11,220 18,500 2,000 5,000 16,920 2,750 P78,390
(1)
Direct materials inventory, March 1 Purchases Available for use Direct materials inventory, March 31 Direct materials used Direct labor (4,250 hours x P22) Factory overhead (1) Factory cost Work in process inventory, March 1 Total Work in process inventory, March 31 Cost of goods manufactured Finished goods inventory, March 1 Goods available for sale Finished goods inventory, March 31 (Squeeze) Cost of goods sold (given)
P 10,250 105,000 115,250 12,700 102,550 93,500 78,390 274,440 60,420 334,860 52,800 282,060 45,602 327,662 47,662 P280,000
(d)
(2)
6
7
16.
(d) Materials, inventory, beginning Purchases (Squeeze) Available for use Materials inventory, ending Raw materials used Direct labor [(P686,000-P326,000) ÷ 160 %] Factory overhead (P225,000 x 60%) Manufacturing cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured
17.
P 75,000 336,000 411,000 85,000 326,000 225,000 135,000 686,000 80,000 766,000 30,000 P 736,000
(2)
(3)
(c) Materials inventory, July 1 Purchases Freight in Available for use Materials inventory, July 31 Direct materials used Direct labor Factory overhead [P468,400+ (P116,000 x 90%)] Manufacturing cost Work in process inventory, July 1 Total Work in process inventory, July 31 Cost of goods manufactured Finished goods inventory, July 1 Goods available for sale Finished goods inventory, July 31 Cost of goods sold
18.
(1)
P 88,000 366,000 6,000 460,000 64,000 396,000 523,000 572,800 1,489,800 19,800 1,521,600 38,800 1,482,800 44,200 1,527,000 66,000 P1,461,000
(1)
(2)
(b) Direct materials: Materials inventory, Dec 1 Purchases Materials inventory, Dec 31 Direct labor Prime cost Direct labor Factory overhead [(P40,000 ÷ P6.40) x P8} Conversion cost
P24,000 56,000 ( 20,000 )
P 60,000 40,000 P100,000
(1)
P 40,000 50,000 P 90,000
(2)
7
8
19.
20.
(d) 1. Direct materials inventory, end (P100,000 – P70,000)
P30,000
2. Work in process control, end (P320,000 – P305,000)
P15,000
3.
P25,000
Finished goods control, end, (P325,000 – P300,000)
(a) Direct materials, Dec. 31, 2008 (Squeeze) Purchases Available for use Direct materials, Dec 19x9 Direct materials used (given) Direct labor (P72,000 ÷ 200%) Applied factory overhead Manufacturing cost Work in process inventory, Dec. 31, 2008 (Squeeze) Total Work in process inventory, Dec. 31, 19x9 Cost of goods manufactured Finished goods inventory, Dec. 31, 19x8 Goods available for sale Finished goods inventory, Dec. 31, 19x9 Cost of goods sold (given)
21.
P 30,000 90,000 120,000 20,000 100,000 36,000 72,000 208,000 3,000 211,000 35,000 176,000 50,000 226,000 46,000 P180,000
(1)
(2)
(a) Materials inventory, Jan. 1 P 34,200 Purchases (P364,000 + P8,600 – P5,200) 367,400 Available for use 401,600 Materials inventory, Dec. 31 49,300 Direct materials used 352,300 Direct labor 162,500 Factory overhead (P21,350 + P83,400 + P47,900) 152,650 Manufacturing cost 667,450 Work in process inventory, Jan 1 81,500 Total 748,950 Work in process inventory, Dec. 31 42,350 Cost of goods manufactured (4,000 units) 706,600 Finished goods inventory, Jan 1 (300 units) 48,600 Goods available for sale (4,300 units) 755,200 Finished goods inventory, Dec. 31 [420 units x (P706,600 ÷ 4,000 units)] 74,193 Cost of goods sold P281,007 (1) P74,193/420 units = P176.65 (2) Sales (3,880 units x P220) Cost of gods sold Gross profit
P853,600 281,007 P172,593
8
9
22.
(c) Materials used Direct labor Applied factory overhead (P290,000 x 30%) Factory cost Work in process inventory, April 1, 19x7 Total Work in process inventory, April 1, 19x8 Cost of goods manufactured
23.
P 440,000 290,000 87,000 817,000 41,200 858,200 42,500 P 815,700
Unit cost (P815,700 ÷ 18,000 nits)
P 45. 32
Applied factory overhead Actual factory overhead Indirect labor Light and power Depreciation Repairs Miscellaneous Under-applied factory overhead
P 87,000 P46,000 4,260 4,700 5,800 29,000
(1)
89,760 P (2,760)
(2)
P182,000 180,000 P 2,000
(1)
P710,000 512,600 197,400 100,900 P 96,500
(2)
(b) Applied factory overhead (P70,000 + P112,000) Actual factory overhead Over-applied factory overhead Sales: Product X (9,000 x P30) Product Y (8,800 x P50) Cost of goods sold (Sch. 1) Gross profit Operating expenses Operating income
P270,000 440,000
Sch. 1: Manufacturing cost (P210,000 + P296,000) Beginning inventories (P21,000 + P33,300) Total Ending inventories (P42,000 + P3,700) Cost of goods sold at normal Over-applied factory overhead Cost of goods sold at actual
P506,000 54,300 560,300 45,700 514,600 ( 2,000 ) P512,600
9
10
24.
25.
(d) Direct labor (8,000 hrs. x P5.60) + (4,600 hrs. x P6.00) Factory overhead (8,000 hrs. x P6.00) + (4,600 hrs x P8.00) Conversion cost
P 72,400 84,800 P157,200
(1)
Materials inventory, beginning Purchases Available for sale Materials inventory, ending Direct materials used Conversion cost Factory cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, ending Cost of goods sold
P 20,000 60,000 80,000 18,000 62,000 157,200 219,200 15,000 234,200 17,600 216,600 22,000 238,600 17,000 P221,600
(2)
(c) Materials inventory, April 1, 19x8 Purchases Available for use Materials inventory, June 30, 19x8 Direct materials used Direct labor Factory overhead Factory cost Finished goods inventory, April 1, 19x8 Goods available for sale Finished goods inventory, June 30, 19x8 (200 x P395) Cost of goods sold Unit cost of equipment manufactured (P4,937, 500 ÷ 12,500 units)
P 268,000 1,946,700 2,214,200 167,000 2,047,700 2,125,800 764,000 4,937,500 43,000 4,980,500 79,000 P4,901,500 P395.00
Sales Cost of goods sold Gross profit
P 6,634,000 4,901,500 P 1,732,500
Per unit (P1732,500 ÷ 12,400)
P139. 72
Gross profit Operating expenses Net income
P 1,732,500 977,000 P 755,500
Per unit (P755, 500 ÷ 12,400)
P 60.93
(1)
(2)
(3)
10
11
26
27.
28.
(d) Predetermined overhead rate (P96,000/P120,000)
80%
Applied factory overhead (P8,000 x 80%) Actual factory overhead Underapplied factory overhead
P6,400 7,200 P 800
(2)
(d) (1)
Indirect labor Rent – factory building Indirect materials used Other factory overhead costs Total
P 6,000 60,000 8,000 40,000 P114,000
(2)
Applied factory overhead costs (16,000 DL hours x P7)
P112,000
(3)
Direct Materials used Direct labor Applied factory overhead Cost of goods sold
P250,000 300,000 114,000 P664,000
(d) Cost of goods placed in process Finished goods Work in process – end (Job 30)
29.
(1)
P360,000 320,000 P 40,000
(d) (1)
Total manufacturing costs Direct labor (P225,000/72%) Applied factory overhead (P900,000 x 25%) Direct materials used
(2)
Mfg. cost + WIP,beg = WIP, end + COGM P900,000 + .80X = X + P850,000 .20X = P50,000 X = P250,000 WIP, end
P900,000 (312,500) (225,000) P362,500
0
11
12
30.
(c) Predetermined overhead rate (120,000/P160,000)
75%
Work in process, May 31 (P580,000 – P501,800) Less: Conversion cost Direct labor : Job 123 P12,000 Job 456 12,800 Applied factory overhead: Job 123 (P12,000 x 75%) P 9,000 Job 456 9,600 Direct materials
31.
P78,200
P24,800 18,600
43,400 P34,800
(a) Direct materials Direct labor Applied factory overhead Total
Dept. ADept. B Total P25,000 P 5,000P 30,000 20,000* 30,000 50,000 40,000 15,000** 55,000 P85,000 P50,000 P135,000
P40,000/200% ** P30,000 x 50% 32.
(b) Balance of Work in Process , 4/30/08 Direct labor Applied factory overhead (P2,000 x 80%) Direct materials
33.
P 8,800 (2,000) (1,600) P 5,200
(b) Pre-determined overhead rate (P11,800 / P14,750)
80%
Let X = Direct labor Therefore 80X = Applied factory overhead Finished goods Less: Direct materials used (P15,500 – P3,200) Prime cost
P37,500 12,300 P25,200
X + .80X = P25,200 180X = P25,200 X = P14,000 Direct labor .80X = P11,200 Applied factory overhead.
12
13
34.
(c)
(1)
(2)
(3) 35.
Manufacturing cost WIP, Dec. 1: Direct materials (3,000 x P2.40) Direct labor (3,000 x P.80) Applied FO (48 hrs x P100) Total WIP, Dec. 31: DM (2,000 x P2.40) DL (2,000 x P.80) Applied FO (32 hrs. x P100) Cost of goods manufactured Finished goods, Dec. 1 Goods available for sale Finished goods, Dec. 31: DM DL Applied FO (P100 x 60 hrs) Cost of goods sold
P180,000 P30,000 60,000
90,000 P 90,000 P180,000
P7,200 2,400 4,800 P4,800 1,600 3,200
P5,000 3,000 6,000
14,400 194,400 9,600 P184,800 12,000 196,800
14,000 P182,800
(d) (1)
(2) 36.
Manufacturing cost Less: Direct labor Applied factory overhead (P100 x 600 hours) Direct materials used
Direct materials used Direct labor Applied FO: Molding Dept. (P2.70 x 2,000 hours) Decorating Dept. (35% x P12,000) Estimated cost to produce
P26,000 30,000 P5,400 4,200
9,600 P65,600
Bid Price (P65,600 x 145% ) P95,120
(b) WIP, beg. Current cost: DM DL AFO Total cost (1)
Job 115 P81,200
Job 116
Job 117
26,000 31,200 P138,400
P39,000 45,000 54,000 P138,000
P53,000 47,000 56,400 P156,400
Cost of goods manufactured:
Job 115 Job 116 Job 117 Total
Job 118 P47,000 16,000 19,200 P82,200
Total P139,000 134,000 160,800 P515,000
P128,400 138,000 156,400 P432,800
13
14
37.
38.
(2) (c)
WIP, Aug. 31 (Job 118)
P 82,200
(1)
P1,280,000 / P1,600,000 = 80%
(2)
WIP, end Direct Labor Applied FO (.80 x P100,000) Direct materials
P280,000 (100,000) ( 80,000) P100,000
(1)
s payable, March 31 Payment of s payable (for materials) s payable, March 1 Materials purchased
P 20,000 70,000 (12,000) P 78,000
(2)
This can be computed by working backward from cost of goods sold as follows:
(a)
Costs of goods sold P 600,000 Finished goods inventory, March 31 120,000 Finished goods inventory, March 1 (100,000) Cost of goods manufactured 620,000 Work in process, March 31 (P12,000+P24,000+P48,000) 84,000 Work in process, March 1 (60,000) Manufacturing cost 644,000 Applied factory overhead (200% x P160,000) (320,000) Direct labor (160,000) Direct materials used 164,000 Materials inventory, March 31 30,000 Purchases (1) (78,000) Materials inventory, March 1 P 116,000 39.
(d) (1)
Applied factory overhead (200% x P160,000) = Actual factory overhead Overapplied factory overhead
P320,000 300,000 P 20,000
(1)
Direct materials Direct labor Prime cost
P26,000 20,000 P46,000
(2)
Direct labor Applied factory overhead (150% x P20,000) Conversion costs
P20,000 30,000 P50,000
(2) 40.
(b)
14
15
41.
(c) Work in process, May 1 : Job 769 Job 772 Current cost: Direct materials Direct labor Applied factory overhead (150% x P20,000) Total cost of goods placed in process Less: Work in process, May 31 (Job 779): Direct materials Direct labor Applied factory overhead (150% x P1,800) Cost of goods manufactured Finished goods inventory, May 31 (job 776) Cost of goods sold at normal
42.
P9,000 2,900 P26,000 20,000 30,000 P2,800 1,800 2,700
76,000 87,900
7,300 P80,600 4,000 P76,600
(d) Work in process, beginning Current costs: Direct materials Direct labor Applied factory overhead (P30 x 2,000 hours) Total Manufacturing cost Work in process, end
43.
(a) P30,000 x 500%
44.
(b)
P 40,000 P98,000 50,000 60,000
Applied manufacturing overhead (50% of direct labor) Direct labor (P30,101.80 x 2) Conversion cost (50% of manufacturing cost) Thus, the cost of materials used equals Manufacturing costs Decrease in work in process inventory Cost of goods manufactured 45.
P11,900
(a) Direct materials used Direct labor Applied factory overhead : Job X (P5,000 x 200%*) Job Y (P4,000 x 200%*) Job Z (P2,500 x 200%*) Total manufacturing cost charged to Work in Process * P300,000 / P150,000 = 200%
208,000 248,000 210,000 P 38,000
P30,101.80 60,203.60 90,305.40 90,305.40 180,610.80 590.00 P181,200.80 P45,000 (cr) 11,500 (cr) P10,000 8,000 5,000
23,000 (cr) P79,500 (dr)
15
16
46.
(d) Direct materials used: Materials inventory, June 1 Purchases Available for use Materials inventory, June 30 Direct labor (19,800 hours x 5) Applied factory overhead (19,800 hours x P2.50) Manufacturing cost Work in process, June 1 Total Work in process, June 30 Cost of goods manufactured
47.
P 10,000 50,000 60,000 25,000
P 5,000 20,000 15,000
P 35,000 100,000 75,000 210,000 50,000 260,000
40,000 (1) P220,000 (2)
(a) Applied manufacturing overhead Divided by predetermined overhead rate based on direct labor cost Direct labor cost
49.
P115,200 99,000 49,500 263,700 (1) 21,420 285,120 48,420 P263,700 (2)
(a) Direct materials used: Materials inventory, 11/1 Purchases Available for use Materials inventory, 11/30 Direct labor (25,000 hours x P4) Applied factory overhead (25,000 hours x P3) Factory cost Work in process inventory, 11/1 Total Work in process inventory, 11/30: Direct materials Direct labor (5,000 x P4) Applied factory overhead (5,000 x P3) Cost of goods manufactured
48.
P 97,200 120,000 217,200 102,000
P3,600,000 200% P1,800,000
(a) Manufacturing cost Direct labor Applied factory overhead Direct material used
P 8,000,000 (1,800,000) (3,600,000) P 2,600,000
16
17
50.
(a) Manufacturing cost Work in process inventory, 1/1 Cost of goods manufactured Work in process inventory, 12/31
51.
(b), credit to Materials .
52.
(b)
P8,000,000 320,000 (7,920,000) P 400,000
Direct labor hours (P360,000/P15) Factory overhead head per hour Applied manufacturing overhead 53.
(a), debit to Finished Goods
54.
(a) Work in process, January 1 Manufacturing cost: Direct materials used Direct labor Applied factory overhead Total Cost of goods manufactured (debit to finished goods) Work in process, December 31
55.
24,000 hrs. x P20 P480,000
P P380,000 360,000 480,000
P 940,000 10,000 950,000 50,000 P 900,000
(b) Actual manufacturing overhead Applied manufacturing overhead Under-applied overhead
57.
1,220,000 1,240,000 940,000 P 300,000
(b) Cost of goods manufactured Finished goods, January 1 Goods available for sale Finished goods, December 31 Cost of goods sold before adjustment for over/under applied overhead
56.
20,000
P 540,000 480,000 P 60,000
(a) Sales Cost of goods sold at actual (P900,000 + P60,000) Gross profit Manufacturing expenses Operating income (loss)
P1,090,000 960,000 130,000 140,000 P( 10,000)
17
18
58.
(c) Sales Cost of goods sold Gross profit Manufacturing overhead Operating income
P1,09`0,000 943,200 146,800 140,000 P 6,800
Prorating of under-applied overhead: Work in process Finished goods Cost of goods sold Total 59. 0
60.
Amount P 300,000 50,000 900,000 P1,250,000
Ratio 24% 4% 72% 100%
(c) Materials inventory, January 1 Purchases (debit to materials) Direct materials requisitioned (debit to work in process) Materials, January 31
P30,000 70,000 (40,000) P60,000
(d) Direct labor hours Rate per hour Direct labor cost
61.
(b), credit to accrued payroll.
62.
(a)
11,000 xP6 P66,000
Direct labor hours Indirect cost rate Applied factory overhead cost 63.
Pro-ration P14,400 2,400 43,200 P60,000
11,000 x P4 P44,000
(d) Work in process, January 1 Manufactory cost: Direct materials used Direct labor Applied factory overhead Total Cost of goods sold (credit to finished goods) Work in process, January 31
P 2,000 P40,000 66,000 44,000
150,000 152,000 80,000 P 72,000
18
19
64.
(c) Finished goods, January 1 Cost of goods manufactured (credit to work in process) Cost goods sold Finished goods, January 31
65.
(a)
66,
(d), credit to finished goods .
67.
(d) Applied factory overhead Actual factory overhead Under-applied overhead
68.
P 20,000 80,000 (60,000) P 40,000
P 44,000 48,000 P 4,000
(c)
19
20
PROBLEMS Problem 1-1 a. Materials s payable
13,500
b. Work in process-direct material Materials
17,500
13,500 17,500
c. Factory overhead control-Indirect materials Materials d. Payroll
1,800 1,800 27,000
Accrued payroll
27,000
Labor cost distribution: Work in process-direct labor Factory overhead control-indirect labor Selling expense control-salaries istrative expense control-salaries Payroll
17,000 2,000 5,000 3,000 27,000
e. Factory overhead control-various Cash
2,508
f.
8,500
2,508
Factory overhead control-various s payable
8,500
g. Work in process-Factory overhead Factory overhead control
14,808
h. Finished goods Work in process
60,100
i.
s receivable Sales
75,000
Cost of goods sold Finished goods Finished goods, Jan. 1 Cost of production Finished goods, Jan 31 Cost of good sold
60,000
14,808 60,100 75,000 60,000 P15,000 60,100 (15,100) P60,000
20
21
Problem 1-2 a. Materials s payable
100,000 100,000
b. Work in process-direct material Factory overhead control-indirect material Materials
49,000 9,000 58,000
c. Payroll
88,000 Withholding tax payable (10%) SSS Payable (5%) Pag-ibig Payable Medicare payable Accrued payroll (net)
8,800 4,400 880 1,320 72,600
Work in process -direct material Factory overhead control Selling expenses General istrative expenses Payroll
60,000 12,000 6,000 10,000 88,000
Accrued payroll Cash
7
2,600 72,600
d. Factory overhead control (P4,800 + P960) Selling expenses General istrative expenses SSS payable Medicare payable ECC payable Pag-ibig payable Direct labor P60,000 5% 1.5% 1.5% 1%
Indirect labor P12,000
P 3,000 P 600 900 300 600 P 4,800 P960
180 60 120
Sales P6,000
5,160 480 800 4,400 1,320 440 880 Office Salary P10,000
P 300P 500 90 30 60 P 480P 800
P 4,400 150 50 100 P 7,040
e. Factory overhead control Cash f.
Work in process Applied factory overhead
Total P88,000 1,320 440 880
15,000 15,000 30,000 30,000
21
22
Problem 1-2, continued. g. Finished goods Work in process
120,000 120,000
h. s receivable Sales
52,000 52,000
Cost of goods sold Finished goods
40,000 40,000 Problem 1-3
a. Materials s payable b. Work in process Factory overhead control Materials
64,000 64,000 37,000
c. Payroll
5,600 42,600 100,000
Withholding tax payable (14%) SSS Payable (5%) Medicare payable (. 5%) Pag-ibig payable (. 5%) Accrued payroll Accrued payroll Cash
14,000 5,000 500 500 80,000 80,000 80,000
d. Work in process (P100,000 x 55%) Factory overhead control (P100,000 x 18%) Selling expenses (P100,000 x 17%) General istrative expenses (P100,000 x 10%) Payroll
55,000 18,000 17,000 10,000
e. Factory overhead control Selling expenses General istrative expenses SSS payable Medicare payable ECC payable Pag-ibig payable
5,100 1,190 700
100,000
5,000 1,000 500 500
22
23
Problem 1-3, continued: Direct labor P55,000 5% 1% ½% ½% f.
Indirect labor P18,000
P 2,750P 900P 550 275 275 P 3,850 P1,260
Sales P17,000
istrative P10,000
850P 500P 5,000 180 170 90 85 90 85 P 1,190P 700 P7,000
Work in process Factory overhead control
100 50 50
1,000 500 500
44,000 44,000
g. Factory overhead control Accumulated depreciation Prepaid insurance s payable
21,700 18,000 1,200 2,500
h. Finished goods Work in process
103,000
i.
s receivable Sales
168,750
Cost of goods sold (P168,750 / 135%) Finished goods
125,000
Cash
145,000
j.
Total P100,000
103,000 168,750 125,000
s receivable
145,000 Problem 1-4
1. a. b. c.
d.
Materials s payable Work in process Materials
200,000 200,000 180,000 180,000
Factory Payroll Withholding tax payable SSS contribution payable Phil, health contribution payable Pag-ibig contribution payable Accrued payable
120,000
Factory overhead control SSS contribution payable Phil. Health contribution payable
8,800
6,000 3,200 1,300 2,000 107,500 5,500 1,300
23
24
Pag-ibig contribution payable
2,000
Problem 1-4, continued: e.
f. g. h. i.
j.
2.
(1) (2) (3)
Work in process Factory overhead control Factory payroll
80,000 40,000 120,000
Factory overhead control s payable Work in process Applied factory overhead
67,500 67,500 96,000 96,000
Finished goods Work in process
320,000
Cash/s receivable Sales
480,000
Cost of goods sold Finished goods
320,000
320,000 480,000 320,000
Applied factory overhead Cost of goods sold Factory overhead control
96,000 20,300 116,300
Work in process, October 1 Factory cost: Direct materials Direct labor Applied factory overhead Total Cost of goods manufactured Work in process, October 31
Work in process Materials Work in process Factory payroll Work in process Applied factory overhead 1,920 hours x P50
P 15,000 P180,000 80,000 96,000
356,000 371,000 320,000 P 51,000
Problem 1-5 135,000 135,000 120,000 120,000 96,000 96,000
24
25
Problem 1-5, continued: (4)
Finished goods Work in process Work in process, beginning Factory cost: Direct materials Direct labor Applied factory overhead Total
288,000 288m000 Job 66 P 40,000
Job 67 P 15,000
Total P 55,000
35,000 45,000 36,000 P156,000
45,000 40,000 32,000 P132,000
80,000 85,000 68,000 P288,000
Problem 1-6 (1)
a. b.
Materials s payable
229,040
Payroll
220,000
229,040
Payroll payable c.
d.
e. f.
220,000
Work in process Factory overhead control Selling and istrative expenses Payroll Direct labor: Job 101 (5,000 hours x P8) Job 102 (8,000 hours x P10) Job 103 (6,000 hours x P6) Total
156,000
Work in process Factory overhead control Materials
216,350
P 40,000 80,000 36,000 P156,000
231,390
Finished goods Work in process
s receivable
220,000
15,040
Work in process Applied factory overhead
Work in process, Jan.1 Manufacturing cost: Direct materials Direct labor Applied overhead Total
24,000 40,000
85,500 85,500 380,700 380,700
Job 101 P 11,000
Job 102 P 4,000
Total P 15,000
103,200 40,000 22,500 P176,700
84,000 80,000 36,000 P204,000
187,200 120,000 58,500 P380,700
520,000
25
26
Sales
520,000
Problem 1-6, continued: g.
h.
i. j.
2.
Cash Sales discount s receivable
494,000 26,000 520,000
Marketing and istrative expenses Factory overhead control Cash
30,000 49.720 79,720
s payable Cash
170,000 170,000
Applied factory overhead Under-applied overhead Factory overhead control
85,500 3,260
Cost of goods sold Under-applied overhead
3,260
3,260 3,260
Joselyn Company Statement of Cost of Goods Sold Month Ended January 31, 2010 Direct materials used Direct labor Applied factory overhead Factory cost Work in process, January 1 Total cost of goods placed in process Work in process, January 31 (Job. 103) Cost of goods manufactured Finished goods, January 1 Goods available for sale Finished goods, January 31 Cost of goods at normal Under-applied overhead Cost of goods sold at actual
P216,350 156,000 85,500 457,850 15,000 472,850 92.150 380,700 65,000 445,700 65,000 380,700 3,260 P383,960
Problem 1-7 (1)
a. b.
Materials s payable Work in process Factory overhead control Materials
22,000 22,000 18,600 2,400 21,000
26
27
Problem 1-7, continued: c.
d. e.
Materials Factory overhead control Work in process (Job 622)
600
s payable Materials
800
200 400 800
Payroll
38,000 Payroll payable
f.
g.
h.
i.
j.
k.
Work in process Factory overhead control Selling expenses istrative expenses Payroll
38,000 20,900 7,600 5,700 3,800 38,000
Factory overhead control Accumulated depreciation Prepaid insurance s payable Work in process Applied factory overhead P20,900 x 80% Finished goods (P23,436 + P29.948) Work in process Job 621 Work in process, March 1 P6,580 Current costs: Direct materials 5,300 Direct labor 6,420 Applied FO 5,136 Total P23,436
9,404.50 2,000 250 7,154.50 16,720 16,720 53,384 53,384 Job 622 P8,260 7,000 8,160 6,528 P29,948
5,900 6,320 5,056 P21,506
s receivable Sales (P15,000 + P23,436) x 140%
53,810.40
Cost of goods sold Finished goods
38,436
Cash
40,000
53,810.40
38,436
s receivable 2.
Job 623 P4,230
Schedule of inventory, March 31: Materials inventory (balance of Materials )
40,000 P14,800
27
28
Finished goods (Job 622) Work in process (Job 623)
29,948 21,506 Problem 1-8
(1) Nancy Corporation Cost of goods sold statement Month Ended September 30, 2010 Direct materials used Direct labor Applied factory overhead Manufacturing cost Work in process inventory, Sept. 1 Total Work in process inventory, Sept.30 Cost of goods manufactured Finished goods inventory, Sept.1 Goods available for sale Finished goods inventory, Sept. 30 Cost of goods sold
P 29,800 18,600 27,450 75,850 4,070 79,920 4,440 75,480 9,800 85,280 9,250 P 76,030
(2) Nancy Corporation Income Statement Month Ended September 30, 2010 Net sales (P144,900 – P1,300) Cost of goods sold Gross profit Operating expenses: Marketing expenses Depreciation (P30 + P16 + P20 + 24) General istrative expenses Net income
P143,600 76,030 67,570 P 25,050 90 19,700
44,840 P 22,730
(3) Computation of over(under)applied factory overhead: Applied factory overhead Actual factory overhead: Overhead paid Indirect materials Depreciation- building Depreciation- machinery and equip Indirect labor Under-applied factory overhead
P27,450 P20,100 3,950 150 800 4,400
29,400 P( 1,950 )
28
29
Problem 1-9 (1)
Pena Manufacturing Company Statement of Cost of Goods Manufactured For the Year Ended December 31, 2010 Raw materials inventory beginning Purchases [(P52,000 ÷ 65%) x 2] Available for use Raw materials inventory, ending Direct materials used Direct labor Factory overhead Manufacturing cost Work in process inventory, ending Cost of goods manufactured
P 60,000 * 160,000 220,000 20,000 200,000 120,000 80,000 400,000 25,000 P375,000
*
Let X= Raw materials inventory, beginning 1/3X= Raw materials inventory, ending Therefore: X + P160,000 – 1/3X = P200,000 2/3X = P40,000 X = P60,000 (2)
Pena Manufacturing Company Income Statement For the Year Ended December 31, 2010 Sales (P300,000 ÷ 60%) Cost of goods sold: Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, ending Gross profit Operating expenses (squeeze) Selling expenses General expenses Net income before tax Provision of income tax Net income after tax
P500,000 P375,000 25,000 400,000 100,000 96,000 24,000
300,000 200,000 120,000 80,000 28,000 P 52,000
ing computations: Finished goods inventories: COGM + FG, beg – FG, end = COGS Let X = Finished goods inventory beginning 4X = Finished goods inventory ending Therefore: P375,000 + X – 4X = P300,000 -3X = -P375,000
29
30
X = P25,000 finished goods, beginning 4X = P100,000 finished goods ending
Problem 1-9, continued: Operating expenses: SE + GE = OE Let X = GE 4X = SE Therefore: 4X + X = 120,000 5X = 120,000 X = 24,000 GE 4X = 96,000 SE Problem 1-10 Journal Entries (a) Materials s payable
18,400
(b) Factory overhead control s payable
53,060
18,400 53,060
(c) Payroll
172,000 Accrued payroll
172,000
Work in process- direct labor Factory overhead control Selling expenses istrative expenses Payroll
121,000 25,000 16,000 10,000
Accrued payroll (P4,500 + P172,000) Cash
176,500
172,000 176,500
(d) Work in process- direct materials Factory overhead control Materials (e) Work in process Factory overhead control
115,000 16,600 131,600 94,660 94,660
(f) Finished goods Work in process
376,000
(g) s receivable Sales (P19,000 + P376,000 – P24,000) x 130%
482,300
Cost of goods sold Finished goods P19,000 + P376,000 – P24,000= P371,000
376,000 482,300 371,000 371,000
30
31
Problem 1-10, continued: (h) Cash (P425,800 x 98%) Sales discount (P425,840 x 2%) s receivable
417,323 8,517 425,840
(i) Selling expenses (P60,000 x 60%) General istrative expense (P60,000 x 40%) s payable (j) s payable Cash
36,000 24,000 60,000 208,000 208,000
Problem 1-11 (1)
Cost of goods sold statement: Materials inventory, June 1 Purchases Materials available for sale Less: Materials inventory, June 30 Indirect materials used Direct materials used Direct labor [(P49,000 ÷ 7) × 6] Factory overhead: General factory overhead Depreciation Indirect materials Insurance Indirect labor (P49,000 ÷ 7) Manufacturing cost Work in process inventory, June 1 Total Work in process inventory, June 30 Cost of goods manufactured Finished good inventory, June 1 Goods available for sale Finished goods inventory, June 30 Cost of goods sold
(2)
P15,000 33,000 P48,000 P19,000 1,000
P13,000 17,000 1,000 2,000 7,000
20,000 28,000 42,000
40,000 110,000 40,000 150,000 30,000 120,000 70,000 190,000 50,000 P140,000
Summary journal entries: (a) (b)
Materials s payable
33,000
Work in process-Direct materials Factory overhead control Materials
28,000 1,000
33,000
29,000
31
32
Problem 1-11, continued: (c )
Payroll
49,000 Accrued payroll
(d)
(e) (f)
49,000
Work in process-direct labor Factory overhead control Payroll
42,000 7,000
Finished goods Work in process
120,000
s receivable Sales (P140,000 × 150%)
210,000
Cost of goods sold Finished goods
140,000
Problem 1-12 Computation of Costs: 1. Direct materials used Direct labor Applied factory overhead (P1,300,000 x 160%) Manufacturing cost
49,000 120,000 210,000 140,000
P 710,000 1,300,000 2,080,000 P4,090,000
2. Supplies Indirect labor Depreciation of building and factory equip. Miscellaneous Total actual factory overhead
P 100,000 900,000 400,000 550,000 P1,950,000
3. Raw materials inventory, Jan. 1, 2010 Purchases Available for use Raw materials used Raw materials inventory Less indirect materials used (supplies) Raw materials inventory, Dec. 31,2010
P 100,000 800,000 900,000 ( 710,000 ) 190,000 100,000 P 90,000
4. Manufacturing cost (1) Work in process, Jan. 1, 2010 Cost of goods manufactured Work in process, Dec. 31,2010
P4,090,000 60,000 ( 4,120,000 ) P 30,000
5. Applied factory overhead (1) Applied factory overhead (2) Overapplied factory overhead
P2,080,000 1,950,000 P 130,000
6. Cost of goods sold at normal
P4,020,000
32
33
Overapplied factory overhead (5) Cost of goods sold at actual
( 130,000) P3,890,000 Problem 1-13
(1) JMG Company Balance Sheet December 31, 2009 Assets Cash (Schedule 1) s receivable Finished goods inventory [P12,000 – (1/3 x P12,000)] Work in process inventory [P4,000 – (50% x P4,000)] Materials inventory [P8,000 – (50% x P8,000)] Prepaid expenses Property, plant, and equipment (P60,000 – P8,000) Total Liabilities and Stockholders’ Equity Current liabilities Stockholders’ equity: Capital stock Retained earnings Total
P 38,000 20,000 8,000 2,000 4,000 1,000 52,000 P125,000 P 35,000 P60,000 30,000
90,000 P125,000
ing Computations: Schedule 1 Cash balance, Jan 1, 2009 Collection of s receivable (a) Total Payments: Payroll (b) Factory overhead (c ) Marketing expenses (d) istrative expenses (e) Payment of materials purchases (Per COGS) Cash balance, Dec. 31, 2009
P 10,000 120,000 130,000 P18,000 16,000 12,000 16,000 30,000
92,000 P 38,000
(a) s receivable, Jan. 1, 2009 Sales on s receivable, Dec. 31, 2009 (required balance) Collections
P 20,000 120,000 ( 20,000 ) P120,000
(b) Current liabilities, Jan. 1, 2009 Direct labor cost (accrued payroll) Current liabilities, Dec. 31, 2009 (required balance) Payment of current liabilities
P 35,000 18,000 ( 35,000 ) P 18,000
33
34
Problem 1-13, continued: (c) Actual factory overhead (P18,000 + P4000) Less depreciation (P8,000 x ¾) Payment
P 22,000 6,000 P 16,000
(d) Marketing expenses paid (P120,000 x 10%)
P 12,000
(e) istrative expenses (P120,000 x 15%) Less depreciation (P8,000 x ¼) Payment
P 18,000 2,000 P 16,000
(2) JMG Company Income Statement Year Ended December 31, 2009 Sales Cost of goods sold at actual (Sch. 2) Gross profit Operating expenses: Marketing expenses istrative expenses Net income
P120,000 80,000 40,000 P12,000 18,000
30,000 P 10,000
Schedule 2- Statement of Cost of Goods Sold Direct materials used: Inventory, Jan. 1 Purchases (squeeze) Inventory, Dec. 31 Direct labor Applied factory overhead Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold at normal Under-applied factory overhead Cost of goods sold at actual
P 8,000 30,000 ( 4,000 )
P 34,000 18,000 18,000 70,000 4,000 74,000 2,000 72,000 12,000 84,000 8,000 76,000 4,000 P 80,000
34
35
Problem 1-14 1.
Cost of Jobs: Direct materials used Direct labor Applied factory overhead Total factory cost
Job 234 P 32,500 35,000 35,000 P102,500
Job 567 P 59,000 30,000 30,000 P119,000
2: (a) Purchases of materials Materials requisitioned Materials returned to storeroom Materials balance
P100,000 (94,000) 2,500 P 8,500
(b) Materials requisitioned Direct labor Applied factory overhead Materials returned for Job 2,500 Completed job 234 Work in process, end
P 94,000 65,000 65,000 (2,500) (102,500) P119,000
(c) Cost of goods sold (Job 234)
P102,500 Problem 1-15
1.
Journal entries b. c.
d.
Materials s payable Work in process Factory overhead control Materials
720,000 720,000 560,000 40,000 600,000
Factory payroll Withholding tax payable SSS contributions payable Phil. Health contributions payable Pag-ibig contributions payable Payroll payable
680,000
Payroll payable Cash
634,100
Work in process Factory overhead control Factory payroll
34,000 7,500 2,400 2,000 634,100 634,100
620,000 60,000 680,000
35
36
Problem 1-15, continued: e.
f. g. h. i.
Factory overhead control SSS Contributions payable Phil. Health contributions payable Pag-ibig contributions payable
14,600
Factory overhead control Accumulated depreciation
60,000
2.
60,000
Factory overhead control s payable Work in process Applied factory overhead Finished goods Work in process Work in process, June 1 Current costs: Direct materials Direct labor Applied FO Total costs
j.
10,200 2,400 2,000
340,000 340,000 620,000 620,000 1,200,000 1,200,000 Job 40 P 20,000
Job 41 P 60,000
100,000 200,000 200,000 P520,000
220,000 200,000 200,000 P680,000
s receivable Sales
900,000
Cost of goods sold Finished goods
520,000
900,000 520,000
Work in Process, June 30, 2010 (Job 42): Direct materials Direct labor Applied factory overhead Work in process, June 30
P240,000 220,000 220,000 P680,000
Or: Balance, June 1 (c) (d) (h) Balance, June 30
Work in process P 80,000 P1,200,000 560,000 620,000 620,000 1,880,000 1,200,000 P680,000
(i)
36
37
Problem 1-16 Jenna Company Statement of Cost of Goods Sold Year Ended December 31, 2010 Direct materials used: Raw materials inventory, Jan 1 Net purchases (P400,000 – P4,200) Available for use Raw materials inventory, Dec. 31 Direct labor Factory overhead: Factory maintenance Factory power and heat Insurance Depreciation Factory superintendence Indirect labor Factory supplies Manufacturing cost Work in process, Jan. 1 Cost of goods placed in process Work in process, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec.31 Cost of goods sold
P395,800 395,800 24,000 P38,400 19,400 4,800 17,500 100,000 20,000 22,400
P371,800 180,000
222,500 774,300 84,000 858,300 30,000 828,300 37,500 865,800 40,000 P825,800
Problem 1-17 Jenny Incorporated Statement of Cost of Goods Manufactured and Sold Month Ended May 31, 2010 Direct materials used: Inventory, April 30, 19x8 Purchases (P510,000 + P15,000) Available for use Inventory, May 31, 19x8 Direct labor Factory overhead Indirect labor Property tax Insurance (60%) Depreciation Utilities Factory cost Work in process inventory, April 30, 19x8 Cost of goods placed in process
P28,000 525,000 553,000 23,000 P
90,000 60,000 12,000 50,000 108,000
P 530,000 260,000
320,000 1,110,000 150,000 1,260,000
37
38
Work in process inventory, May 31, 19x8 Cost of goods manufactured
130,000 P1,130,000
Problem 1 – 18
1.
Journal Entries: (a) (b) (c) (d)
(e)
(f) (g)
Materials s payable
136,000
Factory payroll Payroll payable
180,000
Manufacturing overhead control s payable
158,500
180,000 158,500
Work in process Manufacturing overhead control Materials
105,500
Work in process Manufacturing overhead control Factory payroll
156,000
Work in process Applied factory overhead
195,000
15,500 121,000 24,000 180,000
Finished goods Work in process Work in process, May 1 Current costs: Direct materials Direct labor Applied FO Total costs
(h)
136,000
195,000 394,400 394,400
Job 809 P 11,500
Job 811 P 13,900
Job 812 P -
14,000 64,000 80,000 P169,500
24,000 32,000 40,000 P109,900
34,000 24,000 45,000 P115,000
Cash
412,500 Sales
Cost of goods sold Finished goods Job 809 Job 810 Job 811 Total (i)
Operating expenses Cash
412,500 308,200 308,200 P169,500 28,800 109,900 P308,200 74,500 74,500
38
39
Problem 1-18, continued: 2.
Noynoy Manufacturing Corporation Statement of Cost of Goods Manufactured Month Ended May 31, 2010 Direct materials used: Materials inventory, May 1 Purchases Available for use Less: Materials inventory, May 31(Sq) P60,500 Indirect materials used 15,500 Direct labor Applied factory overhead Factory cost Work in process inventory, May 1 Total cost of goods placed in process Work in process inventory, May 31 (Job 813) Cost of goods manufactured
3.
P105,500 156,000 195,000 456,500 25,400 481,900 87,500 P394,400
P412,500 P 28,800 394,400 423,200 115,000
308,200 104,300 74,500 P 29,800
Schedule of Inventory balances, May 31, 2010: Materials inventory Work in process inventory (Job 813): Direct materials Direct labor Applied factory overhead Finished goods inventory (Job 812): Direct materials Direct labor Applied factory overhead
5.
76,000
Noynoy Manufacturing Corporation Income Statement Month Ended May 31, 2010 Sales Cost of goods sold: Finished goods inventory, May 1 Cost of goods manufactured Goods available for sale Finished goods inventory, May 31, (Job 812) Gross profit Operating expenses Net profit
4.
P 45,500 136,000 181,500
P 60,500 P33,500 24,000 30,000
87,500
P34,000 36,000 45,000
115,000
P193,700, this is not reported in the financial statements.
39
40
Problem 1-19 (1)
Materials Control balance, April 30: Materials Control balance, April 1 Raw materials purchased during April Direct materials used Indirect materials used Materials Control balance, April 30 Work in Process balance, April 30: Work in process, April 1: Job 202 Job 203 Job 204 Put into process during April: Direct materials Direct labor Applied factory overhead (P16/hr) Total cost of goods placed in process Finished goods: Job 202 Job 204 Job 205 Job 207 Work in process, April 30{ Job 203 Job 206
P 2,750 11,500 ( 9,705) ( 2,790) P 1,755
P4,700 3,280 4,160
P12,140
P 9,705 9,500 7,600
26,805 P38,945
P9,550 6,930 6,280 5,870
28,630
P6,535 3,780
P10,315
ing Computations: Work in process, April 1 Current costs: Direct materials Direct labor Applied FO (P16/DLH) Total cost
(2)
Job 202 P4,700
Job 203 P3,280
Job 204 P4,160
Job 205 P -
Job 206 P -
Job 207 P -
1,250 2,000 1,600 P9,550
555 1,500 1,200 P6,535
970 1,000 800 P6,930
2,500 2,100 1,680 P6,280
1,980 1,000 800 P3,780
2,450 1,900 1,520 P5,870
Work in process (Job 202) Materials control Payroll Applied factory overhead
4,850
Finished goods (Job 202) Work in process
9,550
s receivable Sales (P9,550 x 150%) Cost of goods sold Finished goods
1,250 2,000 1,600 9,550 14,325 14,325 9,550 9,550 40
41
(3)
(4)
(5)
Direct materials used Direct labor Applied factory overhead Factory cost Work in process, April 1 Work in process, April 30 Cost of goods manufactured
P 9,705 9,500 7,600 26,805 12,140 (10,315) P28,630
Applied factory overhead Actual factory overhead: Depreciation Indirect labor Factory rent and utilities Indirect materials used Under-applied overhead
P 7,600 P1,375 2,500 2,700 2,790
Sales (P24,280 * x 150%) Cost of goods sold : Finished goods, April 1 (Job 201) Cost of goods manufactured Finished goods, April 30 (Jobs 204 & 207) Cost of goods sold at normal Under-applied overhead Gross profit * Job 201 Job 202 Job 205 Total
9,365 P(1,765) P36,420
P 8,450 28,630 (12,800) 24,280 1,765
26,045 P10,375
P 8,450 9,550 6,280 P24,280 Problem 1-20
(1) Work in process, March 1 Cost added this month: Direct materials Direct labor Applied factory overhead Total cost
(2)
Job 204 P50,460
Job 205 P118,060
Job 206 P124,101
Job 207 P -
9,480 26,844 7,717.65 P94,501.65
11,320 22,750 7,475 P159,605
10,490 28,920 8,314.50 P171,825.50
22,440 20,370 6,693 P 49,503
Applied factory overhead Actual factory overhead Under-applied factory overhead this month Over-applied factory overhead, March 1 Over-applied factory overhead remaining in FO control
P 30,200.15 40,941.87 10,741.72 (dr) 12,300.00 (cr) P 1,558.28 (cr)
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Problem 1-20, Continued: (3)
Work in process, March 31: Job 205 Job 206 Job 207 Total
(4)
P159,605.00 171,825.50 49,503.00 P380,933.50
Cost of goods manufactured: Work in process, March 1 Cost added this month: Direct material Direct labor Applied factory overhead Total costs Work in process, March 31 (3) Cost of goods manufactured (Job 204)
P292,621.00 P53,730.00 98,884.00 30,200.15
182,814.15 475,435.15 380,933.50 P 94,501.65
Problem 1-21 Tanny Company Statement of Cost of Goods Manufactured and Sold Year Ended December 31, 2010 Direct materials used: Materials inventory, Jan. 1 Purchases (1) Available for use Materials inventory, Dec. 31 Materials used Indirect materials (squeeze) Direct labor (5) Applied factory overhead (6) Factory cost Work in process, Jan. 1 Total cost of goods placed in process Work in process, Dec. 31 (4) Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 (3) Cost of goods sold at normal Over-applied factory overhead (7) Cost of goods sold at actual (2)
P 15,000 100,000 115,000 23,000 92,000 12,000
P 80,000 100,000 150,000 330,000 20,000 350,000 30,000 320,000 80,000 400,000 37,000 363,000 (3,000) P360,000
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Problem 1-21, continued: (1)
s payable, Dec. 31 Payment of s payable s payable, Jan. 1 Purchases of materials
P 5,000 102,000 (7,000) P100,000
(2)
s receivable, Dec. 31 Collections of s receivable s receivable, Jan. 1 Sales Cost ratio Cost of goods sold at actual
P 65,000 480,000 (45,000) P500,000 72% P360,000
(3)
Cost of goods sold at actual Over-applied factory overhead Cost of goods at normal Goods available for sale Finished goods inventory, Dec. 31
P360,000 3,000 363,000 400,000 P 37,000
(4)
Materials Direct labor Applied factory overhead (150% x P8,000) Work in process inventory, Dec. 31
P 10,000 8,000 12,000 P 30,000
(5)
Cost of goods manufactured Work in process inventory, Dec. 31 Work in process inventory, Jan. 1 Factory cost Direct materials used Conversion cost Direct labor cost (x) Applied factory overhead (150%x)
P320,000 30,000 (20,000) 330,000 (80,000) 250,000 100,000 P150,000
(6)
Applied factory overhead Actual factory overhead: Indirect materials used Indirect labor : Accrued payroll, 12/31 Payment Accrued payroll, 1/1 Payroll Direct labor Indirect labor Misc. factory overhead Over-applied factory overhead
P150,000 P 12,000 P 14,000 172,000 ( 11,000) 175,000 (100,000) P 75,000 P 60,000
147,000 P 3,000
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Problem 1-22 1.
Direct materials (P396,000 – P12,000) Direct labor Applied factory overhead (P50 x 2,800 DL hours) Total cost of Project No. 27
P 384,000 248,000 140,000 P 772,000
2.
Sales Cost of goods sold Gross profit Selling and istrative expenses Net profit
P1,400,000 772,000 628,000 140,000 P 488,000 Problem 1-23
1.
s payable, May 31 Payment of s payable s payable, May 1 Purchases of materials
P 12,000 78,000 ( 10,000) P 80,000
2.
Cost of goods sold Finished goods inventory, May 31 Finished goods inventory, May Cost of goods completed during May
P165,000 7,000 (25,000) P147,000
3.
Machine hours Predetermined overhead rate (P750,000 / 15,000 hours) Applied factory overhead
1,000 hours P50 P 50,000
4.
Direct materials Direct labor Applied factory overhead (P50 x 30 machine hours) Work in process, May 31
P 2,000 1,000 1,500 P 4,500
5.
Cost of goods manufactured Work in process, May 31 Work in process, May 1 Factory cost Direct labor (940 DL hours x P25) Applied factory overhead Direct materials used
P147,000 4,500 (2,000) 149,500 (23,500) (50,000) P 76,000
6.
Direct materials used Direct materials control, May 31 Materials purchased Direct materials control, May 1
P 66,000 20,000 (80,000) P 6,000
7.
Applied factory overhead Actual factory overhead
P 50,000 55,000
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Under-applied factory overhead
P (5,000)
Problem 1-24
Schedule of Cost of Goods Sold Materials inventory, July 1 Purchases Available for use Less: Materials inventory, July 31 Indirect materials used Direct materials used Direct labor Factory overhead Factory cost Work in process inventory, July 1 Total Work in process inventory, July 31 Cost of goods manufactured Finished goods inventory, July 1 Goods available for sale Finished goods inventory, July 31 Cost of goods sold
P 20,000 65,000 85,000 P15,000 20,000
35,000 50,000 200,000 100,000 350,000 7,000 357,000 11,000 346,000 34,000 380,000 30,000 P350,000
Computations: 1. 2. 3. 4. 5.
P50,000 P200,000 P100,000 P346,000 P350,000
6. s payable, July 1 Materials purchases s payable, July 31 Payments of s payable
P 18,000 65,000 ( 6,000 ) P 77,000
7. s receivable, July 1 Sales on s receivable, July 31 Collections of s receivable
P 54,000 500,000 ( 22,000 ) P532,000
8. Accrued payroll, July 1 Payroll for July Accrued payroll, July 31 Payment of payroll
P 13,000 255,000 ( 9,000 ) P259,000
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