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 administrative 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.
23.
(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
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
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
45. 32
89,760
P (2,760)
(1)
(2)
(b)
Applied factory overhead (P70,000 + P112,000)
Actual factory overhead
Over-applied factory overhead
P182,000
180,000
P 2,000
(1)
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
P710,000
512,600
197,400
100,900
P 96,500
(2)
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
(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
6,000
60,000
8,000
40,000
P114,000
(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)
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.
75%
P78,200
P24,800
18,600
43,400
P34,800
(a)
Direct materials
Direct labor
Applied factory overhead
Total
Dept. A
P25,000
20,000 *
40,000
P85,000
Dept. B
P 5,000
30,000
15,000**
P50,000
Total
P 30,000
50,000
55,000
P135,000
• P40,000/200%
** P30,000 x 50%
32.
(b)
Balance of Work in Process account, 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.
P180,000
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
P7,200
2,400
4,800
P4,800
1,600
3,200
P5,000
3,000
6,000
90,000
P 90,000
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
P30,000
Applied factory overhead (P100 x 600 hours)
60,000
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
Job 115
P81,200
Job 116
26,000
31,200
P138,400
P39,000
45,000
54,000
P138,000
(1)
Cost of goods manufactured:
(2)
WIP, Aug. 31 (Job 118)
Job 115
Job 116
Job 117
Total
Job 117
P53,000
47,000
56,400
P156,400
Job 118
Total
P47,000
16,000
19,200
P82,200
P139,000
134,000
160,800
P515,000
P128,400
138,000
156,400
P432,800
P 82,200
13
14
37.
38.
(c)
(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)
Accounts payable, March 31
Payment of accounts payable (for materials)
Accounts 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 account.
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 account
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
P40,000
66,000
44,000
2,000
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 account.
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
Accounts 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
Administrative 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
Accounts payable
8,500
g. Work in process-Factory overhead
Factory overhead control
14,808
h. Finished goods
Work in process
60,100
i.
Accounts 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
Accounts 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 Premium Payable (5%)
Pag-ibig premium Payable
Medicare premium payable
Accrued payroll (net)
8,800
4,400
880
1,320
72,600
Work in process -direct material
Factory overhead control
Selling expenses
General administrative 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 administrative expenses
SSS premium payable
Medicare premium payable
ECC premium payable
Pag-ibig premium payable
Direct labor
P60,000
5%
1.5%
1.5%
1%
Indirect labor
P12,000
P 3,000
900
300
600
P 4,800
P
600
180
60
120
P960
Sales
P6,000
P 300
90
30
60
P 480
5,160
480
800
4,400
1,320
440
880
Office Salary
P10,000
P
500
150
50
100
P 800
e. Factory overhead control
Cash
15,000
f.
30,000
Work in process
Applied factory overhead
Total
P88,000
P 4,400
1,320
440
880
P 7,040
15,000
30,000
21
22
Problem 1-2, continued.
g. Finished goods
Work in process
120,000
120,000
h. Accounts receivable
Sales
52,000
52,000
Cost of goods sold
Finished goods
40,000
40,000
Problem 1-3
a. Materials
Accounts payable
64,000
b. Work in process
Factory overhead control
Materials
37,000
5,600
c. Payroll
64,000
42,600
100,000
Withholding tax payable (14%)
SSS Premium Payable (5%)
Medicare premium payable (. 5%)
Pag-ibig premium 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 administrative expenses (P100,000 x 10%)
Payroll
55,000
18,000
17,000
10,000
e. Factory overhead control
Selling expenses
General administrative expenses
SSS premium payable
Medicare premium payable
ECC premium payable
Pag-ibig premium payable
5,100
1,190
700
100,000
5,000
1,000
500
500
22
23
Problem 1-3, continued:
5%
1%
½%
½%
f.
Direct labor
P55,000
Indirect labor
Sales
P18,000
P17,000
P 2,750
550
275
275
P 3,850
P
900
180
90
90
P1,260
P
850
170
85
85
P 1,190
Work in process
Factory overhead control
Administrative
P10,000
P
P
500
100
50
50
700
P
5,000
1,000
500
500
P7,000
44,000
44,000
g. Factory overhead control
Accumulated depreciation
Prepaid insurance
Accounts payable
21,700
18,000
1,200
2,500
h. Finished goods
Work in process
103,000
i.
Accounts 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
Accounts receivable
145,000
Problem 1-4
1. a.
b.
c.
d.
Materials
Accounts payable
200,000
Work in process
Materials
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
Pag-ibig contribution payable
8,800
200,000
180,000
6,000
3,200
1,300
2,000
107,500
5,500
1,300
2,000
23
24
Problem 1-4, continued:
e.
f.
g.
h.
i.
j.
2.
Work in process
Factory overhead control
Factory payroll
80,000
40,000
Factory overhead control
Accounts payable
67,500
Work in process
Applied factory overhead
96,000
120,000
67,500
96,000
Finished goods
Work in process
320,000
Cash/accounts 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
P 15,000
P180,000
80,000
96,000
356,000
371,000
320,000
P 51,000
Problem 1-5
(1)
(2)
(3)
Work in process
Materials
135,000
Work in process
Factory payroll
120,000
Work in process
Applied factory overhead
1,920 hours x P50
135,000
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
Accounts payable
229,040
Payroll
220,000
229,040
Payroll payable
c.
d.
e.
f.
220,000
Work in process
Factory overhead control
Selling and administrative 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
24,000
40,000
Work in process
Factory overhead control
Materials
216,350
15,040
Finished goods
Work in process
Accounts receivable
Sales
P 40,000
80,000
36,000
P156,000
231,390
Work in process
Applied factory overhead
Work in process, Jan.1
Manufacturing cost:
Direct materials
Direct labor
Applied overhead
Total
220,000
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
520,000
25
26
Problem 1-6, continued:
g.
h.
i.
j.
2.
Cash
Sales discount
Accounts receivable
494,000
26,000
520,000
Marketing and administrative expenses
Factory overhead control
Cash
Accounts payable
Cash
30,000
49.720
79,720
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
Accounts payable
22,000
Work in process
Factory overhead control
Materials
18,600
2,400
22,000
21,000
26
27
Problem 1-7, continued:
c.
d.
e.
Materials
Factory overhead control
Work in process (Job 622)
600
Accounts payable
Materials
800
Payroll
200
400
800
38,000
Payroll payable
f.
g.
h.
i.
j.
k.
Work in process
Factory overhead control
Selling expenses
Administrative expenses
Payroll
Factory overhead control
Accumulated depreciation
Prepaid insurance
Accounts payable
38,000
20,900
7,600
5,700
3,800
38,000
9,404.50
2,000
250
7,154.50
Work in process
Applied factory overhead
P20,900 x 80%
16,720
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
53,384
16,720
7,000
8,160
6,528
P29,948
5,900
6,320
5,056
P21,506
Accounts 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
Accounts receivable
2.
53,384
Job 623
P4,230
Job 622
P8,260
Schedule of inventory, March 31:
Materials inventory (balance of Materials account)
Finished goods (Job 622)
Work in process (Job 623)
40,000
P14,800
29,948
21,506
27
28
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 administrative 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
Supporting 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
X = P25,000 finished goods, beginning
4X = P100,000 finished goods ending
29
30
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
Accounts payable
18,400
(b) Factory overhead control
Accounts payable
53,060
(c) Payroll
18,400
53,060
172,000
Accrued payroll
172,000
Work in process- direct labor
Factory overhead control
Selling expenses
Administrative 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
115,000
16,600
(e) Work in process
Factory overhead control
94,660
131,600
94,660
(f) Finished goods
Work in process
376,000
(g) Accounts 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%)
Accounts receivable
417,323
8,517
425,840
(i) Selling expenses (P60,000 x 60%)
General administrative expense (P60,000 x 40%)
Accounts payable
(j) Accounts 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
Accounts 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
Accounts 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
Overapplied factory overhead (5)
Cost of goods sold at actual
P4,020,000
( 130,000)
P3,890,000
32
33
Problem 1-13
(1) JMG Company
Balance Sheet
December 31, 2009
Assets
Cash (Schedule 1)
Accounts 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
Supporting Computations:
Schedule 1
Cash balance, Jan 1, 2009
Collection of accounts receivable (a)
Total
Payments:
Payroll (b)
Factory overhead (c )
Marketing expenses (d)
Administrative 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) Accounts receivable, Jan. 1, 2009
Sales on account
Accounts 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) Administrative 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
Administrative 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 account 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
Accounts payable
720,000
Work in process
Factory overhead control
Materials
560,000
40,000
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
620,000
60,000
720,000
600,000
34,000
7,500
2,400
2,000
634,100
634,100
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
Accounts payable
340,000
Work in process
Applied factory overhead
620,000
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
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
Accounts 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
Work in process inventory, May 31, 19x8
Cost of goods manufactured
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
130,000
P1,130,000
37
38
Problem 1 – 18
1.
Journal Entries:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Materials
Accounts payable
136,000
Factory payroll
Payroll payable
180,000
Manufacturing overhead control
Accounts payable
158,500
Work in process
Manufacturing overhead control
Materials
105,500
15,500
Work in process
Manufacturing overhead control
Factory payroll
156,000
24,000
Work in process
Applied factory overhead
195,000
Finished goods
Work in process
394,400
Work in process, May 1
Current costs:
Direct materials
Direct labor
Applied FO
Total costs
(h)
136,000
180,000
158,500
121,000
180,000
195,000
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 account 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 account 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
Supporting 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
Accounts receivable
Sales (P9,550 x 150%)
Cost of goods sold
Finished goods
(3)
Direct materials used
1,250
2,000
1,600
9,550
14,325
14,325
9,550
9,550
P 9,705
40
41
(4)
(5)
Direct labor
Applied factory overhead
Factory cost
Work in process, April 1
Work in process, April 30
Cost of goods manufactured
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)
Problem 1-20, Continued:
41
42
(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
Problem 1-21, continued:
42
43
(1)
Accounts payable, Dec. 31
Payment of accounts payable
Accounts payable, Jan. 1
Purchases of materials
P 5,000
102,000
(7,000)
P100,000
(2)
Accounts receivable, Dec. 31
Collections of accounts receivable
Accounts 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 administrative expenses
Net profit
P1,400,000
772,000
628,000
140,000
P 488,000
Problem 1-23
1.
Accounts payable, May 31
Payment of accounts payable
Accounts 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
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
Under-applied factory overhead
P 50,000
55,000
P (5,000)
2,000
1,000
1,500
P 4,500
44
45
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. Accounts payable, July 1
Materials purchases
Accounts payable, July 31
Payments of accounts payable
P 18,000
65,000
( 6,000 )
P 77,000
7.
P 54,000
500,000
( 22,000 )
P532,000
Accounts receivable, July 1
Sales on account
Accounts receivable, July 31
Collections of accounts receivable
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