Assignment 1 (To be submitted on March 9, 2023)
Empire Manufacturing Company submitted the following summary of transactions
for its first year of operation.
a. Raw materials purchased, P1,350,000
b. Factory payroll
- Indirect labor, P150,000
- Direct labor, P1,500,000
c. Material requisition for the period
- Indirect materials, P190,000
- Direct materials, P1,200,000
d. Overhead is applied to production at 75% of direct labor costs .Budgeted
overhead for the year amounted to P1,200,000 while actual overhead
amounted to P1,150,000. - It is a normal costing
Factory overhead rate= (1,200,000/ 1,125,000 (1.5M x 75%)= 1.07)
Applied factory overhead= 1,150,000 x 1.07= 1,230,500
Actual overhead= 1,150,000
Overapplied- Actual < Applied
Difference= 1,150,000- 1,230,500= 80,500
If the figures is given, no need to compute the applied.
e. Good completed for period equal to 80% of goods put into process.
f. 75% of total production was sold at 40% mark-up on cost.
g. Close overhead variance to cost of sales
Factory overhead rate= (1,200,000/ 1,125,000 (1.5M x 75%)= 1.07)
Applied factory overhead= 1,150,000 x 1.07= 1,230,500
Actual overhead= 1,150,000
Overapplied- Actual < Applied
Difference= 1,150,000- 1,230,500= 80,500
Required: Journal entries following the flow of cost
Assignment 2 (To be submitted on March 14, 2023)
Maigan Manufacturing Company has the following account balances at the
beginning of the current year:
Raw materials inventory
Work in process inventory
Finished goods
P50,000
150,000
120,000
Below is the summary of transactions for the month of January:
a. Purchased of raw materials: on account, P200,000; Cash P80,000
b. Issuance of raw materials to the production department, P180,000 of which
10% is indirect materials.
c. Company payroll for the month: Factory payroll consisted of P120,000 for
direct labor and P25,000 for indirect labor; Marketing and administrative
payroll amounts to P40,000 and P80,000 respectively. (Use Marketing
Expense control and Administrative expense control for marketing and
administrative expenses)
d. The following were accrued at the end of the month: (a) Electricity costs,
P22,000; (b) Rent, P10,000 and (c) Taxes and permits, P5,000. Of the given
expenses, 50% is allocated to factory, 20% to marketing and 30% to
administrative.
e. Depreciation for the month: Factory plant and equipment, P7,500; Office
furniture and equipment, P7,500
f. Expired insurance, P10,000, allocated in the same manner as in no. 4.
g. Overhead is applied to production.
h. At the end of the month, unfinished jobs totaled P75,000 and unsold finished
goods amounted to P90,000.
i. Maigan Manufacturing Company uses the actual cost system in
accumulating cost and perpetual inventory system in accounting for its
inventory. The company’s mark up on cost is maintained at 40% for the past
two (2) years all on a 30 days term.
Required:
1. Determined the following:
1.1 Raw materials inventory on January 31
1.2 Direct materials charged to the job
1.3 Total prime cost for the period
1.4 Amount of overhead charged to the job
1.5 Cost of goods manufactured
1.6 Cost of goods sold
1.7 Selling price of the goods sold
1.8 Total administrative and marketing costs
1.9 Net income for the period
2. Journal entries
3. Post to selected accounts
4. Prepare a Statement of Cost of Goods Manufactured and Sold