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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

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)

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
P1,660,000

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 )
P549,000

(1)

(2)

(3)

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
21,370
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)

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 supervisors 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)

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)

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

22.

(c)
Materials used
Direct labor
Applied factory overhead (P290,000 x 39%)
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

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 1,832,500

Per unit (P755,500 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

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 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.

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)

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

P1,090,000
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.

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

60.

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 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


Materials
d. Payroll

1,800
1,800
27,000

Accrued payroll

27,000

Labor cost distribution:


Work in process-direct labor
Factory overhead control
Selling expense
Administrative expense
Payroll

17,000
2,000
5,000
3,000
27,000

e. Factory overhead control


Cash

2,508

f.

8,500

2,508

Factory overhead control


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
Factory overhead control
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
Factory overhead control
Selling expenses
General administrative expenses
Payroll

60,000
12,000
6,000
10,000
88,000

Accrued payroll
Cash

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 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. Accounts receivable
Sales

52,000
52,000

Cost of goods sold


Finished goods

40,000
40,000
Problem 1-3

a. Materials
Accounts 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 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:


Direct labor
P55,000
5%
1%
%
%
f.

Indirect labor
P18,000

P 2,750P 900P
550
275
275
P 3,850 P1,260

Sales
P17,000

Administrative
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
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
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


Accounts payable
Work in process
Applied factory overhead

67,500
67,500
96,000
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

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
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

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

Accounts 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
Accounts receivable

494,000
26,000
520,000

Marketing and administrative expenses


Factory overhead control
Cash

30,000
49.720
79,720

Accounts 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
Accounts 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

Accounts 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
Administrative expenses
Payroll

38,000
20,900
7,600
5,700
3,800
38,000

Factory overhead control


Accumulated depreciation
Prepaid insurance
Accounts 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

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.

Job 623
P4,230

Schedule of inventory, March 31:


Materials inventory (balance of Materials account)

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 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

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
Accounts payable

18,400

(b) Factory overhead control


Accounts 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
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
(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) 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

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)
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 )
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 )
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
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


Accounts 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

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

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
Accounts payable

136,000

Factory payroll
Payroll payable

180,000

Manufacturing overhead control


Accounts 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 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

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)

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 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. 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. Accounts receivable, July 1


Sales on account
Accounts receivable, July 31
Collections of accounts 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