Cost Accounting Chapter 2 - Costs – Concepts and classification Problem 1 1. Direct 2. Indirect 3. Direct 4. Direct 5. Direct
6. Direct 7. Direct 8. Indirect 9. Direct 10.Direct
Problem 2 1. Manufacturing 2. Selling 3. Manufacturing 4. Selling 5. Administrative
Problem 3 1. Variable 2. Variable 3. Fixed 4. Variable 5. Fixed 6. Fixed 7. Fixed 8. Variable 9. Fixed 10.Fixed
Product Product Product Product Product Period Period Period Product Period
Direct Direct Indirect Direct Indirect Indirect Indirect Direct Indirect Indirect
Problem 4 – Bug Company 1. Fixed Period 2. Fixed Inventoriable 3. Variable Inventoriable 4. Variable Inventoriable 5. Fixed Inventoriable
6. Variable 7. Variable 8. Fixed 9. Fixed 10. Fixed
Period Inventoriable Inventoriable Period Inventoriable
Problem 5 – Rounin Manufacturing Company 1. Direct materials Direct labor Prime cost 2.
Direct labor FO (10,000 + 9,000 +25000) Conversion costs
3.
Direct materials Direct labor Factory overhead Product costs
Problem 6 – Mother Goose Company 1. Prime costs 2. Conversion cost
6. Manufacturing 7. Administrative 8. Selling 9. Administrative 10.Selling
50,000 60,000 110,000 60,000 44,000 104,000 50,000 60,000 44,000 154,000 -
430,000 525,000
3 Inventoriable cost 4. Total period costs Problem 7 – Blanche Corporation ` 1. Direct materials used Direct labor Variable manufacturing overhead Variable marketing Total variable cost per unit X No. of units produced and sold Total variable costs per month
-
710,000 305,000 P 30.00 20.00 15.00 3.00 68.00 20,000 P 1,360,000
2. Fixed manufacturing overhead Fixed marketing costs Total fixed cost per unit X No. of units produced and sold Total fixed costs per month
Page 2 – Chapter 2 Prblem 8 1. Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing cost per unit `
2. Total variable manufacturing cost per unit Variable marketing and administrative Total variable costs per unit
P 10.00 4.00 14.00 20,000 P 280,000
P 60.00 30.00 9.00 P 99.00 P 99.00 6.00 105.00
3. Total variable manufacturing cost per unit P 99,00 Fixed manufacturing overhead (30,000/1,200) 25.00 Full manufacturing cost per unit 124.00 4. Full manufacturing cost per unit Variable marketing and administrative Fixed marketing and administrative Full cost to make and sell per unit Problem 9 - Chiz Manufacturing Company 1. Materials put into production Direct labor Prime costs
124.00 6.00 20.00 150.00 P 90,000 95,000 P 185,000
2. Direct labor Factory overhead Indirect materials Indirect labor Other overhead cost Total conversion costs
95.000 60,000 25,000 60,000
3. Direct materials Direct labor Factory overhead Total product costs
145,000 240,000 90,000 95,000 145,000 330,000
4. none Problem 10 – Johnson Corporation 1. Variable cost per machine hour = 35,600 – 20,000 4,000 - 2,000 = 7.50 per machine hour 2. Total electricity expense Less: Variable costs ( 4,000 x 7.50) ( 2000 x 7.50) Fixed cost 3.
4,000 hours 35,000
2000 hours 20,000
30,000 ______ 5,000
Fixed cost Variable cost ( 6,000 x 7.50) Totl manufacturing costs
15,000 5,000 5,000 45,000 50,000
Problem 11 – Valdez Motors Co. 1. Variable cost per machine hour = 5,475 – 3,975 210 - 145 = 23.08 per machine hour 2. Total overhead costs Less: Variable costs ( 210 x 23.08) ( 145 x 23.08) Fixed cost Page 3 Problem 12 – Justine Company
210 hours 5,475 4,847 _____ 628
145 hours 3,975 3,347 628
1
Variable cost per hour = 4,470 – 2,820 520 - 300 = 7.50 per hour
2.
520 hours Total Less: Variable cost 520 x 7.50 300 x 7.50 Fixed cost
3.
Total cost = P 570 + P7,50 X
4.
Fixed cost Variable ( 420 hrs. x P 7.50) Total maintenance cost
4,470 3,900 _____ 570
P
300 hours 2,820 2,250 570
570 3,150 P 3,720
True/False Questions 1. False 6. True 2. False 7. False 3. True 8. True 4. False 9. False 5. False 10. True
11. False 12. False 13. True 14. False 15. False
16. True 17. False 18. True 19. False 20. True
Multiple choice – Theory 1. B 6. A 2. C 7. D 3. B 8. D 4. C 9. B 5. D 10. C
11. C 12. A 13. C 14. B 15. B
16. B 17. B 18. A 19. D 20. B
Multiple choice – Problems 1. A 6. A 2. B 7. C 3. C 8. C 4. C 9. A 5. B 10. C
11. A 12. B 13. B 14. C 15. B
16. A 17. B 18. D 19. A 20. A
CHAPTER 3 - COST ACCOUNTING CYCLE Problem 1 - Ram Manufacturing Company
Direct materials used (75,000 x 90%) 67,500.00 Direct labor (97,000 x 93% ) 90,210.00 Factory overhead (90,210 x 12%) Total manufacturing costs Work in process, January 1 Cost of goods put into process 295,972.50 Less: Work in process, January 31 Cost of goods manufactured 268,972.50 Problem 2 - Donna Company Direct materials used Materials, May 1 Purchases Total available Less> Mat.- May 31 97,000 Direct labor Factory overhead Total manufacturing costs Work in process, May 1 Cost of goods put into process 322,800 Less: Work in process, May 31 Cost of goods manufactured 304,800 Finished goods – May 1 Total goods available for sale 349,800 Less: Finished goods – May 31 Cost of goods sold
112,762.50 270,472.50 25,500.00 27,000.00
22,000 100,000 122,000 25,000 80,000 120,000 297,000 25,800 18,000 45,000 24,000 325,800
Problem 3 – Blanche Corporation 1, Income Statement Sales 1,200,000 Less: Cost of goods sold 751,000 Gross profit 449,000 Less: Operating expenses Marketing 60,000 Administrative 12,000 72,000
Net income
Blanche Corporation 2. Direct materials used Materials, March 1 Purchases Total available Less> Mat.- March 31 408,000 Direct labor Factory overhead Total manufacturing costs Work in process, March 1 Cost of goods put into process 858,000 Less: Work in process, March 31 Cost of goods manufactured 763,000 Finished goods – March 1 Total goods available for sale 853,000 Less: Finished goods – March 31 Cost of goods sold Problem 4 - Roy Company 1, Entries a. Materials Accounts payable b. Payroll Withholding taxes payable SSS Premiums payable Phil Health contributions payable Pag-ibig funds contributions payable 1,620 Accrued payroll Work in process
377,000
50,000 400,000 450,000 42,000 210,000 140,000 758,000 100,000 95,000 90,000 102,000 751,000
120,000 120,000 54,000 11,200 2,400 375 38,405 45,000
Factory overhead control Payroll
9,000
54,000 c. Materials Accounts payable
25,000 25,000
d. Factory overhead control SSS premiums payable Phil Health contributions payable Pag-ibig funds contributions payable
5,595 3,600 375 1.620
e. Work in process Factory overhead control Materials
75,000
f. Accounts payable Materials
1,000
Page 2 – Chapter 3 g. Accounts payable Accrued payroll Cash
14,000 89,000 1,000 136,500 38,405 174,905
h. Factory overhead control Miscellaneous accounts i. Work in process Factory OH Applied (45,000 x 120%)
16,900 16,900 54,000 54,000
j. Finished goods Work in process
116.000 116,000
k. Accounts receivable Sales
150,000 150,000
Cost of goods sold Finished goods 2. Statement of cost of goods sold . Direct materials used Purchases Less: Purchase returns Total available for use Less> Mat.- October 31 89,000
90,000 90,000
145,000 1,000 144,000 55,000
Direct labor Factory overhead Total manufacturing costs Less: Work in process, October 31 Cost of goods manufactured 116,000 Less: Finished goods – March 31 Cost of goods sold, normal Less: OA-FO Cost of goods sold, actual Problem 5 – Darvin Company 1. Entries a. Materials Accounts payable
45,000 54,000 188,000 72,000 26,000 90,000 8,505 81,495 200,000 200,000
b. FOControl Accounts payable c. Payroll W/Taxes payable SSS Premium payable
35,000 35,000 210,000 18,520
8,400 Phil Health contributions payable PFC payable Accrued payroll
1,125 6,300 175,655
Page 4 Work in process Factory Overhead control Selling expense control Adm. expense control Payroll 210,000
140,000
d. Accrued payroll Cash
175,000 175,000
e. FO Control Selling expense control Adm. Expense control SSS prem. Payable MC payable PFC payable
30,000 25,000 15,000
14,200 2,375 1,350 10,500 1,125 6,300
f. Work in process FO Control Materials
185,000 35,000
g. Work in process FO Control
114,200
h. Finished goods Work in process
410,000
220,000 114,200 410,000
i. Accounts receivable Sales
539,000 539,000
Costs of goods sold Finished goods 385,000
385,000
j. Cash Accounts receivable
405,000 405,000
k. Accounts payable Cash
Page 5 2. Cost of goods sold statement Direct materials used Materials, January 1 Purchases Total available Less> Mat.- Jan. 31 Ind. Materials 185,000 Direct labor Factory overhead Total manufacturing costs
220,000 220,000
50,000 200,000 250,000 30,000 35,000 65,000 140,000 114,200 439,200
Work in process, January 1 Cost of goods put into process 457,200 Less: Work in process, January 31 Cost of goods manufactured 410,000 Finished goods – January 1 Total goods available for sale 445,000 Less: Finished goods – January 31 Cost of goods sold 3. Income Statement Sales Less: Cost of goods sold Gross profit Less: Operating expenses Selling Administrative 43,725 Net income 4 Balance sheet Cash 25,000 Accounts receivable 8,655 Finished goods 18,520 Work in process 18,900 Materials 2,250
18,000 47,200 35,000 60,000 385,000 539,000 385,000 154,000 27,375 16,350 110,275
110,000
Accounts payable
194,000
Accrued payroll 60,000
W/tax payable
47,200
SSS Prem. payable
30,000
Medicare Cont. payable PFC payable Common stock
12,600
200,000 _______ 441,200
Total
Retained earnings
155,275
441,200 Problem 6 1. Cost of goods manufactured Work in process, December 31 Cost of goods put into process Total manufacturing costs Work in process, January 1
800,000 87,000 887,000 ( 790,000) 97,000
Page 6 2. Cost of goods manufactured Finished goods, January 1 Total goods available for sale Cost of goods sold Finished goods, December 31 4.
Direct materials used Materials, December 31 Total available for sale Materials, January 1 Materials purchased
800,000 80,000 880,000 (750,000) 130,000 590,000 150,000 740,000 (100,000) 640,000
Problem 7 – Kyle Manufacturing Company 1. Direct materials used ( 300.000 x 75%) 225,000 Direct labor (350,000 x 60%) 210.000 Factory overhead – actual Indirect materials (300,000 x 25%) 75,000 Indirect labor (350,000 x 40%) 140,000 Heat, light, and water 120,000 Depreciation 75,000 Property taxes 65,000 Repairs and maintenance 40,000 515,000 Total manufacturing costs/cost of goods manufactured 950,000 2, 3. 4. 5
Unit cost = 950,000/125,000 = P7.60 per unit Prime cost = 225000 + 210,000 = P 435,000 Conversion cost = 210,000 + 515,000 = P 725,000 Period cost = 80,000 + 50,000 = P 130,000
Problem 8 - Norman Company 1, Materials, October 1 Purchases Materials, October 31 Direct materials used Direct labor Factory overhead (80,000 = 12,500 x 8.00) 6,40 Total manufacturing costs 2.
Total manufacturing costs Work in process, Oct. 1
48,000 112,000 (40,000) 120,000 80,000 100,000 300,000 300,000 24,000
3.
Work in process, Oct. 31 Cost of goods manufactured
( 16,000) 308,000
Cost of goods manufactured Finished goods, Oct. 1 Finished goods, Oct. 31 Cost of goods sold
308,000 72,000 ( 80,000) 300,000
Page 7 4. Sales Cost of goods sold Marketing and administrative expenses Net income
400,000 ( 300,000) ( 40,000) 60,000
Problem 9 – Janice Company 1, Sales (50,000/10%) Selling & administrative expenses Net income Cost of goods sold
500,000 ( 50,000) ( 50,000) 400,000
2.
Cost of goods sold Finished goods, March 31 Finished goods, March 1 Cost of goods manufactured
400,000 180,000 ( 120,000) 460,000
3.
Cost of goods manufactured Work in process, March 31 Work in process, March 1 Total manufacturing costs Factory overhead Direct labor (126,000/75%) Direct materials used 176,000 Materials, March 31 Purchases Materials, March 1
460.000 100,000 ( 90,000) 470,000 (126,000) (168,000) 20,000 (100,000) 96,000
Problem 10 - Selina Corporation 1. Cost of goods manufactured Work in process, December 31 Cost of goods put into process Cost of goods manufactured + WP, end = TMC + WP, beg 1700,000 + X = 1,800,000 + .80X X - .80X = 1,800,000 – 1,700,000
1,700,000 500,000 2,200,000
X
= =
2.
WP, Dec. 31 = 500,000
3.
Total manufacturing cost Factory overhead ( (1,800,000 x 25% ) Direct labor (450,000/72%) Direct materials used
100,00/.20 500,000 1,800,000 ( 450,000) ( 625,000) 725,000
Problem 11 - Kyra Alexis Corporation 1. Materials put into process Materials, Aug. 31 Materials, Aug. 1 Materials purchased Page 8 2. Materials put into process Direct labor ( 70,000 + 80,000) Factory overhead - A (70,000 x 120%) B ( 80,000 x 80%) Total manufacturing cost
120,000 75,000 ( 60,000) 135,000 120,000 150,000 84,000 64,000
148,000 418,000
3.
Total manufacturing cost Work in process, Aug. 1 Work in process, Aug. 31 Cost of goods manufactured
418,000 80,000 ( 64,000) 434,000
4.
Cost of goods manufactured Finished goods, Aug. 1 Finished goods, Aug. 31 Cost of goods sold
434,000 54,000 ( 60,000) 428,000
Multiple choice 1. 2. 3. 4. 5. 6.
A C B A D B
11. 12. 13. 14. 15. 16.
B C B C C D
7. D 8 C 9. B 10.B
17. 18. 19 20.
B B B B
21. B 22. D 23. A 24. B 25. 116,000 26. A (No. 5 should be 73% 27. D 28. A 29. A 30. B
Chapter 4 True or False 1. False 2. True 3. True 4. False 5. True
6. True 7. False 8. False 9. True 10.False
11. False 12. False 13. False 14. False 15. False
Matching 1. a 2. h 3. p 4. d 5. k
6. 7. 8. 9. 10.
Multiple choice – Theory 1, d 6. d 2. b 7. a 3. b 8. c 4. d 9. b 5. d 10. c
11. 12. 13. 14. 15.
16.True 17. False 18. False 19. True 20. True
21. True 22. False 23. False 24. False 25. True
16. 17. 18 19. 20.
21. 22. 23. 24. 25.
b g k, l, m i n d d c b c
a c b b b
c b a c b
Problem 1 – Garcia Company 1 Journal entries 1. Materials Accounts payable 2.
3. 4. 5.
Work in process Factory overhead control Materials Materials Work in process FO Control Accounts payable Materials
28,000 28,000 22,000 3.000 25,000 800 500 300 1,000 1,000
Payroll 39,000 Withholding taxes payable 3,025 SSS Premiums payable 1,600 Phil Health contributions payable 375 Pag-ibig funds contributions payable 1,200 Accrued payroll 32,800
Page 2 Accrued payroll Cash
32,800
Work in process Factory overhead control Payroll
33,400 5,600
Factory Overhead Control SSS Premiums payable Phil Health cont. payable Pag-ibig cont. payable
3,575
FO Control Accum Depr. Prepaid ins. Accounts payable
15,000
9.
Work in process FO Applied
26,720 26,720
10.
Finished goods WP Job 401 Job 402
72,220 72,220
6.
7.
8
11.
12.
32,800
39,000 2,000 375 1,200 3,000 950 11,050
31,720 40,500
Accounts receivable Sales (31,720 x 140%)
44,408 44,408
Cost of goods sold FG
31,720 31,720
Cash
35,000 35,000
Accounts receivable Direct materials 3,000 5,500 8,500 Direct materials 5,600 7,000
Job 401 Direct labor 2,500 10,400 12,900
Factory overhead 2,000 8,320 10,320
Job 402 Direct labor 3,000 12,500
Factory overhead 2,400 10,000
12,600
15,500
12,400
Page 3 Direct materials 9,500 ( 500) 3.
Job 403 Direct labor 10,500
Factory overhead 8,400
Cost of goods sold statement Direct materials used Materials, August 1 Purchases Less. Purchase returns Total available for use Less: Materials, Aug. 31 Ind. Materials Direct labor Factory overhead Total manufacturing costs Work in process, Aug. 1 Cost of goods put into process Less: Work in process, Aug. 31
22,000 28,000 1,000 24,800 2,700
27,000 49,000 27,500
Cost of goods manufactured Finished goods, Aug. 1 Total goods available for sale Less: Finished goods, Aug. 31 Cost of goods sold - normal Add. Under applied factory overhead Cost of goods sold Problem 2 - Golden Shower Company 2. Journal entries a. Materials Accounts payable````` X 20,000 x 5.20 = 104,000 Y 24,000 x 3.75 = 90,000 Ind. Materials 35,040 b. Payroll Withholding taxes payable SSS premiums payable Phil Health cont. payable Pag-ibig funds cont. payable Accrued payroll
21,500 33,400 26.720 81,620 18,500 100.120 27,900 72,220 25,000 97,220 65,500 31,720 155 31,875
229,040 229,040
220,000 31,000 7,000 440 6,600 174,960
Accrued payroll Cash Page 4otal
174,960 174,960
c. Work in process Factory overhead control Marketing & Adm. Exp. Control Payroll
156,000 24,000 40,000 220,000
Factory overhead control Marketing & adm. Exp. Control SSS Premiums payable Phil Health contr. Payable Pag-ibig funds contribution payable SSS (5%) FOC (180,000) 9,000 M & A Exp.control 2,000 11,000
Phil Health (0,.25%) 360 80 440
14,760 3,280 11,000 440 6,600 Pag-ibig ( 3% ) 5,400 1,200 6,600
d. Work in process Factory overhead control Materials Job 101 (x) 4,000 x 5.00 (x) 16,000 x 5.20 Job 103 ( x) 2,000 x 5.20 (Y) 5,000 x 3.75
20,000 83,200 103,200
Cost of goods sold
14,760 3,280 18.040
216,350 15,040 231,390 Job 102 (Y) 8,000 x 3.00 (Y) 16,000 x 3.75
24,000 60,000 84,000
10,400 18,750 29,150
e. Work in process FO Applied Job 101 = 10,000 x 2.25 102 = 16,000 x 2.25 103 = 12,000 x 2.25 f. Accounts receivable Sales
Total
85,500 85,500 22,500 36,000 27,000 510,000 510,000 380,700
Work in process
380,700
Page 5 g. Cash Sales discount Accounts receivable
494,000 26,000 520,000
h. Marketing & Adm. Exp. Control Factory overhead control Cash Accum. Depreciation
30,000 25,600 51,600 4,000
i. Accounts payable Cash j.
170,000 170,000
Factory overhead applied Cost of goods sold FO Control
85,500 6,100 79,400
DIRECT MATERIALS 5,000 103,200 108,200
JOB 101 DIRECT LABOR 4,000 44,000 44,000
FACTORY OVERHEAD 2,000 22,500 24,500
DIRECT MATERIALS 1,200 84,000 85,200
JOB 102 DIRECT LABOR 2,000 80,000 82,000
FACTORY OVERHEAD 800 36,000 36,800
DIRECT MATERIALS 21,.950
JOB 103 DIRECT LABOR 36,000
FACTORY OVERHEAD 27,000
STOCKCARDS MATERIAL X ISSUED
RECEIVED 20,000 @ 5.20
BALANCE 4,000 @ 5.00 20,000 4,000 @ 5.00 20,000 20,000 @ 5/20 104,000
104,000 4,000 @ 5.00 18,000 @ 5.20
20,000 93,000
2,000 @ 5.20
10,400
MATERIAL Y ISSUED
RECEIVED 24,000 @ 3.75
BALANCE 8,000 @ 3.00 24,000 8,000 @ 3.00 24,000 24,000 @ 3.75 90,000
90,000 8,000 @ 3.00 21,000 @ 3.75
24,000 78,750
3,000 @ 3.75
Problem 3 - J.A.N., Inc. 1. Direct material Direct labor (300 x 8) Factory OH (200 x 15) Total mfg. cost
4,300 2,400 3,000 9,700
2. Direct material Direct labor Prime cost
4,300 2,400 6,700
3. Direct material Factory overhead applied Conversion cost
2,400 3,000 5,400
Problem 4 – 1. Materials – Dept. 1 Dept. 2
2.400 1,300 3,700
3. Dept. 1 (500 x 4.00) Dept. 2 (320 x 1.00)
4,100 1,760 5,860
4. Contract price Less: Cost to manufacture DM. 3,700 DL 5,860 FO 2.320 Gross profit
2. Dept. 1 (500 x 8.20) Dept. 2 (220 x 8.00)
5. Gross profit Less: M & A Net income
13,120 2,970 10,150
Problem 5 - Star Wars Corporation Requirement No. 1 1. Work in process Materials 2.
Work in process
50,000 50,000 150,000
11,250
2,000 320 2,320 P 25,000
11,880 13,120
Payroll
150,000
Page 7 3. Work in process FO Applied
90.000 90,000
4.
Finished goods Work in process
290,000 290,000
5.
Accounts receivable Sales
427,917 427,917
Cost of goods sold Finished goods
290,000 290,000
Selling price Direct materials Direct labor Factory OH Total cost Gross profit
Job 110 126,667 15,000 50,000 30,000 95,000 31,667
Job 220 170,000 10,000 50,000 30,000 90,000 80,000
Job 330 131,250 25,000 50,000 30,000 105,000 26,250
Total 427,917 50,000 150,000 90,000 290,000 137,917
Problem 6 – Ellen Corporation MATERIALS__________ WORK IN PROCESS_______ Beg. 60,000 5) 125,000 Bal. beg. 85,000 2) 820,000 6) 145,000 Bal. end 80,000 5) DM 125,000 205,000 205,000 4) DL 400,000 3) OH 320,000 Bal.end 110,000 930,000 930,000 FINISHED GOODS______ Bal. beg. 120,000 1) 850,000 2) 820,000 Bal. end 90,000 940,000 940,000 7)
FACTORY OH CONROL____ 330,000
Entries 1. Materials Accounts payable
1)
COST OF GOODS SOLD_____ 850,000
FACTORY OH APPLIED _____ 3) 320,000
145000 145,000
2.
Work in process Materials
125,000 125,000
Page 8 3. Work in process Payroll
400,000 400,000
4.
Work in process FO Applied
320,000 320,000
5.
Finished goods Work in process
820,000 820,000
6.
Cost of goods sold Finished goods
850,000 850,000
FO Control Various accounts Problem 7 - Ellen Joyce Company 1. Work in process Materials
330,000 330,000
2.
Work in process Payroll
156,000 156,000
3.
Work in process FO Applied
118,500 118,500
4.
Finished goods Work in process Job 201 Job 202 Job 203 Total Accounts receivable Sales
343,000 343,000
7.
5.
Cost of goods sold Finished goods Cost of goods sold statement Direct materials Direct labor Factory overhead Total manufacturing costs Less: Work in process, end
-
98,500 98,500
190,000 94,000 59,000 343,000 350,000 350.000 284,000 284,000 98,500 156,000 118,500 373,000 30,000
Cost of goods manufactured Less: Finished goods, end Cost of goods sold Page 8 = Abner Corporation 1. Direct materials used Materials – end Materials – beg. Direct materials purchased
343,000 59,000 284,000 205,000 90,000 ( 95,000) 200,000
2.
Total manufacturing costs Factory overhead Materials used Direct labor costs
675,000 ( 175,000) ( 205,000) 295,000
3.
Cost of goods available for sale Finished goods, end Cost of goods sold
775,000 (110,000) 665,000
4.
Sales Cost of goods sold Gross profit Problem 9 - Pacific Production Company 1. Materials - April 1 Purchases Materials – April 30 Direct materials used Indirect materials used
900,000 (665,000) 235,000
2.
Accrued payroll – April 30 Payroll paid Direct labor cost Indirect labor
6,000 44,000 ( 32,000) 18,000
3.
Direct labor cost Factory overhead rate Factory overhead applied
32,000 125%40,000
4.
Direct materials Direct labor Factory overhead Total manufacturing costs Work in process, beg. Work in process, end Cost of goods manufactured
78,000 32,000 40,000 150,000 82,000 ( 94,000) 138,000
5.
Cost of goods manufactured
138,000
64,000 84,000 ( 60,000) ( 78,000) 10,000
Finished goods, April 1 Finished goods, April 30 Cost of goods sold Page 10 Problem 11 – Table and Chair Manufacturing Company 1) Materials Accounts payable
296,000 (304,000) 130,000
2)
Work in process FOC Materials
11,480 40
Payroll Accrued payroll
5,445
Work in process FOC Payroll
4,645 800
FOC
2,875
3)
4)
15,000 15,000
11,520 5,445
5,445
Rent Expense Payable Accum. Depreciation – Machines Accum. Depreciation – Factory Building Utilities Expense Payable Payroll Taxes Payable 5)
Work in process FO Applied
6)
Finished goods Work in process Direct materials Direct labor Factory overhead Total
7)
Cash
1,500 160 490 225 300 5,261.25 5,261.25
Job 101 10,500 3,175 3,618.75 17,293.75
Job 102 980 1,470 1,642.50 4,092.50
21,386.25 21,385.25 Total 11,480 4,645 5,261.25 21,386.25 25,000
Sales Cost of Goods Sold Finished goods
25,000 17,293.75 17,293.75
Accounts receivable Sales
4,000
Cost of goods sold
4,092.50
4,000
Finished goods
4,092.50
Page 11 Problem 11 – Candy Corporation 1)
Job 101 Job 102 WP, July 1
2)
Job 101 Job 102 Job 103 Total
3)
P 175,000 120,000 P 295,000 80,000 x 125% 95,000 x 125% 115,000 x 125%
= P 100,000 = 118,750 = 143,750 362,500
Job 101 175,000
Job 102 120,000
Total 295,000
55,000 80,000 100,000 410,000`
80,000 95,000 118,750 413,750
135,000 175,000 218,750 823,750
Job 101 Add: Underapplied factory overhead Actual FO 375,000 Less: Applied FO 362,500 Cost of goods sold – actual
410,000
5)
FG, Inventory July 31 (Job 102)
413,750
6)
WP, Inventory, July 31 ( Job 103) Materials Labor Factory overhead Total WP Inventory, July 31
92,000 115,000 143,750 350,750
WP, beg. Cost added Materials Labor Overhead Total 4)
Problem 12 – MLT Company 1) Materials, June 1 Purchases Materials, June 30 Indirect materials Direct materials used 2)
Cost of goods manufactured Work in process, June 30
12,500 422,500`
15,000 33,000 ( 19,000) ( 1,000) 28,000 120,000 30,000
3)
Work in process, June 1 Total manufacturing cost
( 40,000) 110,000
Cost of goods available for sale Total manufacturing costs Finished goods, June 1
190,000 (110,000) 80,000
Problem 13 – Miracle Company (start with No.. 3 then No. 2) 1) Cost of goods manufactured 168,000 WP, January 31 95,000 WP, January 1 ( 80,000) Total manufacturing cost 183,000 Direct labor (63,000 / 75%) ( 84,000) Factory overhead ( 63,000) Direct materials used 36,000 Materials January 31 50,000 Indirect materials used 1,000 Purchases ( 46,000) Materials, January 1 41,000 2)
Cost of goods sold – normal Finished goods, January 31 Finished goods, January 1 Cost of goods manufactured
150,000 78,000 ( 60,000) 168,000
3)
Sales ( 25,000 / 12.5%) Selling and administrative expenses Net income Cost of goods sold, actual Overapplied FO Actual 62,800 Less: Applied 63,000 Cost of goods sold, normal
200,000 ( 25,000) (25,200) 149,800 200 150,000
Problem 14 – Nona Company 1)
Units sold Finished goods, end Finished goods, beg Units completed/manufactured
2)
Direct materials used Direct labor Factory overhead Total mfg. cost/cost of goods manufactured Divide by units completed
12,300 300 ( 100) 12,500 1,847,700 2,125,800 1,026,500 5,000,000 12,500
Cost of goods manufactured per unit
400/unit
Page 13 3) From Finished goods, beg. (100 units x P 430 ) From units completed during the period ( 12,200 x P 400) Cost of goods sold Or Finished goods, beg. Cost of goods manufactured Finished goods, end ( 300 x P400) Cost of goods sold
43,000 4,880,000 4,923,000 43,000 5,000,000 ( 120,000) 4,923,000
MULTIPLE CHOICE – PROBLEMS 1. A 11. OH IS APPLIED AT 125% OF DLCOST - B 2. A 12, A 21. C 3. C 13. C 22. C 4. D 14. D 23. C 5. A 15. A 24. B 6. B 16. D 25. 46,000 7. B 17. C 26. D 8. A 18. C 27. B 9. A 19. D 28. B 10. B 20. C 29. D 30. B CHAPTER 5 - JUST IN TIME AND BACKFLUSH ACCOUNTING TRUE/FALSE 1. True 2. True 3. False 4. True 5. True
6. True 7. True 8. True 9. True 10. False
Problem 1 - AJE Corporation 1) Raw and In Process Accounts Payable
16,000
2)
Cost of goods sold Accrued payroll FO Applied
32,000
Finished goods Raw and In Process
13,500
3)
16,000 15,000 17,000 13,500
Raw and In Process Cost of goods sold 4)
1,000 1,000
Cost of goods sold Finished goods
12,700 12700
Finished goods Cost of goods sold
1,700 1,700
Problem 2 – Magnolia Corporation CORRECTION: Direct labor cost P 350,000; Factor overhead – P380,000 1) Raw and In Process 444,000 Accounts payable 444,000 2)
Finished goods Raw and In process Purchases Mat. In RIP beg (23,400-2,400) Mat. In RIP end (25,600-3,600) Mat. Content of FG
443,000 443,000 444,000 21,000 ( 22,000) 443,000
Cost of goods sold Accrued payroll FO Applied Page 2 3) Cost of goods sold Finished goods Mat. Content of FG Mat. In FG beg. (24,000-8,000) Mat. In FG end (19,000-7,000) Mat. Content of units sold 4)
447,000 447,000 443,000 16,000 ( 12,000) 447,000
Raw and In Process Cost of goods sold Conversion cost in RIP end Conversion cost in RIP beg Adjustment
5)
730,000 350,000 380,000
Cost of goods sold Finished goods
1,200 1,200 3,600 ( 2,400) 1,200 1,000 1,000
Conversion cost in FG end Conversion cost in FG beg Adjustment
7,000 (8,000) (1,000)
Problem 3 – Pocahontas Manufacturing Company 1. Materials purchased Materials in RIP beg (11,000 – 1,200) Materials in RIP end (12,400 – 1,700) Materials backflushed from RIP to FG
346,000 9,800 ( 10,700) 345,100
2.
Materials backflushed from RIP to FG Materials in FG beg ( 12,000 – 4,000) Materials in FG end ( 9,800 - 3,100) Materials backflushed from FG to CofGS
345,100 8,000 ( 6,700) 346,400
3)
a) Raw and In process Accounts payable
346,000 346,000
b) Cost of goods sold Accrued payroll FO Applied
250,000 100,000 150,000
c) Finished goods Raw and In Process
345,100 345,100
d) Cost of goods sold Finished goods
346,400 346,400
Page 3 e) Raw and In Process Cost of goods sold Finished goods End Beginning Increase (decrease(
500 400 900 RIP 1,700 (1,200) 500
FG 3,100 (4,000) ( 900)
Problem 4 – Barbie Mfg. Company Additional information – Direct labor 80,000; factory overhead – 60,000 1) Raw and In Process 100,000 Accounts payable 100,000 2)
Finished goods Raw and In Process
99,850 99,850
Materials purchased Materials in RIP beg. (5,000-500) Materials in RIP end (5,250-650) Materials backflushed from RIP 3)
Cost of goods sold Finished goods
102,850 102,850
Materials backflushed from RIP Materials in FG beg. (11,250-3.250) Materials in FG end ( 7,500-2,500) Materials backflushed from CofGS 4)
5)
100,000 4,500 ( 4,650) 99,850
99,850 8,000 ( 5,000) 102,850
Cost of goods sold Accrued payroll FO Applied
140,000 80,000 60,000
Raw and in process Cost of goods sold Finished goods End Beginning Increase (decrease)
150 600 750 RIP 650 (500) 150
FG 2,500 (3,250) 750
Page 3 Problem 5 – Chiz Manufacturing Company 1)
Materials purchased Materials in RIP beg. ( 14,500-7,200) Materials in RIP end ( 22,400-15,700) Materials backflushed from RIP to FG
246.000 7,300 ( 6,700) 246,600
2)
Materials backflushed from RIP to FG Materials in FG beg. (16,000-8,800) Materials in FG end (19,800-13,100) Materials backflushed from FG to CofGS
246,600 7,200 ( 6,700) 247,100
3)
Materials purchased RIP beg. FG beg. Direct labor Factory overhead
246,000 14,500 16,000 98,000 125,000
4)
RIP end FG end Cost of goods sold
( 22,400) ( 19,800) 457,300
a)
Raw and in process Accounts payable
246,000 246,000
b)
Finished goods Raw and in process
246,600 246,600
c)
Cost of goods sold Finished goods
247,100 247,100
d)
Cost of goods sold Accrued payroll FO Applied
223,000
e)
98,000 125,000
Raw and in process Finished goods Cost of goods
8,500 4,300 12,800
END BEGINNING Increase (Decrease)
RIP 15,700 ( 7,200) 8,500
CHAPTER 6 – ACCOUNTING FOR MATERIALS Problem 1 - Norman Company _____________ a) EOQ = \/ 2 x 8,000 x 40 25 = 160 units Ordering cost
= = =
Carrying cost
= =
No of orders x ordering cost 8,000 x 40 160 2,000 Average inventory x 25 160 x 25 2
FG 13,100 ( 8,800) 4,300
=
2000
Problem 2 –Heavyweight Co. 1. Allocation based on cost Product Invoice Percentage X 11,250 49% Y 13,500 49% Z 15,750 49%
Share of Freight 450 540 630
2. Allocation based on shipping weight Product Weight Freight/pound X 4,500 .09 Y 6,000 .09 Z 7,500 .09
Total cost Cost/pound 11,700 2.60 14,040 2.34 16,380 2.184
Share of Freight Total Cost Cost/pound 405 11,655 2.59 540 14,040 2.34 675 16,425 2.19
Problem 3 - Dovin Company 1. Amount debited to Materials = 100,000 x 80% x 90% x 90% = 64,800 2. Amount debited to Materials = 100000 x 80% x 90% x 90% x 98% = 63,504
Page 2 Problem 4 – 1. FIRST-IN, FIRST-OUT Received 5
400 x 7.00
2,800
9
400 x 8.00
3,200
16 24
Issued
800 x 6.00 600 x 9.00
5,400
4,800
Balance 1,600 x 6.00 1,600 x 6.00 400 x 7.00 1,600 x 6.00 400 x 7.00 400 x 8.00 800 x 6.00 400 x 7.00 400 x 8.00 800 x 6.00 400 x 7.00 400 x 8.00
9,600` 9,600 2.800 9,600 2,800 3,200 4,800 2,800 3,200 4,800 2,800 3,200
27
800 x 6.00 200 x 7.00
4,800 1,400
600 x 9.00 200 x 7.00 400 x 8.00 600 x 9.00
5,400 1.400 3,200 5,400
Cost of materials issued = 4,800 + 4,800 + 1,400 = 11,000 Cost of ending inventory = 1,400 + 3,200 + 5,400 = 10,000 2, AVERAGE Received 1 5 400 x 7.00 2,800 9 400 x 8.00 3,200 16 24 600 x 9.00 5,400 27
Issued
800 x 6.50
5,200
1,000 x 7.18
7,180
Balance 1,600 x 6.00 2,000 x 6.20 2,400 x 6.50 1,600 x 6.50 2,200 x 7.18 1,200 x 7.18
9,600 12.400 15,600 10,400 15,800 8,620
Balance 1,000 x 4.00 750 x 4.00 1,250 x 4.20 1,100 x 4.20 990 x 4.20 1,000 x 4.20 1,500 x 4.47 1,200 x 4.33 1,100 x 4.33
4,000 3,000 5,250 4,620 4,158 4,200 6,700 5,200 4,767
Cost of materials issued = 5,200 + 7,180 = 12,380 Cost of ending inventory = 8,620 Problem 5 – Heaven & Earth 1. FIFO Issued = 600 x 4.00 = 2,400 Cost of inventory - 200 x 5.00 =- 1,000 500 x 4.50 = 2,250 400 x 4.00 = 1,000 Page 3 2. WEIGHTED AVERAGE Received 1 3 5 500 x 4.50 2,250 6 10 11 15 500 x 5.00 2,500 20 (300) x 5.00 ( 1,500) 26
Issued 250 x 4.00
1,000
150 x 4.20 110 x 4.20 ( 10)x 4.20
630 462 ( 42)
100 x 4.33
433
Problem 6 – Sterling Company
A. PERPETUAL 1. FIFO Received 1 8 10 900 x 18.00 16,200 18 20 1,200 x 18,25
Issued 200 x 1750
3,500
100 x 17.50 500 x 18.00
1,750 9,000
21,900
25
400 x 18.00 600 x 18.25
2. AVERAGE Received 1 8 10 900 x 18.00 18 20 1,200 x 18.25 25
Balance 300 x 17.50 100 x 17.50 100 x 17.50 900 x 18.00 400 x 18.00
7,200 10,950
Issued 200 x 17.50
3,500
600 x 17.95
10,770
1000 x 18.175
18,175
16,200 21,900
Problem 7 – Bedrock Company a. Loss due to spoiled work is spread over all jobs 1. Work in process Materials Payroll FO Applied Page 4 2. Spoiled Goods FO Control Work in process (100 x 165) 3. Finished goods Work in process Unit cost = 1,303,500/7,900 = 165
400 x 18.00 1,200 x 18.25
7,200 21,900
600 x 18.25
10,950
Balance 300 x 17.50 100 x 17.50 1,000 x 17.95 400 x 17.95 1,600 x 18.175 600 x 18.175
5,250 1,750 17,950 7,180 29,080 10,906
1,320,000 360,000 480,000 480,000 8,000 8,500 16,500 1,303,500 1,303,500
B, Loss due to spoiled work is charged to the specific job 1. Work in process Materials Payroll FO Applied 2. Spoiled Goods
5,250 1,750 1,750 16,200 7,200
1,320,000 360,000 480,000 480,000 8,000
Work in process
8,000
3. Finished goods Work in process
1,312000 1,312,000
Problem 8 – Kyralei Co. 1. RAGC is charged with the cost of defective units a. Work in process 176,000 Materials Payroll FO Applied (40,000 x 140%) b.
c. 2.
Work in process Materials Payroll FO Applied
80,000 40,000 56,000
23,200 4,000 8,000 11,200
Finished goods Work in process
199,200 199,200
Cost of correcting defective work in not charged to RAGC a. Work in process 180,000 Materials 80,000 Payroll 40,000 FO Applied (40,000 x 150%) 60,000 b.
FO Control Materials Payroll
24,000 4,000 8,000
Page 5 c.
Finished goods Work in process
Problem 9 – Little Mermaid 1. Charged to specific job a. Work in process Materials Payroll FO Applied b.
c.
Work in process Materials Payroll FO Applied Finished goods
180,000 180,000
75,000 25,000 20,000 30,000
(20,000 x 150%) 1,250
500 300 450 76,250
Work in process 2.
76,250
Charged to all production (FO rate should be 160% of direct labor cost) a. Work in process 77,000 Materials 25,000 Payroll 20,000 FO Applied (20,000 x 160^) 32,000 b.
c.
FO Control Materials Payroll FO Applied
1,280 500 300 480
(300 x 160%)
Finished goods Work in process
77,000 77,000
Problem 10 - Nicole Company 1. Cost to correct defective units charged to specific job a. Work in process 9,000 Materials Payroll FO Applied (20,000 x 150%) b.
Work in process Materials Payroll FO Applied
5,000 2,000 2,000
100 60 20 20
Page 6 c. 2.
Finished goods Work in process
Charged to all production a. Work in process Materials Payroll FO Applied (20,000 x 160^) b.
c.
FO Control Materials Payroll FO Applied
9,100 9,100 9,000 5,000 2,000 2,000 100 60 20 20
(300 x 160%)
Finished goods Work in process
9,000 9,000
Problem 11 – Marvin Corporation1. Work in process Materials Payroll FO Applied 2.
3. 4.
Work in process Materials Payroll FO Applied
117,000 100,000 83,000 4,350 1,650 1,500 1,200
Spoiled goods Work in process
825
Finished goods Work in process
303,525
Problem 12 – Alexis Company 1. Charged to specific job a. Work in process Materials Payroll FO Applied b.
300,000
Spoiled goods ( 600 x 50) Work in process
825 303,525
700,000 350,000 150,000 200,000 30,000 30,000
Page 7 c. 2.
Finished goods Work in process
670,000 670,000
Charged to all production a. Work in process (10,000 x 70) Materials Payroll FO Applied
700,000 350,000 150,000 200,000
b.
c.
Spoiled goods FO Control Work in process (600 x 70) Finished goods Work in process (9,400 x 70)
30,000 12,000 42,000 658,000 658,000
Problem 13 – Raindrops Company _____________________ EOQ = \/ 2 x 60,000 x 800 1,200 Problem 14 ____________________ EOQ = \/ 2 z 100,000 x 413 25.30 a. Investment costs Invoice price Excise tax ( 125.00 x 4%) Insurance on shipment Total
P 125.00 5.00 2.00 P 132.00
b. Carrying costs Cost of capital ( 132.00 x 15%) Inventory insurance Inventory tax ( 125.00 x 2%) Total
P 19.80 3.00 2.50 P 25.30
c. Ordering costs Shipping permit Processing costs Unloading Total
P 300.00 23.00 90,00 P 413.00
Page 8 Problem 15 - Candice Foundry Inc. 1. Spoiled units are due to internal failure a. Work in process Materials Payroll FO Applied b.
c. 2.
Spoiled goods ( 200 x 15.00) Factory overhead control Work in process ( 200 x 18.00) Finished goods Work in process
90,000 46,000 14,000 30,000 3,000 600 3,600 86,400
Spoiled units are due to customer’s specification a. Work in process 90,000
86,400
Materials Payroll FO Applied b. c.
46,000 14,000 30,000
Spoiled goods Work in process
3,000
Finished goods Work in process
87,000
TRUE/FALSE 1. True 2. False 3. False 4. True 5. True Multiple choice 1, a 2, b 3, d 4, a 5, c
6. 7. 8. 9. 10.
3,000 87,000
False False False False True
6. b 7. b 8. a 9. 700 at 5,400 10. b
11. 12. 13. 14. 15. 11. 12. 13. 14. 15.
a a c c d
True False False False False 16. 17. 18. 19. 20.
d b b a b
CHAPTER 7 - ACCOUNTING FOR FACTORY OVERHEAD Problem 1 – Denmark Company FO rate = 216,000 216,000 90,000 72,000 units 240%of DMC P3.00/unit Problem 2 - Colossal Corporation FO rate = 207,000 207,000 500,000 52,100 units 41,40%of DMC
P3,97/unit
216,000 1,600 MHrs. P135/MHr.
P3.00/MHr
= 16,000 Hrs. x P4.50
3. Actual FO Less: Applied
216,000 48,000 DLHrs/
90% of DLC P4.50/DLHr.
207,000 207,000 69,000 MHrs. 85,000 DLHrs.
Problem 3 – Manila Company 1. FO rate = P67,500/15,000 DLHrs. 2. Applied FO
216,000 240,000
207,000 765,000
P2.44/DLHr. 27.06%ofDLC
=
P 4.50/DLHr.
=
P 72,000 P 69,000 72,000
Overapplied FO
( P 3,000)
Problem 4 - Ellery Corporation 1. Job 123 Direct labor cost 600 FO rate 180% Applied FO 1,080 2.
Job 123 DM 300 DL 600 FO 1,080 TOTAL 1,980
Job 124 1,080 940 1,692 3,712
Job 124 940 180% 1,692
Job 125 1,400 180% 2,520
Job 126 5,120 180% 9,216
Job 125 Job 126 TOTAL 720 4,200 6,300 1,400 5,120 8,060 2,520 9,216 14,508 4,640 18,536 28,868
Problem 5 – Rubi Company 1. FO rate
P 60,000 P 60,000
P 60,000 40,000 DLHrs.
100%of DLC
P 1.50/DLHr.
P60,000 25,000 MHrs.
`` P2.40/MHr.
Page 2 2. a) Factory overhead was based on direct labor cost JOB 101 JOB 102 JOB 103 JOB 104 DM 5,000 7,000 8,000 9,000 DL 7,200 10,000 11,000 9,000 FO APP/. 7,200 10,000 11,000 9,000 TOTAL 19,400 27,000 30,000 27,000
JOB 105 10,000 15,000 15,000 40,000
JOB 106 11,000 4,200 4,200 19,400
b). Factory overhead was based on direct labor hours JOB 101 JOB 102 JOB 103 JOB 104 DM 5,000 7,000 8,000 9,000 DL 7,200 10,000 11,000 9,000 FO APP. 7,500 9,000 9,750 8,400 TOTAL 19,700 26,000 28,750 26,400
JOB 105 10,000 15,000 15,750 40,750
JOB 106 11,000 4,200 4,500 19,700
c( Factory overhead was based o machine hours JOB 101 JOB 102 JOB 103 JOB 104 DM 5.000 7,000 8,000 9,000 DL 7,200 10,000 11,000 9,000 FO APP. 7,200 7,680 9,600 8,160 TOTAL 19,400 24,680 28,600 26,160
JOB 105 10,000 15,000 15,000 40,000
JOB 106 11,000 4,200 3.600 18,800
Problem 6 – Thermal Corporation 1. Direct method Direct cost Allocated cost S1 S2 Total Base FO rate
P1___ P 90,000
P2___ P 60,000
S1___ P 20,000
10,000 20,000 P120,000 50,000 MHrs. P 2.40/MHr.
10,000 12,000 P 82,000 20,000 DLHrs P 4.10/DLHr.
( 20,000)
S2___ P 32,000 ( 32.000)
2. Step method P1___ Direct cost P 90,000 Allocated cost S1 2,000 S2 30,000 Total P122,000 Base 50,000 MHrs. FO rate P 2.44/MHr 3. Algebraic method P1___ Direct cost P 90,000 Allocated S1 3.143 S2 28,572 Total P121,715 Base 50,000 MHrs. FO rate P 2.43/MHr.
P2___ P 60,000
S1____ P 20,000
S2___ P 32,000
( 20,000)
16,000 ( 48,000)
P2___ P 60,000
S1___ P 20,000
S2____ P 32,000
3,143 17,143 P80,286 20,000 DLHrs P 4.0/DLHr.
( 31,429) 11,429
25,143 ( 57,143)
2,000 18,000 P 80,000 20,000 DLHrs P 4.00/DLHr.
S1 -= 20,000 + 20% S2 S2 = 32,000 + 80% S1 S1 S1 - .16S1 S1 S2
= = = = =
20000 + 20%( 32,000 + 80% S1) 20,000 + 6,400 + .16 S1 26.400 26,400/.84 31,429
= 32,000 + 80% 31,429 = 32,000 + 25,143 = 57,143
Problem 7 – High Density Corporation 1. Direct method Insertion Assembly Direct cost 685,000 795,000 Allocated Bldg. occupancy 63,158 116,842 Accounting 100,227 144.773 Maintenance 132,955 192.045 Total 981,340 1,248,660
Occupancy Accounting Maintenance 180,000 245,000 325,000 (180,000) ( 245,000) ( 325,000)
2. Step method Direct cost Allocated cost Occupancy Accounting Maintenance Total
Insertion Assembly 685,000 795,000
Occupancy Accounting 180,000 245,000
55.728 94,480 147,365 982,573
( 180,000)
103,096 136,471 212,860 1,247,427
11,146 (256.146)
Maintenance 325,000 10,030 25,145 (360,175)
Problem 8 - Central Parkway Corp. Direct cost Allocated S1 S2 Total S1 S2 S1 S1 - .025 S1 S1 S2
P1___ 120,000
P2____ 80,000
13,333 8,333 141,666
6,667 6,667 93,334
S1___ 25,000 ( 26,667) 1,667
= =
25,000 + 10% of S2 10,000 + 25% of S1
= = = = =
25,000 + 10% ( 10,000 + .25S1 25,000 + 1,000 + .025S1 26,000 26,000/.975 26,667
= =
10,000 + .25(26,667) 16,667
Problem 9 – Megastar Company
S2___ 10,000 6,667 (16,667)
Fixed Variable
95,000 Mach. Hrs. Per Mach.Hr. 0.36 ( 34,200/95,000) 0.44 ( 41,800/95,000) 0.80
Total 34,200 41,800 76,000
1.
Actual factory overhead Less: Applied (100,000 x .80) Overapplied factory overhead
P 78,600 80,000 ( 1,400)
2.
Actual factory overhead Less: Budget allowed on actual hours Fixed 34,200 Variable (100,000 x .44) 44,000 Spending variance – unfavorable
P 78,600
Budged allowed on actual hours Less: Applied factory overhead Idge capacity variance favorable
P 78,200 80,000 ( 1,800)
3.
78,200 P 400
Page 5 Problem 10 - Abner Company
Fixed Variable Total
TotalP 33,840 302400 P336,200
72,000 units Per unit P 0.47 (33,840/72,000) 4.20 (72,000 x 4.20) P 4.67
1.
Actual FO Less: Applied FO 5,400 units x P 4.67 Underapplied FO
P 15,910 25,218 (P 9.308)
2.
Actual FO Less: Budget allowed on actual hours Fixed (33,840/12 months) Variable ( 5,400 x 4.20) Spending variance – favorable
P 15,910
3.
Budged allowed on actual hours Less: Applied Idle capacity variance – unfavorable
2,820 22,680 25,500 ( P 9,590) P25,500 25,218 P 282
Problem 11 - Norman Corporation 1. Variable rate/hour = 270,000 – 252,000 60,000 - 48,000 = P1.50/DLHr. 2. Total Less: Variable (60,000 x 1.50) (48,000 x 1.50) Fixed 2.
High 270,000
Low 252,000
90,000 _______ 180,000
72,000 180,000
Actual factor overhead Less: Applied ( 60,000 x 90%) x 5.25 Overapplied FO FO rate =
252,000 48,000
= 5.25/ DLHrs.
Page 6 3. Actual factory overhead Less: Budget allowed on actual hours Fixed Variable (54,000 x 1.50) Spending variance 4.
273,000 283,500 ( 10,500)
273,000 180,000 81,000
Budget allowed on actual hours Less: Applied Idle capacity variance
261,000 12,000 261,000 283,500 ( 22,500)
Problem 12 - Blanche Corporation 1.
Variable rate/ = 356 ,250 - 348,750 47,500 - 45.000
2. Total Less: Variable 45,000 x 3 47,500 x 3 Fixed
=
P3.00/DLHr.
90% capacity 348,750
95% capacity 356,250
135,000 _______ 213,750
142,500 213,750
3.
Actual factory overhead Less: Applied ( 42,500 DLHrs x 7.50) Underapplied factory overhead
445,000 318,750 126,250
Problem 13 - Bulilit Company 1) Direct materials (50 x P120) (100 x P120) Direct labor Factory overhead applied ( 100 x P25) (400 x P25) Total costs Divide by number of units Cost per unit
Product A P 6,000 2,000 2,500 ________ P 10,500 50__ P 210.00
Product B P 12,000 8,000 10,000 P 30,000 100_ P 300.00
Factory overhead rate = Est. Factory overhead Est. direct labor hours = P200,750/ 8,030 = P 25.00/ per direct labor hour Page 7 2) Direct materials Direct labor Factory overhead applied Mat. Handling ( 20 x ( 50 x Setup ( 5x ( 8x Design changes ( 2 x ( 5x No. of parts ( 10 x ( 15 x Total costs Divide by number of units Cost per unit
Product A P 6,000 2,000 P 50 ) P 50) P 200) P 200) P 107.50) P 107.50) P 100) P 100)
Factory overhead rate Mat. Handling P60,000/1,200 Setup P 80,000/ 400 Design changes P 10,750/ 100 No. of parts P 50,000/ 500
= = = =
Product B P 12,000 8,000
1,000 2,500 1,000 1,600 215 537.50 1,000 ________ P 11,215 50__ P 224.30
1,500 P 26,137.50 100___ P 261.38
P 50/ times handled P 200/setup P 107.50/change P 100/part
Problem 14 Job 101 Job 102 Job 103 P 100 ( 2 x P100) P 200 (4 x P100) P 400 400 ( 10 x P 20) 200 (30 x P20) 600 300 ( 10 x P 10) 100 ( 50 x P10) 500 500 ( 50 x P50) 2,500 ( 10 x P50) 500 P 1,300 P 3,000 P 2,000
Setup ( 1 x P 100) Inspections ( 20 x P 20) Mat. Moves ( 30 x P 10) Eng. Hours ( 10 x P 50) Total factory OH
Factory overhead rate Setup P 20,000/200 Inspections P 130,000/6,500 Mat. Moves P 80,000/8,000 Eng. Hrs. P 50,000/1,000
Page 8 TRUE/FALSE 1. True 2. False 3. True 4. True 5. True MULTIPLE CHOICE 1. c 6. 2. c 7. 3. d 8. 4. c 9. 5. 7,000 fav. 10. `
6. 7. 8. 9. 10. c c c c c
True True True False True
= = = =
P 100/setup P 20/inspection P 10/move P 50/hour
11. 12. 13. 14. 15. 11. a 12. 13. d 14. 137,500 hrs. 15. d
False False True True True 16. b 17. c 18 39,000 UA 19. a 20. c 21. b 22. a 23.
CHAPTER 8 - ACCOUNTING FOR LABOR
a
TRUE/FALSE 1. True 2. False 3. False 4. False 5. False
6. 7. 8. 9. 10.
False True True True True
Problem 1 - Evergreen Company A) 1. CHARGED TO THE JOB 2. CHARGED TO FACTORY OVERHEAD CONTROL
Direct materials Direct labor Factory overhead Overtime Total
CHARGED JOB 401 28,000 18,000 5,600 ______ 51,600
CHARGED TO FOC Other factory costs Overtime Total
TO JOB JOB 402 37,000 23,000 11,200 6,000 77,200 P 16,800 6,000 P 22,800
CHARGED JOB 401 28,000 18,000 7,600 ______ 53,600
TO FOC JOB 402 37,000 23,000 15,200 ______ 75,200
x 1/3 X 2/3
Problem 2 No. Regular OT Employee Hrs Rate Pay Hours Austria 42 36.00 1,512 2 Bautista 43 36.00 1,548 3 DeSantos 44 45.00 1,980 4 Motus 40 30.00 1,200 Reyes 40 30.00 1,200 TOTAL 7,440 b) 1. Payroll Accrued payroll 2. 3. Page 2
Rate 18.00 18.00 22.50 -
Overtime Premium 36.00 54.00 90.00 -__ 180.00
Total Pay 1,548 1,602 2,070 -___ 7,620 7,620 7,620
Accrued payroll Cash
7,620
Work in process (1,512 + 1,548 + 1,980) FOC (1,200 + 1,200 + 180 ) Payroll
5,040 2,580
7,620
7,620
Problem 3 - Norman Company Employee Guaranteed Wage Cruz 2,000 Briones 2,000 David 2,000 Mendoze 2,000 Rivera 2,000 Tolentino 2,000 TOTAL 12,000
Total pay – piece rate (240 x 7.50) (286 x 7.50) (275 x 7.50) (240 x 7.50) (225 x 7.50) (285 x 7.50)
Deficiency
1,800 2,145 2,062.50 1,800 1,687.50 2,137.50 11,632.50
2. Charged to Work in process 3. Charged to factory overhead account -
200 200 312,50 -___ 712.50
Total Payroll 2,000.00 2,145.00 2,062.50 2,000.00 2,000.00 2,137.50 12,345.00
11,632.50 712,50
Problem 4 - Ty-Nee Trailer Company Deductions were computed on the assumption that previous payment of wages were made without deductions and all deductions are made on the last payment for the month. Assume the following amount as previous wages (for the past 3 weeks) Castro 5,600 Ardina 7,500 Brioes 6,500 David 6,200 Fajardo 5,900 Tomas 5,800 Villas 5,200 Employee Castro Ardina Briones David Fajardo Tomas Villas TOTAL
Continuation Employee
REGU HRS. 42 45 48 48 45 42 40
Total
LAR RATE 40.00 50.00 40.00 40.00 40.00 40.00 40.00
PAY 1,680.00 2,250.00 1,920.00 1,920.00 1,800.00 1,680.00 1,600.00 12,850.00
SSS W/holding
OVER TIME HRS. RATE 2 20.00 5 25.00 8 20.00 8 20.00 5 20.00 2 20.00 -
Phil.
PAY 40.00 125.00 160.00 160.00 100.00 40.00 -__ 625.00
Pag- Total
TOTAL PAY 1,720.00 2,375.00 2,080.00 2,080.00 1,900.00 1,720.00 1,600.00 13,475.00
Net
Castro Ardina Briones David Fajardo Tomas Villas TOTAL
Pay Prem. 1,720.00 250.00 2,375.00 333.30 2,080.00 283.30 2,080.00 283.30 1,900.00 266.70 1,720.00 250.00 1,600.00 233.30 13,475.00 1899.90
Tax 681.28 614.53 840.93 865.33 603.38 461.38 438.28 4,505.11
Health 87.50 112.50 100.00 100.00 87.50 87.50 75.00 650.00
Castro Total pay (5,600 + 1,720) 7,320 ( 4,167) - 208.33 3,153 x 15% - 472,95 681.28 Ardina Total pay (7,500 + 2,375) 9,875 ( 7,167) 208.33 2,708 x 15% 406.20 614.53 Briones Total pay (6,500 + 2,080) 8,580 (7,917) 708.33 663 x 20% 132,60 840.93 David Total pay (6,200 + 2,080) 8,280 ( 7,500) 708.33 780 x 20% 156.00 864.33 Fajardo Total pay (5,900 +1,900) 7,800 ( 5,167) 208.33 2,633 x 15% 394.95 603.38 Tomas Total pay (5,800 + 1,720) 7,520 ( 5,833) 208.33 1,687 x 15% 253.05 461.38
Page 4
ibig 100.00 100.00 100.00 100.00 100.00 100.00 100.00 700.00
Deduct Pay 1,118.78 601.22 1,160.33 1214.67 1,324.23 755.77 1,348.63 731.37 1,057.58 842.42 898.88 821.12 846.58 753.42 7,755.01 5719.99
Villas Total pay (5,200 + 1,600)
2.
6,800 (5,267) 208.33 1,533) x 15% 229.95 438.28
Payroll W/holding tax payable SSS Premiums payable Phil Health Contributions payable Pag-ibig funds contributions payable Accrued payroll
13,475.00 4,505.11 1,899.90 650.00 700.00 5,719.99
Accrued payroll Cash
5,719.99 5,719.99
Work in process (12,850 – 1,680) Factory overhead control (1,680 + 625) Payroll MULTILE CHOICE 1. b 2. b 3. a 4. b. 5. a
6. 7. 8. 9. 10.
a d d a c
Entry for No 11 should be Work in process – Job 1010 Work in process – Job 1011 Factory overhead control (1,250 + 37) Payroll payable
11,170.00 2,305.00 13,475
11. none of the give 12. d 13. d 14. d 15. c 9,748 1,200 1,287 12,235
CHAPTER 9 – PROCESS COSTING Problem 1 a)
Units completed Units IP end
Actual 8,000 2,000 10,000
b)
Units completed Units IP end
21,000 4,000
Mat. & Conversion WD EP 100% 8,000 1/2 1,000 9,000 100% 3/4
21,000 3,000
25,000
24,000
c)
Units completed Units IP end
6,000 1,000 500 7,500
100% 3/4 2/5
6,000 750 200 6,950
d)
Units completed Units IP end
18,000 5,000 4,000 27,000
100% ½ ¾
18,000 2,500 3,000 23,500
e)
Units completed Units IP end
32,000 1,500 4,000 37,500
100% 1/5 ¾
32,000 300 3,000 35,300
Problem 2 - Casper Corporation 1) Units started 11,000 Units completed Units in process, end 2) Cost incurred Equivalent prod. Unit cost Problem 3 Case 1 Started Completed In process, end
9,000 2,000 11,000
100% ¾
Materials P 15,750 10,500 P 1.50
5,000 4,000 1,000 5,000
Labor P 40,950 10,500 P 3,90
9,000 1,500 10,500 Overhead P 25,200 10,500 P 2.40
Materials WD EP
Conversion WD EP
100% 100%
100% ¾
4,000 1,000 5,000
4,000 750 4,750
Case 2 Received
50,000
Completed In process end
44,000 6,000 50,000
Started
35,000
Completed
29,000
100% 44,000 44,000
100% 44,000 ¼ 1,500 45,500
100% 29,000
100% 29,000
Case 3
In process, end
3,000 3,000 35,000
75% 100%
2,250 3,000 34,250
1/3 1/2
1,000 1,500 31,500
10,500 750 11,250
100% 2/5
10,500 600 11,100
Page 2 Problem 4 - Beautiful Company Started 12,000 Completed In process end
10,500 1,500 12,000
Unit cost M = 72,000/11,250 = 6.40
100% 50%
L = 88,800/11,100 = 8
2. Completed & transferred ( 10,500 x 18.40) 3. In process, end Materials L & OH
( 750 x 6.40) ( 600 x 12)
OH = 44,400/11,100 = 4
193,200 4,800 7,200 12,000
Problem 5 - ABM Company
Started/received Completed IP, end
Department 1 Department 2 Materials Conversion Materials Conversion Actual EP EP Actual EP EP 60,000 40,000
40,000 40,000 40,000 30,000 30,000 30,009 20,000 20,000 15,000 10,000 5,000 8,000 60,000 60,000 55,000 40,000 35,000 38,000
Costs charged to the department Cost from preceding dept. Cost added in the dept. Materials 480,000 Labor 330,000 Overhead 220,000 Total costs added 1,030.000 Total costs 1,030,000
720,000 8.00 6.00 4.00 18.00 18.00
Total costs accounted for as follows: C & T (40,000 x 18) 720,000 IP end Cost from preceding dept. Materials ( 20,000 x 8) 160,000 Labor (15,000 x 6) 90,000
18.00
245,000 7.00 190,000 5.00 114,000 3.00 549,000 15.00 1,269,000 33.00 (30,000 x 33) (10,000 x 18) 180,000 ( 5,000 x 7) 35,000 ( 8,000 x 5) 40,000
990,000
Overhead (15,000 x 4) Total cost as accounted for
60,000
Problem 6 - Ten Ten Corporation Actual 1, Units started 100,000 Completed IP end
90,000 10,000 100,000
310,000 1,030,000
( 8,000 x 3)
24,000 279,000 1,269,000
Strawberry WD EP
Chocolate WD EP
Conversion WD EP
100% 90,000 100% 10,000 100,000
100% 90,000 100% 90,000 _____ 70% 7,000 90,000 97,000
2. Unit cost Strawberry = 180,000/100,000 = 1.80 Chocolate = 135,000/ 90,000 = 1.50 Conversion = 116,400/97,000 = 1,20 3. Completed & transferred (90,000 x 4.50) 4. In process, end Strawberry ( 10,000 x 1.80) Chocolate Conversion ( 7,000 x 1.20)
405,000 18.000 8,400 26,400
page 3 Problem 7 – Lenlen Corporation a) Lost units – discovered at the beginning Units received Units completed
80,000 60,000
100% 60,000
Units IP end Units lost
10,000 10,000 80,000
100% 10,000 -___ 70,000
Costs accounted for as follows: Cost from preceding dept. 560,000 Cost added in the department Materials 175,000 Labor 121,875 Overhead 243,750 Total cost added 540,625 Total costs 1,100,625 Cost accounted for as follows: Completed and trsnsferred ( 60,000 x 16.125) In process, end Cost from preceding dept. ( 10,000 x 8) 80,000 Materials ( 10,000 x 2.50) 25,000 Labor ( 5,000 x 1.875) 9,375
100% 60,000 50%
5,000 -___ 65,000
8.00 2.50 1.875 3.75 8,125 16.125 967,500
Overhead ( 5,000 x 3.75) Total costs as accounted for
18,750
133,125 1.100,625.
b) Normal – discovered at the end Units completed 60,000 100% 60.000 100% 60,000 Units IP end 10,000 100% 10,000 50% 5,000 Units lost 10,000 100% 10,000 100% 10,000 80,000 80,000 75,000 Costs charged to the department Cost from preceding dept. 560,000 7.00 Cost added in the dept. Materials 175,000 2.1875 Labor 121,875 1.625 Overhead 243,750 3.25__ Total costs added 540,625 7.0625 Total costs 1,100,625 14.0625 Total costs accounted for as follows: Comp. & gransf. ( 60,000 x 14.0625) + (10,000 x 14.0625) 984,375 IP end Cost from prec. Dept. ( 10,000 x 7) 70,000 Materials ( 10,000 x 2.1875) 21,875 Labor ( 5,000 x 1.625) 8,125 Overhead (5,000 x 3.25) 16,250 116,250 Total costs as accounted for 1,100,625 c) Abormal – discovered when 60% completed Units completed 60,000 100% 60,000 Unitx IP ed 10,000 100% 10,000 Units lost 10,000 100% 10,000 80.000 80,000 Costs charged to the department Cost from preceding dept. 560,000 Cost added in the dept. Materials 175,000 Labor 121,875 Overhead 243,750 Total added 540,625 Total costs 14.33714 Page 4 Total costs as accounted for Comp. & transf. ( 60,000 x 14.33714) FOC (10,000 x 7.00) + (10,000 x 2.1875) + (6,000 x 5.14964) IP, end Cost from prec. Dept ( 10,000 x 7.00) 70,000 Materials ( 10,000 x 2.1875) 21,875
100% 60,000 50% 5,000 60% 6,000 71,000 7.00 2.1875 1.71655 3.43309 7.33714 1,100,625
860,228 122,773
Labor ( 6,000 x 1.71655) Overhead ( 6,000 x 3.43309) Total cost as accounted for
8,583 17,166 117,624 1,100,625
d) Lost – abnormal discovered at the end Note - Equivalent production and unit costs the same as lost – Normal discovered at the end. The difference is only on the allocation of the cost. Completed & transferred ( 60,000 x 14.0625) Spoiled goods ( 10,000 x 12.00) FOC 10,000 ( 14.0625 – 12.00) IP end Cost from prec. (10,000 x 7) Materials ( 10,000 x 2.1875) Labor (5,000 x 1.625) Overhead (5,000 x 3.25) Total costs as accounted for
843,750 120,000 20,625 70,000 21.875 8,125 16,250
116,250 1,100,625
Problem 8 - Briones Company Units received 28,000 Units completed 16,000 Units IP end 10,000 Units lost – normal 800 Units lost – abnormal 1,200 28,000
100% 16,000 ______ 16,000
Cost charged to the department Cost from preceding department Cost added in the department Materials Conversion Total added Total costs to be accounted for Costs accounted for as follows: Completed & transf. (16,000 x 19) + (800 x 17.50) FOC ( 1,200 x 17.50) IP end Cost from preceding dept. ( 10,000 x 10) Materials Conversion (6,000 x 7.50) Total costs as accounted for Problem 9 - EDSA Corporation
100% 16,000 60% 6,000 100% 800 100% 1,200 24,000
280,000
10.00
24,000 180,000 204,000 484,000
1.50 7.50 9.00 19.00 318,000 21,000
100,000 45,000
145,000 484,000
Started/received Increase in units Completed IP, end Lost
60,000 ______ 60,000 36,000 36,000 9,000 9,000 15,000 _____ 60,000 45,000
36,000 3,000 _____ 39,000
Page 5 Cost charged to the department Cost from prec. Dept. Cost added in the dept. Materials 180,000 4.00 Labor 78,000 2.00 Overhead 15,600 0.40 Total added 273,600 6.40 Total costs 273,600 6.40 Costs accounted for as follows: Completed ( 36,000 x 6.40) 230,400 IP end Cost from prec. Dept. Mat. ( 9,000 x 4) 36,000 Labor (3,000 x 2) 6,000 OH ( 3,000 x 0.40) 1,200 43,200 273,600 Problem 10 Received 5,000 Completed 3,800 100% 3,800 IP end 800 40% 320 Lost 400 100% 400 5,000 4,520 Costs charged to the dept. Cost from prec. Dept 60,000 Cost added in the dept. Materials 22.600 Labor 17,440 Overhead 13,080 Total added 53,120 Total costs as accounted for 113,120 Costs accounted for as follows Completed ( 3.800 x 24) Spoiled goods ( 400 x 15) FOC 400 x (24 – 15) IP end Cost from prec. Dept. ( 800 x 12)
36,000 9,000 45,000 39,000 6,000 ______ 45,000
39,000 6,000 _____ 45,000
39,000 2,400 _____ 41,400
230,400
5.12
135,000 82,800 41,400 259,200 489,600
3.00 2.00 1.00 6.00 11.12
(30,000 x 11.12)
433,680
(6,000 x 5.12) 30,720 (6,000 x 3.00) 18,000 (2,400 x 2.00) 4,800 (2,400 x 1.00) 2,400 55,920 489,600 100% 20 100%
3,800 160 400 4,360
12.00 5.00 4.00 3.00 12.00 24,00 91,200 6,000 3,600 9,600
Mat. ( 320 x 5) 1,600 Labor ( 160 x 4) 640 Overhead ( 160 x 3) 480 12,320 Total costs as accounted for 113,120 Problem 11 - Diamond Company Units received 55,000 Increase in units 5,000 60,000 Units completed 48,000 100% 48,000 100% 48,000 Units IP end 12,000 100% 12,000 70% 8,400 60,000 60,000 56,400 Costs charged to the department Cost from prec. Dept. 24,750 0.4125 Cost added in the dept. Materials 7,200 0.12 Conversion cost 53,580 0,95 Total added 60,780 1.07 Total costs 85,530 1.4825 Total costs accounted for as follows: Completed ( 48,000 x 1.4825) 71,160 IP end Cost from prec. Dept. ( 12,000 x0.4125) 4,950 Materials (12,000 x 0.12) 1,440 Conversion cost ( 8,400 x 0.95) 7,980 14,370 85,530 Page 6 Multiple choice 1. C 11. D 21. D 2. C 12. D 22. B 3. B 13. B 23. B cost should 4. 48,500 14. 11,000 be 2,760,00 5. C 15. D 24. C 6. B 16. D 25. D 7. C 17. A 26. A 8. C 18. D 27. B 9. B 19. C 28. D 10. D 20. B
CHAPTER 10 - AVERAGE AND FIFO COSTING TRUE OR FALSE 1. TRUE 2. TRUE 3. TRUE
MULTIPLE CHOICE - THEORY 1. B 11. C 2. A 12. C 3. A 13. C
4. 5. 6. 7. 8. 9. 10.
FALSE TRUE TRUE FALSE TRUE TRUE TRUE
4. 5. 6. 7. 8. 9. 10.
B A C A A D A
14. 15.
C D
Problem 1 1) FIFO Units in process, beg. Units started
6,000 42,000 48,000 Units completed & transferred (40,000) IP beg. 6,000 80% 4,800 70% 4,200 Started & completed 34,000 100% 34,000 100% 34,000 Units in process, end 8,000 10% 800 15% 1,200 48,000 39,600 39,400 2) AVERAGE Units in process, beg. 6,000 Units started 42,000 48,000 Units completed Units IP end
40,000 100% 40,000 100% 40,000 8,000 10% 800 15% 1,200 48,000 40,800 41,200
Problem 2 1) FIFO Units in process, beg. Units started
5,000 35,000 40,000 Units completed & transferred (30,000) IP beg. 6,000 85% 5,100 75% 4,500 Started & completed 24,000 100% 24,000 100% 24,000 Units in process, end 10,000 20% 2,000 30% 3,000 40,000 31,100 31,500
PAGE 2 2) AVERAGE Units in process, beg. Units started
5,000 35,000 40,000
Units completed Units IP end
30,000 100% 10,000 20% 48,000
Problem 3 1) Units in process beg. Units started
30,000 100% 2,000 30% 32,000
30,000 3,000 33,000
300 2,000 2.300
Units comp. & transf. (1,700) IP beg. Started & completed Units in process, end
300 1,400 600 2,300
40% 100% 40%
120 70% 1,400 100% 240 20% 1,760
210 1,400 120 1,730
2) Unit cost -
540 Materials 3,714/1760 Conversion 2,258/1730 6,512
= =
2.110227 1.305202 3.415429
3) Cost of units transferred out From IP beg. Cost last month 540 Cost added Mat. ( 120 x 2.110227) 253 Conversion ( 210 x 1.305202) 274 From units started & completed (1,400 x 3.415429) 4) Cost of ending inventory Materials (240 x 2.110227) Conversion ( 120 x 1.305202)
1,067 4,782 5,849
507 156 663
Problem 4 1) FIFO Units in process, beg Units started
8,000 14,000 22,000
Units Completed ( 17,000) IP beg. 8,000 70% 5,600 70% 5,600 Started & completed 9,000 100% 9,000 100% 9,000 Units in process, end 5,000 80% 4,000 40% 2,000 22,000 18,600 16,600 Page 3
Unit cost
48,240 126,852/18,000 219,120/16,600 394,212
Materials Conversion
Completed & transf. IP beg. Cost labor month Cost added (5,600 x 20.02) Started & completed ( 9,000 x 20.02)
= 6.82 = 13.20 20.02
48,240 112,112
160,352 180,180
340,532
IP end Materials ( 4,000 x 6.82) Conversion ( 2,000 x 13.20) 2) AVERAGE Units completed Units IP end Unit cost
27,280 26,400
17,000 5,000 22,000
100% 17,000 100% 80% 4,000 40% 21,000
53,680 394,212 17,000 2,000 19,000
Materials
16,440 + 126,852 = 6.823428 21,000 Conversion = 31800 + 219,120 = 13.206316 19,000 20.029744
Completed & transferred ( 17,000 x 20.029744) IP end Materials ( 4,000 x 6.823428) Conversion (2000 x 13.206316)
340,506 27,294 26,412 53,706 394,212
Problem 5 – Auto Novelties, Inc. a. Average 1) Units in process beg. 15,000 Units started 250,000 265,000 Units completed & transf. 245,000 Units in process end 20,000 265,000 2) Unit cost
Materials Converion
100% 100%
245,000 20,000 265,000
210,000 + 3,500,000 265,000
100% 40%
= 14.00
60,000 + 1,458,000 = 6.00 253,000 20,00
245,000 8,000 253,000
Page 4 3) 4)
Completed & transf. (245000 x 20) IP ined Materials ( ( 20,000 x 14) Conversion ( 8000 x 6)
b) FIFO 1) Units completed ( 245,000) IP beg Started & completed 230,000 Units IP beg. 8,000
4,900,000 280,000 48,000
15,000 230,000 20,000
1/3 100% 230,000 100%
265,000 2)Unit cost:
Materials Conversion
3,500,000/250,000 1,458000/243,000
328,000 5,228,000 5,000 100%
20,000
40%
250,000 = =
243,000
14.00 6.00 20.00
3) Completed& transferred From IP beg. Cost last month 270,000 Cost added ( 5,000 x 6) 30,000 From started & completed ( 230,000 x 20) 4) IP end Materials ( 20,000 x 14) Conversion (8,000 x 6) 328,000
300,000 4,600,000
4,900,000
280,000 48,000 5,228,000
Problem 6 - Ellery Company A) AVERAGE 1) Units IP beg. Units started Units completed Units IP ed 2)
Unit cost
15,500 36,000 51,500 48,000 3,500 51,500
100% 100%
Materials 7,800 + 54,000 51,500
48,000 3,500 51,500 =
100% 45% 1.20
48,000 1,575 49,575
Conversion 20,150 + 79,000= 49,575 3)
Completed & transferred ( 48,000 x 3.20)
153,600
4) IP end Materials ( 3,500 x 1.20) Conversion ( 1,575) x 2.00)
Page 5 B) FIFO 1) Units IP beg Units started
Unit cost
4,200 3,150
7,350 160,950
15,500 36,000 51,500
Units completed (48,000) IP beg. Started & completed Units IP end 2)
2.00 3,20
15,500 32,500 100% 3,500 100% 51,500
IP beg. 27,950 Materials 54,000/36000 = Conversion 79,000/39,500 = 160,950
3) Completed & transferred IP beg. Cost last month Cost added ( 5,425 x 2) Started & completed ( 32,500 x 3.50)
Units completed
1.50 2.00 3.50
27,950 10,850 113,750
4) IP end Materials ( 3,500 x 1.50) Conversion ( 1,575 x 2) Problem 7 - GDL Company A) AVERAGE Units IP beg Units received
35% 5,425 32,500 100% 32,500 3,500 45% 1,575 36,000 39,500
152,550
5,250 3,150 8,400 160,950
10,000 40,000 50,000 35,000
100%
35,000
100%
35,000
Units IP end Units lost – normal
10,000 100% 5,000 50,000
10,000 50% ______ 45,000
5,000 ______ 40,000
Unit cost Cost from preceding dept. 40,000 + 140,000 = 4.00 50,000 – 5,000 Materials
20,000 + 70,000 45,000
= 2.00
Labor
39,000 + 162,500 40,000
= 5.0375
Overhead
42,000 + 130,000 40,000
= 4.30 _____ 15.3375
Page 6 Problem 7 – continuation Completed & transferred ( 35,000 x 15.3375)
536,812.50
IP end Cost from prec. Dept ( 10,000 x 4) Materials ( 10,000 x 2) Labor ( 5,000 x 5.0375) Overhead ( 5,000 x 4.30)
40,000.00 20,000.00 25,187.50 21,500.00 106,687.50
B)FIFO Units IP beg. Units received
10,000 40,000 50,000
Units completed ( 35,000) IP beg. 10,000 1/4 2.500 Started & completed 25,000 100% 25,000 100% 25,000 Units IP end 10,000 100% 10,000 1/2 5,000 Units lost 5,000 ______ ______ 50,000 35,000 32,500 Unit cost IP beg. From preceding dept. Materials Labor
141,000 140,000/40,000 – 5,000 = 70,000/35,000 = 2.00 162,500/32,500 =
4.00 5.00
Overhead
130,000/32,500 643,500 Completed & transferred *35000) IP beg Cost last month Cost added ( 2.500 x 9) Received & completed ( 25,000 x 15)
=
4.00 15.00
141,000 22,500 375,000 538,500
IP end Cost from preceding dept. ( 10,000 x 4) Materials (10,000 x 2) Labor ( 5,000 x 5) Overhead ( 5,000 x 4)
40,000 20,000 25,000 20,000 105,000
Page 8 - Janice Manufacturing Co. Units in process, beg. 2,000 Units received from preceding dept. 9,000 11,000 Units comp. & transf. 8,000 IP beg. 2,000 50% Received & completed 6,000 Units in process, end 3,000 1/3 11,000 Cost – IP beg. Cost from precedig dept. Cost added in the dept Materials Labor Overhead Total costs to be accounted from Costs accounted for as follows: Cost of units completed & transf.
10,250 36,000 4,000 8,000 6,000 18,000 64,250
1,000 100% 6,000 1,000 8,000 P 4.00 .50 1.00 .75 . 2,25 6.25
IP beg. 10,250 Cost added ( 1,000 x 2.25) 2,250 Cost & transf. (6,000 x 6.25)
12,500 37,500
50,000
IP end Cost from preceding (3,000 x 4.00) M, L, O ( 1,000 x 2.25) Total costs as accounted for
12,000 2,250 14,250 64,250
Problme 9 – Norman Corporation AVERAGE METHOD Units IP beg. Units started
1,000 9,000 10,000
Units completed & transferred Units IP end 750 Units lost – abnormal 100% 500
8,000 100% 8,000 100% 8,000 100% 8,000 1,500 100% 1,500 75% 1,125 50% 500 100% 10,000
500
100%
10,000
500 9,625
9,250 Cost to be accounted for Materials Labor Overhead
Cost IP beg 2,520 1,540 2,800 6,860
Cost added Unit cost 72,480 7.50 21,560 2.40 43,450 5.00 137,490 14.90
Page 3 Cost accounted for as following Completed & transferred ( 8,000 x 14.90) 119,200 Factory Overhead ( 500 x 14.90) 7,450 In process, end Materials (1,500 x 7.50) 11,250 Labor ( 1,125 x 2.40) 2,700 Overhead ( 750 x 5.00) 3,750 17,700 Total costs as accounted for 144,350 Problem 9 - Norman Corporation FIFO METHOD Units completed & transferred IP beg.
1,000
40%
400
65%
650 75%
750
Started & completed 7,000 Units IP end 750 Units lost – abnormal 100% 500
7,000
100%
7,000 100% 7,000 100%
1,500
100%
1,500
500 10,000
100% 9,400
75% 1,125
50%
500
500
100% 9,275
9,000 Cost to be accounted for Cost IP beg. Cost added Materials Labor Overhead
6,860 72,480 21,560 43,450 137,490 144,350
7.710638 2.324528 4.827778 14,862944 14,862944
Total costs to be accounted Costs accounted for as follows: Completed & transferred IP beg. Cost – last month 6,860 Cost added M ( 400 x 7.710638) 3,084 L ( 650 x 2.324528) 1,511 O ( 750 x 4.827778) 3,621 Started & comp.(7,000 x 14.862944) 104,041___ 119,117 Factory overhead control ( 500 x 14.862944) 7,432 In Process, end Materuaks ( 1,500 x 7.710638) 11,566 Labor ( 1,125 x 2.324528) 2,615 Overhead ( 750 x 4.827778) 3,620 17,801 144,350
Problem 10 1) Units IP beg Units received Units completed Units IP end
5,000 20,000 25,000 21,000 4,000
100% 21,000 ______
100% 21,000 30% 1,200
25,000 2)
Unit cost Transferred in
21,000
22,200
17,750 + 104,000 = 25,000 + 23,100 21,000
4.87
Materials
0
= 1.10
Conversion
7,250 + 38,400 = 2.056306 22,200 8.026306
3) Completed ( 21,000 x 8.026306 ) 168,552 4) IP end Prec. Dept. cost (4,000 x 4.87) 19,480 Materials Conversion ( 1,200 x 2.056306)
2,468
21,948 Problem 11 – Nofat Company Conversion 1) Units IP beg. 600 Units received 3,900 4,500 Units completed 4,100 4,100 Units IP end 400 120 4,500 4,220 2) Units cost From preceding department
Material A
100%
4,100
100%
400
Material B
100%
4,500 9,090 + 67,410 = 4,500 4,000 + 21,200 4,500
=
Material B
0 + 16,400 4,100
=
1,340
190%
_____
30%
4,100
Material A
Conversion
4,100
+ 17,650 = 4,220
17,00 5.60 4.00 4.50 ______ 31.10
3) Completed ( 4,500 x31.10) 139,950 4) IP end Cost from precede dept. ( 400 x 17.00) Material A ( 4.00 x 5.60) Conversion ( 120 x 4.50)
6,800 2,240 540 9,580
Page 10 Problem 12 Units started
10,500
Units completed Units IP end Buts kist - Boral
7,000 3,000 500 10,500
100%
7,000
Problem 13 - Alonzo Manufacturing Materials Cost – IP beg. P 6,544 Current cost 281,656 Total costs P288,200 Divided by equivalent prod. 262,000 Unit cost P 1.10 1.
Completed & transferred
2.
Total costs to be accounted for Less: Cost of units IP end Costs of units completed
100%
7,00
Conversion Total P 16,803 P 23,347 344,817 626,473 P 361,620 P649,820 258,300 P 1,40 P 2.50
( 255,200 x 2.50)
P 638,000 P 649,820 11,597 P 638,223
Problem 14 - Nicole Mfg. Co. 1) Units IP beg. 12,000 Units received 80,000 Increase in units 4,000 96,000 Units completed Units IP end
Costs – IP beg. 17,735
86,000 100% 10,000 100% 06,000 Transf. In P 11,800
86,000 100% 10,000 2/5 96,000
86,000 4,000 90,000
Materials Labor Overhead Total P 3,125 P 1,490 P 1,320 P
Current cost 186,145 Total costs P203,880 Divided by EP Unit cost 2.18
86,120 P 97,920
21,835 P 24,960
96,000 P 1.02
96,000 P 0.26
43,510 P45,000 90,000 P 0.50
34,680 P 36,000 90,000 P 0.40
P
2) Completed & transferred ( 86,000 x 2.18) 187,480 3)
P
IP end Cost from prec. Dept (10,000 x 1.02)
P
10,200 Materials ( 10,000 x 0.26) Labor ( 4,000 x 0.50)
2,600
Overhead ( 4,00 x 0.40)
1,600 P
2,000 16,400 Problem 15 1) Units received.
60,000
Units completed 50,000 100% 50,000 100% 50,000 Units IP beg. 9,000 100% 9,000 50% 4,500 Units lost – abnormal 1,000 ______ ______ 60,000 59,000 54,500 Cost from prec. Dept. 212,400 3.54 Materials 84,370 1.43 Coversion 129,710 2.38 426,480 7.35 2) Factory OH 3,540
( 1,000 x 3.54)
P
3) Completed & transf. (50,000 x 7.35) 367,500 4)
IP end Cost from prec. Dept ( 9,000 x 3.54) 31,860 Materials ( 9,000 x 1.43) Conversion ( 4,500 x 2.38)
55.440
12,870 10,710
Problem 16 – Bewitched Co. 1)
Cost per unit = 122,360/19000
=
6.44
Completed & transferred From IP beg. Cost last month Cost added ( 1,000 x 1.45) Received & completed ( 14,000 x 6.45) Unit cost Cost from preceding dept. M,L,O Units completed ( 19,000) From IP beg. From units received Units IP end 2)
30,610 1,450 90,300 122.360
110,000/22,000 30,450 /21,000
5.00 1.45
5,000 1/5 1,000 14,000 100% 14,000 8,000 ¾ 6,000 27,000 21,000
IP end Cost from preceding ( 8,000 x 5) M, L, O ( 6,000 x 1.45)
Problem 17 – Nicole Company Units IP beg. Units received
= = 6,45
40,000 8,700 48,700
1,400 14,000 15,400
Units Completed & transf. Units IP end Units lost – normal Units lost – abnormal
11,200 100% 11,200 100% 11,200 3,500 100% 3,500 40% 1,400 560 100% 560 100% 560 140 100% 140 100%
140 15,400 1) Completed & transf. ( 11,200 x 9) + (560 x 9) 105,840 2)
FOC
( 140 x 9)
15,430
13,300 P 1,250
3)
IP end Cost from prec dept. ( 3,500 x 5) 17,500 Materials ( 3,500 x 1) Conversion ( 1,400 x 3)
3,500 4,200
26,200 Problem 18 - Samahan Inc. 1) Units IP end ( 500 x 50% x 1.32)
P 33,000
2)
Finished goods, end ( 700 x 132)
P 92,400
3)
From FG beg. 600 uittz From units completed – IP beg. 1,250 “ From units received and completed 800 “
P 76,800 161,000
105600 Cost of goods sold
2,650
Or Total available for sale FG beg. 600 units Completed from IP beg. 1,250 Completed from started 1,500 x 132 Total goods available for sale 435,800 Less: FG Inventory Cost of goods sold
P 343,400
P 76,800 161,000 198,000 92,400 P 343,400
Computation of equivalent production Units IP beg. 1,250 Units started 2,000 3,250 Units completed (2,750) IP beg. 1,250 20% 250 Started & completed 1,500 100% 1,500 Units IP end 500 50% 250 3,250 2,000 Unit cost ( 264000/2000 = Completed & transferred IP beg. Cost last month 128,000
132.00
P
Cost added ( 250 x 132) Cost of IP beg. upon completion
33.000 P
161,000 Units started & completed ( 1,500 x 132)
P
198,000 Problem 19 - Michelle Company Department 1 Actual Materials Conversion Conversion Started or received 60,000 Comp. & transf. 40,000 IP end
Department 2 Actual Materials 45,000
45,000
45,000
45,000
40,000
40,000
15,000 60,000
15,000 60,000
9,000 54,000
5,000 45,000
5,000 45,000
4,000
44,000 Costs charged to the dept. Cost from preceding dept. Cost added in the dept. Materials 90,000 1,50 Labor 64,800 1.20 Overhead 59400 1.10 Total added 214,200 3.80 Total costs 214,200 3.80 Costs accounted for as follows Comp. & transf. ( 45,000 x 3.80) 171,000 354,000 IP beg Cost from prec dept Mat. ( 15,000 x 1.50) 22,500 Labor ( 9,000 x 1.20) 10,800 OH ( 9,000 x 1.10) 9,900 43,200 41,700 Total costs as accounted for 214,200 395,700 Journal entries 1. Materials Accounts payable 2.
Work in process – Dept. 1 Work in process – Dept. 2 Materials
171,000
3.80
112,500 2.50 61,600 1.40 50,600 1.15 224,700 5.05 395,700 8.85 (40,000 x 8.85) (5,000 x 3.80) 19,000 (5,000 x 2.50) 12,500 (4,000 x 1.40) 5,600 (4,000 x 1.15) 4,600
180,000 180,000 90,000 112,500 202,500
3.
Payroll Accrued payroll
125,600 125,600
4.
Work in process – Dept. 1 Work in process – Dept. 2 Factory OH Payroll
64,800 61,600 2,200 128,600
5.
Work in process – Dept. 1 Work in process – Dept. 2 Factory OH Applied
59,400 50,600 110,000
6.
Work in process – Dept. 2 171,000 Work in process – Dept. 1 171,000
7.
Finished goods 354,000 Work in process – Dept. 2 354,000
8.
Accounts receivable Sales
600,000 600000
Cost of goods sold 252,000 Finished goods 75,000 + (20,000 x 8.85)
252,000
Michelle Company Cost of Goods sold Statement For the month of June, 2008 Direct materials used Materials, June 1 Purchases Total available for use Less: Materials, June 30 Direct labor Factory overhead Total manufacturing costs Less: Work in process, June 30 Cost of goods manufactured 354,000 Finished goods, June 1 75,000 Total goods available for sale 429,000
P 50,000 180,000 230,000 27,500 P 202,500 126,400 110,000 438,900 84,900
Less: Finished goods, June 30 177,000 Cost of goods sold Multiple choice (problems) 1. A 11. B 2. A 12. C 3. D 13 A 4. C 14. C 5. A 15. C 6. A 16 B 7. A 17. A 8. C 18. A 9. D 19. A 10. C 20. A
21. A 22. D 23. C 24. D 25. B 26 A 27. B 28. B 29 C 30. B
P 2,52,000
31. C
CHAPTER 11 –JOINT PRODUCTS/BY-PRODUCTS TRUE/FALSE 1. T 2. F 3. F 4. T 5. T
6. T 7. T 8. F 9. T 10.T
Problem 1 – Owen Company 1. Market Value method Product Units Produced MVat SO JC A 20,000 4.00 B 32,000 1.75 C 36,000 3.00 75,600 D 24,000 2.75 46,200
11. T 12, F 13. T 14. T 15. F
Total MV Percentage 80,000 56,000 108,000
70%
56,000 39,200
66,000
310,000 217,000 2. Average Unit Cost Method Product Units Produced Average Unit Cost A 20,000 1.9375 B 32,000 C 36,000 D 24,000 3.Weighted average method
Share in
Share in JC 38,750 62,000 69,750 46,500 217,000
Product A B C D
Units Produced WF Total WF Cost/WF Share in JC 20,000 3.0 60,000 .3875 23,250 32,000 5.5 176,000 68,200 36,000 5.0 180,000 69,750 24,000 6.0 144,000 55,800 217,000
Problem 2 - Meadows Company a. Sales value at split-off method Product SV at SO Percentage A 88,000 60% B 77,000 C 55,000 b. Physical units method Product Units Produced A 13,200 B 8,800 C 4,400
Page 2 Problem 3 – Anchor Company 1. Market value method Product SV at SO Percentage A 420,000 60% 340,000 B 270,000 192,000 C 60,000 48,000
Share in JC 52,800 46,200 33,000 132,000
Average UC Share in JC 5.00 66,000 44,000 22,000 132,000
Share in JC Add’l Cost 252,000 88,000 162,000
30,000
36,000
12,000
450,000 580,000 2. Average unit cost method Product Units Produced Ave UC Share in JC Cost A 50,000 4.50 225,000 313.000 B 40,000 180,000 210,000 C 10,000 45,000 57,000
Total Cost
130,000 Add’l Cost 88,000 30,000 12,000
Total
450,000
130,000
580,000 Problem 4 – Laguna Chemical Company 1) a) - Revenue from by-product shown as additional sales Sales Main product 180,000 By-product 1,000 181,000 Less: Cost of goods sold Materials 30,000 Labor 17,400 Overhead 17,400 Cost of goods manufactured 64,800 Less: Inventory, end 6,480 58,320 Gross profit 122,680 Less: Selling and administrative expenses 54,000 Net Income 68,680 b)
Revenue from by-product shown as deduction from cost of goods sold of
MP Sales Main product Less: Cost of goods sold Materials Labor Overhead Cost of goods manufactured Less: Inventory, end Cost of goods sold Less: Revenue from by-product Gross profit Less: Selling and administrative expenses
180,000 30,000 17,400 17,400 64,800 6,480 58,320 1,000
57,320 122,680
54,000 Net Income
Page 3
68,680
c)
Revenue from by-product shown as other income Sales Main product 180,000 Less: Cost of goods sold Materials 30,000 Labor 17,400 Overhead 17,400 Cost of goods manufactured 64,800 Less: Inventory, end 6,480 Cost of goods sold 58,320 Gross profit 121,680 Less: Selling and administrative expenses 54,000 Net operating icome 67,680 Other income – Revenue from by-product 1,000 Net Income 68,680
2. Revenue from by-product shown as deduction from production cost of main product Sales Main product Less: Cost of goods sold Materials Labor Overhead Total mfg. cost/cofg manufactured Less: Rev. from by-product Net manufacturing cost Less: Inventory, end Cost of goods sold Gross profit Less: Selling and administrative expenses Net income Problem 5 – Fisher Company 1, By-product A Sales value P 6,000 Mfg. cost after separation ( 1,100) Marketing & adm. Exp. ( 750) Desired profit ( 900) Share in the joint cost 3,250
180,000 30,000 17,400 17,400 64,800 1,000 63,800 6,380 57,420 122,580 54,000 68,580
By-product B P 3,500 ( 900) ( 500) ( 420) 1,680
Total manufacturing cost before separation or joint cost Share of by-product A Share of by-product B
37,500 ( 3,250) ( 1,680)
Share of main product in the mfg. cost before separation
Page 4 2. Main Product Byproduct B Sales 75,000 Less: Cost of goods sold Share in joint cost 32,750 Cost after separation 11,500 44,250 2,580 Gross profit 30,750 Less: Marketing & Adm. Exp. 6,000 500 Net Income 24,750 420 Problem 6 - Eternity Company 1. Sales value – Z Further processing cost Marketing & adm. Exp. Desired profit Share of Z in the joint cost
32,570
By-product A 6,000
3,500
3,250 1,100 4,350
1,680 900
1,650
920 750 900
12,000 ( 4.000) ( 2,000) ( 2,000) 4,000
Hypothetical MV 2. Product Units Per Unit Total HMV Share in JC X 8,000 20-5 120,000 80,000 Y 10,000 25-7 180,000 120,000 300,000 200,000 Problem 7 – North Avenue Products Company 1. East Sales 17,500 Less: Cost of goods sold Share in Joint cost 6,480 Cost after split-off 3,000 3,000 Total mfg. cost 9,480 Less: Inventory end 1,580 7,900 10,960
Percentage 40% 60%
West 8,500
Total 26,000
3,600
10,080 -
3,600 540
13,080 3,060 2,120
Gross profit
9,600
5,440
15.040 Less: Selling & Adm. Exp.
3,500
1,700
Net income
6,1 00
3,740
5,200 9,840 2. Schedule allocating the joint cost to “East” and “West” Hypothetical MV Products Units Produced Per Unit Total Percentage Share in JC East 3,000 7.00 – 1,00 18,000 36% 6,480 West 2,000 5.00 10,000 3,600 28,000 10,080 Total joint cost Less: Net revenue of by-product Sales value 200 Less: Selling & adm. Exp ( 20) Net joint cost to be allocated
10,260.00 180.00 10,080.00
Page 5 Problem 8 Products X Y Z
Sales value at SO 138,900 69,100 42,000 250,000
Percentage 55.56%
Share in JC 100,000
27.64% 49,760 16.80% _30,240 100.00% 180,000
42000/250,000 = 16.80% x 180,000 100,000/180,000 = 55.56% x 250,000 = 138,900 100% - 55.56% - 16.80% = 27.64% Problem 9 - Magnolia Company 1) Joint cost allocated, if C is treated as a main product. Products Sales Value at FP Add’l cost HMV Percentage Share in JC A 250,000 25,000 225,000 B 175,000 20,000 155,000
C
12,200
Multiple choice – Theory 1. C 2. D 3. A 4. D 5. B
-
6. 7. 8. 9. 10.
Multiple choice – Problems 1. B. 2. D 3. C 4. D 5. DECREASE – 90,000 6. B 7. C 8. A 9. C. 10. B.
12,200 392.200
D B C A C 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
11. 12. 13. 14. 15. A B C B C D D D A B
C C A A B 21. 22. 23. 24. 25. 26. 27.
D A C C C D C
CHAPTER 12 - STANDARD COSTING Problem 1 1. Actual price Std. price Difference X Act. Qty. MPV 3 Actual rate Std. rate Difference X Actual Hrs. Labor rate var.
P 2.52 ( 2.50) 0.02 4,450 89.00 U P 3.00 ( 3.10) ( 0.10) 3,150 ( 315) F
Problem 2 1. Actual price (9,540/3,600) 2.65 Std. price (2.75) Difference (0.10) X Actual quantity 3,600 MPV ( 360) F
2/. Actual qty. used 4.450 Std. qty. (4,050) Difference 400 x Std. price x 2.50 MQV 1.000 U 4. Actual hours 3,150 Std. hours ( 3,000) Difference 150 x Std. rate 3.10 LEV 465 U 2. Actual qty. used 3,200 Std. qty ( 1,500 x2)(3,000) Difference 200 x Std. price 2.75 MQV 550 U
2. Actual rate (5100/340) Std. rate Difference 5. Actual hrs. Std. hrs. Difference X Variable rate Variable efficiency
15.00 15.00 0
4. Actual hrs. 340 Std. hrs. (1,500 x .2) (300) Difference 40 X Std. rate 15.00 LEV 600 U
340 ( 300) 40 7.00 280 U
Problem 3 Fixed Variable Total
Total 5,000 7,500 12,500
5,000 DLHrs. Per DLHr 1.00 1.50 2.50
Std. hrs./unit = 5,000 DLHrs.. 4,000 units
Materials 1. Actual price P 1.02 2. Std. price ( 1,00) Difference .02 X actual qty. 7,200 MPV 144 U Labor 1. Actual rate (33,750/4,500) 7,50 2/ Std. rate ( 8.00) Difference ( 0.50) X actual hrs. 4,500 LRV (2,250) F Factory overhead 1. Actual overhead Less: Budget allowed on std. hrs. Fixed 5,000 Variable (4,375 x 1.50) 6,562.50 Controllable variance 2. Budget allowed on std hrs. Less: OH applied to production (4,3,75 x 2.50) Volume variance
= 1.25 Hrs./unit Actual qty. Std.(3,500 x 2) Difference x Std. price MQV
7,200 7,000 200 1.00 200 U
Actual hrs. 4,500 Std. hrs. (3,500 x 1.25) 4,375 Difference 125 x Std. rate 8.00 LEV 1.000 11.250.00 11,562.50 ( 312.50) 11,562.50 10,937.50 625.00
Problem 4 Fixed
Total 620,000
155,000 DLHrs. Per DLHr 4.00 (4 x 155,000)
Std. hrs./unit = 10.00/4
Variable 465,000 Total 1,085,000
3.00 7.00
(465,000/155,000)
1. Actual variable overhead Less: AH x Variable rate ( 148,000 x 3) Variable spending variance
= 2.5 Hrs.
475,000 444,000 31,000 U
AH x Variable rate Less: Std. hrs. x V rate ( 60,000 x 2.5 x 3) Variable efficiency variance
444,000 450,000 ( 6,000) F
2. Actual fixed overhead Less: Fixed overhead at normal capacity Fixed spending variance
632,500 620,000 12,500 U
Fixed overhead at normal capacity Less: Std. hrs. x fixed rate (150,000 x 4) Fixed volume variance 3. Actual factory overhead (475,000 + 632,500) Less: Budget allowed on std. hrs. Fixed 620,000 Variable ( 150,000 x 3) 450,000 Controllable variance Budget allowed on std. hrs Less: Std. hrs. x OH rate (150,000 x 7) Volume variance 4. Actual factory overhead Less: Budget allowed on actual hrs. Fixed Variable (148,000 x 3) Spending variance
620,000 600,000 20,000 U 1,107,500 1,070,000 37,500 U 1,070,000 1,050,000 20,000 U 1,107,500
620,000 444,000
1,064,000 43,500 U
Budget allowed on actual hrs. Less: Budget allowed on std. hrs. Efficiency variance
1,064,000 1,070,000 ( 6,000) F
Budget allowed on std. hrs. Less: Std. hrs. x FO rate (150,000 x 7) Volume variance
1,070,000 1,050,000 20,000 U
5. Spending variance Variable efficiency variance
43,500 U (
6,000) F
Actual hours Less: Standard hours Difference X Fixed overhead rate Fixed efficiency variance
148,000 150,000 ( 2,000) 4.00 ( 8,000) F
Budget allowed on actual hours Less: Actual hrs. x factory OH rate 148,000 x 7 Idle capacity variance
1,064,000 1,036,000 28,000 U
Problem 5 Additional information - Actual materials used – 1,200,000 pounds. Materials added 100% at the beginning Units completed 40,000 From in process, beg. 10,000 20% 2,000 From started 30,000 100% 30,000 100% 30,000 Units in process, end 20,000 100% 20,000 40% 8,000 Total 60,000 50,000 40,000
Materials Actual price Less: Std. price Difference X Actual mat. Purchased Mat. Price variance
1.20 1.00 0.20 2,000,000 400,000 U
Actual qty. used 1,200,000 Less: Std. qty. 1,000,000 Difference 200,000 x Std. price 1.00_ Mat. Usage variance 200,000 U
Labor Actual rate Less: Std. rate Difference X Actual hrs. Labor rate variance
14.00 15.00 ( 1.00) 60,000 ( 60,000)
Actual hours Less: Std. hours Difference x Std. rate Labor efficiency
Factory overhead Actual factory overhead ( 280,000 + 83,000) Less: Budget allowed on std. hrs. Fixed Variable (40,000 x 5) Controllable variance
60,000 40,000 20,000 15.00 300,000 363,000
80,000 200,000
280,000 123,000
-
Budget allowed on std. hrs. Less: Overhead applied (40,000 x 7) Volume variance Problem 6 Materials Actual price 1.05 Less: Std. price 1.00 Difference 0.05 X Actual qty. (63,525/1.05) 60,500 Mat. Price variance 3,025
280,000 280,000 -
Actual qty. used 60,500 Less: Std. qty. (5,000 x 12) 60,000 Difference 500 x Std. price 1.00 Mat. Qty. variance 500
Labor Actual rate Less: Std. price Difference X Actual hrs.(96,075/9.15) Labor rate variance
9.15 9.00 0.15 10.500 1,575
Actual hours Less: Std. hrs. (5,000 x 2) Difference x Std. rate Labor efficiency
144,000 DLHrs. Per Hour 2.00 2.50 4.50
Total Fixed 288,000 Variable 360,000 Total 648,000 Factory overhead Actual factory overhead (27,000 + 24,500) 51,500 Less: Budget allowed on std. hrs. Fixed (288,000/12) 24,000 Variable ( 10,000 x 2.50) 25,000 49,000 Controllable variance 2,500 B udget allowed on std. hours Less: Std. hrs. x std. rate (10,000 x 4.50) Volume variance 1.
2.
49,000 45,000 4,000
Materials ( 60,500 x 1.00) Material price variance Accounts payable
60,500 3,025
Work in process (5,000 x 12 x 1) Material quantity variance
60,000 500
63,525
10,500 10,000 500 9.00 4,500
Materials 3. 4.
5. 6. 7.
60,500
Payroll Accrued payroll
96,075
Work in process (5,000 x 2 x 9.00) Labor rate variance Labor efficiency variance Payroll
90,000 1,575 4,500
Factory Overhead Control Misc, Accounts
51,500
Work in process Factory overhead applied
45,000
Factory overhead applied Factory overhead - Controllable variance Factory overhead - Volume variance Factory overhead control
45,000 2,500 4,000
96,075
96,075 51,500 45,000
51,500
8.
Finished goods (5,000 x 39) Work in process
9.
Accounts receivable (4,500 x 100) Sales
450,000 450,000
10.
Cost of Goods sold ( 4,500 x 39) Finished goods
175,500 175,500
11.
Cost of goods sold 16,100 Material price variance 3,025 Material quantity variance 500 Labor rate variance 1,575 Labor efficiency variance 4,500 Factory overhead – controllable variance 2,500 Factory overhead – volume variance 4,000
Problem 7 1.
2.
Actual hours Less: Std. hrs. Difference X Variable rate Variable efficiency Actual variable overhead
195,000 195,000
101,000 101,300 (300) 3_ (900) 303,750
3.
Less: Variable spending variance Actual hrs. x variable rate Divide by variable rate Actual hrs.
750 303,000 3.00 101,000
Fixed overhead at normal capacity Les: Overhead applied to production Fixed volume variance
295,000 398,835_ ( 3,835)
Actual fixed overhead Less: Fixed spending Fixed overhead at normal capacity
299,950 4,950 295,000
Actual hours Less: Standard hours Difference X Standard rate Labor efficiency variance
11,120 10,000 1,120 3.75 4.200
Problem 8
Multiple choice 1. C 2. A 3. C 4. C 5. B 6. D 7. B 8. C 9. B 10. 12,000 Unf 11. B 12. B 13. D 14. C 15. C 16. C 17. D 18. C 19. D 20. D 21. B
22. 23. 24. 25. 26. 27. 28. 29. 30.
A D D B D 400 CREDIT D D NOT ENOUGH INFORMATION
