Chapter 1 – Cost Concepts, Classifications and Accounting Cycle Summary of Answers Exercise 1-1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Administrative Expense Factory Overhead Factory Overhead Direct Labor Factory Overhead Selling Expenses Factory Overhead Factory Overhead Factory Overhead Selling Expenses
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Selling Expenses Selling Expenses Factory Overhead Selling Expenses Factory Overhead Selling Expenses Selling Expenses Factory Overhead Selling Expenses Administrative Expenses
Exercise 1-2 1. Product/Service Costs 2. Product/Service Costs 3. Period Costs 4. Period Costs 5. Period Costs 6. Period Costs 7. Product/Service Costs 8. Period Costs 9. Product/Service Costs 10. Period Costs
11. Product/Service Costs 12. Product/Service Costs 13. Product/Service Costs 14. Product/Service Costs 15. Period Costs 16. Product/Service Costs 17. Period Costs 18. Product/Service Costs 19. Product/Service Costs 20. N/A
Exercise 1-3 1. 2. 3. 4.
hfajkak P0.125 Highest: 3750 15000
Lowest: 1500
Exercise 1-4 1. a, P 352820 b. 1. P 140000 2. P 113205 3. P 84904 c. P 339615
2. Journal Entries
d. P 314711 e. P 472067 f. P 157356
21. Product/Service Costs 22. N/A 23. N/A 24. Product/Service Costs 25. N/A
a. Raw Materials Accounts Payable
240000
b. Work in Process Manufacturing Overhead Raw Materials
168000 12000
c. Factory Payroll Accrued Payroll
150000
Work in Process Manufacturing Overhead Work in Process
120000 30000
240000
180000
150000
150000
d. Manufacturing Overhead Accumulated Depreciation
12000 12000
e. Manufacturing Overhead Taxes Payable
1500
f. Manufacturing Overhead Prepaid Insurance
4320
Manufacturing Overhead Utilities Payable
5 000
1500
4320
5000
2. (Financial Statement) Exercise 1-5
Exercise 1-6
Test Material 1.1 Multiple Choice Theories
a. b. c. d. e. f. g. h. i.
a. P600 000 b. P 252 000 c. P 682 000 d. P190 960
1. B 2. B 3. C 4. C 5 A 6. B 7. B 8. B 9. B 10. C
P 86 500 P 12 500 P7 500 P80 500 P24 500 P11 000 P55 000 P15 000 P148 500
Exercise 1-7 (Table 1.3)
Exercise 1-7 (below, Table 1.3)
11. D 12. D 13. C 14. D 15. A 16. D 17. C 18. C 19 .D 20. D
21. C 22. D 23. C 24. D 25. A 26. C 27. D 28. A 29. C 30. D
Item Number 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Other Category 16. Other Category 17. Other Category 18. 19. 20. Total
Direct Materials P 50 000 20 000
Direct Labor
True True False False False True False False False False
P 2 500 P 15 000 5 000 1 200 28 000 2 800 8 500 3 500 9 000 800 2 400
5 000 P 103 000
1 500 7 500 P 37 500
P 15 000 Test Material 1-3
11. False 12. True 13. False 14. True 15. True 16. False 17. False 18. False 19. True 20. False
11. P 930000 12. P 127000 13. P 4500 14. P 88500 15 P 742500 16. P 1049000 17. P 1108500
Period Cost
P 10 000
Test Material 1-2 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Manufacturing OH
1. Direct Material 2. Direct Material 3. Factory Overhead 4. Period Costs 5. Direct Labor 6. Period Costs 7. Period Costs 8. Direct Material 9. Factory Overhead 10. Period Costs
Test Material 1-5 1. C 11. 2. D 12. 3. D 13. 4. C 14. 5. A 15. 6. A 16. 7. B 17.
A D C C B D B
P 17 200 Test Material 1-4
11. Factory Overhead 12. Factory Overhead 13. Factory Overhead 14. Factory Overhead 15. Period Costs
Test Material 1-6 1. C 11. B 2. A 12. C 3. B 13. A 4. B 14. B 5. C 15. A 6. B 16. C 7. D 17. B
1. P2 2. P19171.84 3. P3432000 4. P60000 5. P9000 6. P12000 7. P215000 8. P475000 9. P3110000 10. P3450000 21. B 22. C 23. D 24. C
18. P 156200 19. P 41700 20. P 3432000
8. B 9. C 10.
A
18. B 19. A 20. C
8. B 9. B 10.A
18. B 19 20.B
B
______________________________________________________________________________ COMPUTATIONS: Exercise 1-1 Ex 1-1. Cost classification. Classify the following as direct materials (DM) , direct labor (DL) , factory overhead (FOH) , administrative (AD) ,and selling (SE) expenses by putting a check on the appropriate column.
DM
DL
FOH
1
Wages of company officials other the plant supervisor.
2
Wages of raw material inventory clerk.
∕
3
Wages of finished goods inventory clerk.
∕
4
9
Wages of ironworker in a construction company. Transportation and representation allowance of plant managers and supervisors. Transportation and representation allowance of sales managers. Wood glue and other related adhesives used by furniture factories. Buttons, threads and zippers used by ready to wear manufacturing company. Lubricating oil used by factories in their operations.
10
Gas and oil used by the company president.
5 6 7 8
Gas and oil used by trucking company. Electric and power consumption of the 12 administrative office. Electric and power consumption of factory 13 companies. Depreciation of delivery truck of a manufacturing company used un delivering finished goods to 14 customers.
16 17 18 19
Cloth used by a ready to wear factory. Cloth used by advertising companies in making billboards. Cost of daily advertisements in local newspaper regarding new product line. Overtime pay of the employee who repairs the company’s copier. Cost of renting a private helicopter to fly along the grandstand pulling a banner advertising a new product.
SE
∕
∕ ∕ ∕ ∕ ∕ ∕ ∕
11
15
AD
∕ ∕ ∕ ∕ ∕ ∕ ∕ ∕ ∕
20
Cost of dishes broken by restaurant servers.
∕
Ex 1-2 Cost Classification. Classify each cost as product cost or period cost by putting a check mark on the appropriate column. If the item is not appropriate to be the product or period costs , write N/A to both columns.
Product Cost 1
Period Cost
∕
2
Depreciation of plant and machineries. Depreciation of sports equipment used by sports and fitness center.
3
Depreciation of delivery equipment of trading companies.
∕
4
Depreciation of service vehicle used by sales person.
5
Depreciation of office equipments.
6
Paper and toner used for office copier machine.
∕
7
Paper used by printing company.
∕
8
Paper and plastic bags used by supermarkets.
∕
9
Bonuses paid to factory workers of an efficient performance.
10
Transportation costs of goods delivered to customers.
11
Transportation costs of goods purchased from suppliers.
12
15
Cost of medical supplies of a hospital. Cost of continuing education of a resident physician in a hospital. Transportation expenses of a resident doctor in attending seminar abroad. Costs of goods served to the visitors of the company president.
16
Costs of food served by restaurant owners to their customers
17
Gas and oil consumed by sales manager.
13 14
∕
∕ ∕
∕ ∕ ∕ ∕ ∕ ∕ ∕ ∕ ∕
18
Gas and oil consumed by plant machineries
∕
19
Gas and oil consumed by trucking companies.
∕
20
Gas and oil consumed by the company president. Cost of insurance intended for the workers of a construction company. Cost of newspaper ads to the announcement of new office location. Salaries and compensation and other benefits paid to Human Resource Manager. Salaries and compensations and other benefits paid to workers of a factory. Maintenance costs for the family vehicle of the company executive officer.
21 22 23 24 25
∕ ∕ ∕ ∕ ∕ ∕
Ex 1-3 High-Low Method. Dagupan Trans Inc. has incurred the following bus maintenance costs during the past six months. Miles Travelled
Maintenance
Costs January
12,750
17,100
February
15,900
17,400
March
19,050
17,550
April
22,500
18,000
May
30,000
18,750
June
12,000
16,500
Required: Using high-low method to separate mixed cost, estimate the total fixed costs component of the maintenance costs. Highest Lowest Difference
Machine Cost 18750 -16500 2250
2. Variable Cost per Unit: 2250 / 18000 = 0.125
Miles Traveled 30000 12000 18000
3. Compute Variable Cost at Highest and Lowest Level of Activity Highest Level Lowest Level
30000 * 0.125 = 3750 12000 * 0.125 = 1500
4. Determining Fixed Cost at each level of activity Highest Level Lowest Level
18750 - 3750 = 15000 16500 - 1500 = 15000
Ex 1-4 Actual Costing Method During the month of July, the following transactions were completed and reported by Bubbles Manufacturing Company. a. Raw materials purchased on account, P240,000 b. Materials requisitioned for the month was P180,000 , P12,000 of which were factory supplies. c. Factory payroll for the month was P150,000 of which P30,000 was for indirect laborers. d. Depreciation on factory plant and equipment for the month is P12,000 e. Factory taxes amounted to P1,500 f. Factory insurance expired amounted to P4,320 g. Factory utilities for the month amounted to P5,000 Additional Information: a. Actual overhead is charged to production. b. 75% of the jobs put into process are completed. c. All beginning inventory plus 75% of the goods completed during the period were delivered to customers at 50% mark-up cost. The company’s terms on sales are 30 days. Inventories reported by the company at the beginning of the month are: Raw Materials
P80,000
Work in Process
P100,000
Finished Goods
P60,000
REQUIRED: (1) Determine the following: a. The total manufacturing cost for the period. P 352820 b. The balances of the inventory accounts at the end of the month. 1. Raw Materials P 140000 2. Work in Process P 113205
3. Finished Goods P 84904 c. The costs of goods manufactured amounts to P 339615 d. The costs of goods sold amounts to P 314711 e. The sales price of the goods sold amounts to P 472067 f. Gross profit for the period amounts to P 157356 (2) Journal Entries to record the above (Use a yellow pad for your entries.) (3) Prepare a Statement of Costs of Goods Manufactured and Sold, in good form
a. RM inventory, July 1 Add: Purchases Raw Materials Available Less: RM inventory, July 31 (80000+240000-180000) Indirect Material Raw Materials Direct Labor Manufacturing Overhead Total Manufacturing Cost
P 80000 240000 P 320000
b. 1. RM inventory, July 1 Add: Purchases Materials Used RM inventory, July 31
P 80000 240000 -180000 P 140000
2. WIP, July 1 Direct Material Direct Labor Manufacturing Overhead Total Cost of Work put into Process Multiply by WIP, July 31
P 100000 168000 120000 64820 P 452820 25% P 113205
3. Cost of Goods Manufactured Multiply by Finished Goods
P 339615 25% P 84904
c. Total Cost of Work put into Process Multiply by Cost of Goods Manufactured
P 452820 75% P 339615
-140000 -12000 P 168000 120000 64820 P 352820
d. Finished Goods, July 1 CGM (339615*75%) Cost of Goods Sold
P 60000 254711 P 314711
e. (Journal Entries) f. Bubbles Manufacturing Company Statement of Cost of Goods Sold July 31, 2012 Raw Materials Used: RM iventory, July 1 Add: Purchases Raw Materials Less: Inventory, July 31 Indirect Materials Used Direct Labor Manufacturing Overhead Indirect Materials Used Indirect Labor Depreciation Insurance others Total Manufacturing Costs Add: Work in Process, July 1 Total Cost of work put into Process Less: Work in Process, July 31 Cost of Goods Manufactured Add: Finished Goods, July 1 Goods Available for sale Less: Finished Goods, July 31 Cost of Goods Sold
P 80000 240000 P 320000 P 140000 12000
152000 P 168000 120000 P 12000 30000 12000 4320 6500
64820 P 352820 100000 P 452820 -113205 P 339615 60000 P 399615 84904 P 314711
EXERCISE 1-5 a.) Direct Materials Used Direct Labor Manufacturing Overhead Total Manufacturing Cost
P 41 500 15 000 30 000 P 86 500
b.) Total Manufacturing Cost
P 86 500
Add: Work in Process, Beginning Total Cost of Goods placed into process Less: Cost of Goods Manufactured Work in Process, Ending Inventory
5 000 P 91 500 (79 000) P 12 500
c.) Cost of Goods Available for Sale Less: Cost of Goods Manufactured Finished Goods, Beginning
P 86 500 (79 000) P 7 500
d.) Cost of Goods Available for Sale Less: Finished Goods, Ending Inventory Cost of Goods Sold
P 86 500 (6 000) P 80 500
e.) Sales Less: Sales Discount Net Sales Less: Cost of Goods Sold Gross Profit
P 112 500 (7 500) P 105 000 80 500 P 24 500
f.) Gross Profit Less: Operating Expenses Net Income
P 24 500 (13 500) P 11 000
g.) Total Manufacturing Cost Less: Direct Labor Manufacturing Overhead Direct Materials Used
P 100 000 (20 000) (25 000) P 55 000
h.) Cost of Goods Manufactured Add: Work in Process, Ending Inventory Total Cost of Goods placed Into process Less: Total Manufacturing Cost Work in Process, Beginning
P 105 000 10 000 P 115 000 (100 000) P 15 000
i.) Gross Profit Add: Cost of Goods Sold Sales Discount Sales
P 30 000 112 000 6 000 P 148 500
j.) Cost of Goods Manufactured Finished Goods, Beginning Cost of Goods Available for Sale
P 105 000 20 000 P 125 000
k.) Cost of Goods Available for Sale Less: Finished Goods, Ending Inventory Cost of Goods Sold
P 125 000 12 500 P 112 500
l.) Gross Profit Less: Operating Expenses Net Income
P 30 000 (16 000) P 14 000
EXERCISE 1-6 a.) Direct Materials Issued to Production Direct Labor (150 000 x 80%) Total Prime Cost for the Period
P 480 000 120 000 P 600 000
b.) Indirect Materials Issued Indirect Labor (150 000 x 20%) Depreciation of Sewing and Comp. equipment Utilities Paid Factory Insurance Expired Factory Rent (Net of 10 000 deposit & 5000 adv. rental) Total Manufacturing Overhead Add: Direct Labor (50 000 x 80%) Total Conversion Cost for the Period
P 4 500 30 000 8 000 22 000 7 500 60 000 P 132 000 120 000 P 252 000
c.) Direct Materials Issued to Production Direct Labor (150 000 x 80%) Manufacturing Overhead Total Manufacturing Cost Less: Work in Process, Ending Inventory Cost of Goods Manufactured for the year
P 480 000 120 000 132 000 P 732 000 (50 000) P 682 000
d.) Cost of Goods Manufactured for the year Multiply by: Percentage of units sold Cost of Goods Sold
P 682 000 80% P 545 600
Multiply by: Percentage of Gross profit Gross Profit for the Period
35% P 190 960
EXERCISE 1-7 Item Number 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. Other Category 36. Other Category 37. Other Category 38. 39. 40. Total
Direct Materials
Direct Labor
Manufacturing OH
P 50 000 20 000 P 10 000 P 2 500 P 15 000 5 000 1 200 28 000 2 800 8 500 3 500 9 000 800 2 400
5 000 P 103 000
P 15 000
1 500 7 500 P 37 500
Test Material 4 1. Highest Lowest Difference
Machine hours 1200 400 800
Power costs 14400 12800 1600
VC/unit = 1600/800 = P 2 2.
Highest Lowest Difference VC/unit
Period Cost
Hrs. worked 3360 2600 760 = 3380/760 = P4.447368421
Utility costs 21440 18060 3380
P 17 200
Fixed cost: (highest) (lowest)
= 3360 x 4.447368421 = P 14943.16 = 2600 x 4.447368421 = P 11563.16
Highest
= P21440 - 14943.16 = P6496.84
Lowest
= P18060 - 11563.16 = P6496.84
Total Utility costs
= (P 2850 x 4.447368421) + 6496.84 = P 19171. 84
3. Gross Profit Cost of goods manufactured Increase in finished goods Total sales 4. Cost of fabric used in dresses
P 768000 2720000 (56000) P3432000 P 60000
5. Wages of dressmakers Wages of dress designers Direct labor
P 5000 4000 P 9000
6. Wages of the maintenance employee Cost of electricity in the shop Cost of space rental
P 2000 3500 6500
Overhead
P12000
7. Office depreciation Freight costs for goods delivered to customers Janitor’s wages for cleaning the office Total selling, general & administrative expenses Period costs
P28000 12000 10000 165000 P215000
8. Materials Direct labor
P264000 143000
Factory depreciation Freight costs for materials purchased Janitor’s wages for cleaning the production area Product costs 9. Direct material [1640000-(1640000x10%)+540000-570000] Direct labor MOH (164000+180000+360000+120000) Total factory costs
10. Total factory costs Work in process-beg. Work in process-end. Cost of goods manufactured Finished goods-beg. Finished goods-end. Cost of goods sold
50000 8000 10000 P475000 P1446000 840000 824000 P3110000
P3110000 600000 (440000) P3270000 580000 (400000) P34500000
11. Gross Profit [(3450000/75%) x 25%] Office salaries Sales salaries Net Income
P1150000 (140000) ( 80000) P 930000
12. Total factory costs (P12500+45000+90000) Cost of goods manufactured WIP, end. WIP, beg.
(P 147500) 237000 37500 P 127000
13. Cost of goods available for sale Goods produced FG, end Increase in FG
P 259500 (237000) ( 18000) P 4500
14. Sales (337500-7500) Cost of goods available for sale FG, end Gross Profit
P 330000 (259500) 18000 P 88500
15. Gross Profit Sales Discount Cost of goods sold Sales
P150000 30000 562500 P742500
16. Direct labor Direct materials MOH (110000+50000+31000+8000+5000) Total factory costs
P 350000 460000 239000 P1049000
17. Total factory costs WIP, beg. WIP, end. Cost of goods manufactured
P1049000 220000 (160500) P1108500
18. Total Factory costs (P62400 +32000+ 64000) WIP, beg. WIP, end Cost of goods manufactured
P 158400 14700 (16900) P 156200
19. Sales Cost of goods sold (156200 +12600 -10500) Gross Profit
P 200000 (158300) P 41700
20. Same answer and solution in number 3. Test Material 5 1. Direct Materials (174000-132000+1500000) Direct labor [(21000x45) + (1000x45)] Prime costs
P 1542000 990000 P 2532000 c.
2. Direct labor (21000x45) MOH [(300000 +175000 + (1.5 x 45)] Conversion costs
P 945000 542500 P 1487500 d.
3. d. Materials (3200000-180000) Labor [6900000+(2040000-320000)-2040000=6580000] [6580000+(800000 x 90%)-800000=6500000-3020000 / 160%] Overhead (2175000 x 60%)
P 3020000 P 1275000 P1305000
4. Prime Costs Direct labor (4500000/150%) Decrease in raw materials Raw material purchases
P 6750000 (3000000) ( 250000) P 3500000 c.
5. Direct material (4400000+9000000-2800000-850000) Conversion costs [6500000+1250000+560000+(1200000x60%) +(600000x60%)+(1500000x60%)+850000] WIP, beg.
P 9750000 11400000 3000000
WIP, end. Cost of goods manufactured
(2400000) P21490000 a.
6. Cost of goods manufactured FG, beg. FG, end. Cost of goods sold Divided by: Total sales
P 21490000 2400000 (2950000) P 20940000 75 % P 27920000 a.
7. c. Work in process inventory: {[7920000 / (38.50-30.80)] x 30.80} = 3520000 3520000 + 13680000 – 17400000 = decrease of 200000 Finished goods inventory: (17400000+1500000-16800000) = 2100000 2100000-1500000 = increase of 600000 8. Sales (25000 / 12.5 %) Gross profit (25000+25000) Cost of goods sold
P 200000 ( 50000) P150000 b.
9. Beginning: Materials (50000+30000) Labor (80000+60000) OH (120000+90000) Cost added: Materials (80000+50000+75000) Labor (100000+80000+110000) OH (290000 x (120000/80000) Finished goods, end
P 80000 140000 210000 P 205000 290000 435000 P1010000 c.
10. Overhead applied Overhead actual Over applied 11. Total manufacturing cost: P 975000-600000+55000-40000+15000-35000
P 435000 (420000) P 15000 a.
=
12. Total raw materials purchased: P 370000-(520000-400000)-(120000/75%)+10000-5000 =
P 370000 a. P 95000 d.
13. FG, end: P 85000+970000-110000 + (48000 x 20) + (48000 x 20 x 60%) + 90000 – 271000 +180000-(1050000/60%) = 730000 c.
14. Sales revenue: P 1050000/60% = P 1750000 x 160% = P 2800000 b. 15. Direct labor (30101.80/ 50%) MOH CC
P 60203.6 30101.8 P 90305.40 / 50% = P180610.80
P 180610.80 + 590 = P 181200.80 b. 16. RM available for used RM issued to production RM, beg. (47500-37500) Increase in RM
P 47500 (30000) (10000) P 7500 d.
17. b. Direct material (P 15000+ 33000 – 19000 – 1000) MC (P 12000+30000-40000) FG, June 30 (P 190000-140000)
P 28000 P 110000 P 50000
18. Materials (P 380000-20000) Direct labor (P 420000-40000) Prime costs
P 360000 380000 P740000 b.
19. MOH (P 380000 / 20 =P 19000 x 28) Prime costs WIP, beg. Cost of goods manufactured WIP, end
P 532000 740000 20000 940000 P 352000 a.
20. Same solution and answer in number 7.
CHAPTER 2 ACCOUNTING FOR MATERIALS Summary of Answers EXERCISE 2-1 1. Raw Materials Inventory Accounts payable 2. Work in Process Manufacturing Overhead Raw materials Inventory
541000 510000 344250 38250 382500
3. Raw Materials Inventory Work in Process Manufacturing Overhead
5900
4. Accounts payable Raw Materials inventory
4000
5100 800
4000
5. Work in process Accounts payable
50000
6. Raw materials Inventory Accounts payable
107000
7. Work in Process Manufacturing Overhead Raw Materials Inventory
120824 30200
510000 5900 107000 86400
Exercise 2-2 1. (36 000) units; (P 82 850) 2. 12 000 units; P 28 300 Exercise 2-3 1. 2 078.46 2. 69.28 3. 5.20 4. 10 392 5. 2 400 Exercise 2-5 Journal Entries 1. Raw and in Process Accounts Payable
50000
107000
151030
Raw Materials Inventory 382500 4000 150000
Exercise 2-4 1. 2 598.1 2. 11.1 3. 4 687.6 4. 3 897.6
200 000 200 000
Cost of goods sold Payroll Various Accounts
280 000
Finished goods Raw and in Process
210 000
130 000 150 000 210 000
2. Cost of goods sold Finished goods
195 000
3. Cost of goods sold Raw and in Process Finished goods
20 000
4. Raw materials Accounts Payable
200 000
Work in process Raw materials
200 000
Work in process Payroll Manufacturing overhead
130 000
Manufacturing overhead Various Accounts
150 000
Test Material 2-1 Supply the Answer 1. 1,294,000 11. P 600,000 2. 1,292,000 12. P 200,100 3. 4,640,000 13. P 131,400 4. 301,429 14. P 5. 285,000 1,160,000 6. 708,750 15. P 7. 156,200 1,637,000 8. 41,700 16. P 9. 423,100 1,629,000 10. 1,625,000 17. P(1000)
195 000 15 000 5 000 200 000 200 000 130 000 150 000 Test Material 2-1 MC Problems 1. B 1. B 2. D 2. 129700 3. C 3. A 4. D 4. C 5. D 5. C 6. D 6. B 7. A 7. A 8. B 8. D 9. A 9. C 10. A 10.36000 11.B
Test material 2-3 1. C 2. C 3. D 4. D 5. A 6. B 7. B 8. C 9. A 10. B
11. B 12. B 13. D 14. D 15. A 16. C 17. C 18. C
Exercise 2-2 Inventory, August Purchases: August
7 12 15 22 29 Raw materials available Less issuance: August 7 14 21 28 Raw materials issued Raw materials inventory, end
Units 5 000 6 000 8 000 9 000 10 000 10 000 48 000 (9 000) (9 000) (9 000) (9 000) (36 000) 12 000
Unit cost P 2.00 2.50 2.30 2.25 2.40 2.35
Amount 10 000 15 000 18 400 20 250 24 000 23 500 111 150 (20 000) (21 100) (20 300) (21 450) (82 850) 28 300
Exercise 2-3 1. Economic Order Quantity or EOQ = 2 x annual demand x cost per order Annual carrying cost per unit = 2 x 144 000 x 150 = 2 078.46 (200 x 5%) 2. Number of orders = annual requirement = 144 000 = 69.28 EOQ 2 078.46 3. Time to order = 360 days = 5.20 69.28 4. Total ordering cost = Number of orders per year x Cost per order = 69.28 x 150 = 10 392 5. (Daily usage x Lead time) + Safety stock = (400 x 5) + 400 = 2 400 Exercise 2-4 1. Economic Order Quantity or EOQ = 2 x annual demand x cost per order Annual carrying cost per unit = 2 x 84 375 x 120 = 2 598.1 3 2. Time to order = 360 days = 11. 1 32.48
*Computation for 32.48 = 84 375
2 598
3. Annual demand = 84 375 = 234.38 x 20 days = 4 687.6 360 days 360 days 4. Number of orders x Cost of placing an order = 32. 48 x 120 = 3 897.6 Exercise 2-5 1. Raw and in Process Accounts Payable
200 000
Cost of goods sold Payroll Various Accounts
280 000
Finished goods Raw and in Process
210 000
*Materials in RiP (75 000 - 45 000) Add: Purchases Less: Materials in RiP (50 000 - 30 000) Amount backflush RiP to FG 2. Cost of goods sold Finished goods *Materials in Finished goods, beg. (80 000 - 35 000) Add: Backflush Less: Materials in FG, end. (90 000 - 30 000) Amount backflush FG to CGS 3. Conversion cost in Raw and in Process, beg. Conversion cost in Raw and in Process, end. Conversion cost in finished goods, beg. Conversion cost in finished goods, end. Cost of goods sold Raw and in Process Finished goods
200 000 130 000 150 000 210 000
30 000 200 000 20 000 210 000 195 000 195 000 45 000 210 000 60 000 195 000 45 000 30 000 (15 000) 35 000 30 000 (5 000) 20 000 15 000 5 000
4. Raw materials Accounts Payable
200 000
Work in process Raw materials
200 000
200 000 200 000
Work in process Payroll Manufacturing overhead
130 000
Manufacturing overhead Various Accounts
150 000
130 000 150 000
Test Material 2-6 CHAPTER 1 – TEST MATERIAL 6 MULTIPLE CHOICE PROBLEMS 1. Direct Materials Direct Labor Manufacturing Overhead Total Factory Costs
977,400 1,691,500 1,353,200 4,022,100
2. Total Factory Costs Add : Work in Process, beginning Less : Work in Process, ending Costs of Goods Manufactured
4,022,100 354,000 (434,000) 3,942,100
3. Work in Process
4. Direct Materials Utilities Office Depreciation Rent paid Period Costs
42,200 6,960 10,000 9,600 68,760
5. Direct Materials Direct Labor Overhead Total Factory Costs
42,400 100,000 61,840 204,240
6. Gross Profit
203,840
7. Cost of Goods Sold
345,000 (3,000)
Costs of Goods Manufactured Total Factory Costs
348,000 (4,000) 344,000
8. Total Manufacturing Costs
2,081,000
9. Overhead for the year
Overhead applied by 117,000
10. Costs of Goods Manufactured
1,841,000
Chapter 3: Accounting for Factory Labor Summary of Answers Exercise 1 (Journal Entries) Exercise 3-2 1P13,936.26 2P13,208 3P1,107.82 4 (entries) Exercise 3-3 1. .P5,295.97 2..P2,549.7 3..P900 4.. P75,953.73 5.. P6,396.30 6..(entries)
Test Material 1 1. P1, 039, 000 2. P13, 340 3.P11,280 4..P2,150 5.P3530.34 6.P170.4 2. 7.P3,600,000 8.P1,000,000 9.P5,500,000 10.18,900 11. 2,250 12. 225,000 13. 270,000
Test Material 2 1. A 2. C 3. A 4. B 5. B 1. 6.A 7.B 8. C 9. A 10. D 11. B
Exercise 1 Factory payroll
106000
Withholding tax payable
9000
SSS payable
5000
Pag-ibig payable
2000
Cash
90000
Work in process
95400
Manufacturing overhead
10600
Factory Payroll
106000
Exercise 3-2 No.of Reg hrs Rate
Basic Pay
Shift OT Prem. Prem (10%) (5%)
Night Prem (10%)
Total
WHT
Net Pay
2080
129.38
1950.6
2480.4
197.94
2282.5
104
2184
310.26
1873.7
111.8
2364.2
99.86
2264.3
208
2288
160.58
2127.4
228.8
2539.7
209.8
2329.9
436.8
P13,936.26
6am-2pm Tibo, (S)
40
52
2080
Jason, (ME)
47
52
2444
40
52
2080
43
52
2236
Bianca, (S)
40
52
2080
Toni, (M)
44
52
2288
22.88
13208
75.66
36.4
2pm-10pm Rica, (Z) Princess, (S1)
16.38
10pm-6am
Total
215.8
1107.82 12828.44
1. Total Payroll, P13,936.26 2. Direct Labor, P13,208 3. Total WHT, P1,107.82 Tibo (S) Gross Pay – P2,080 Tax Due on P1,538 Add: 15% of 542 Total Jason (ME) Gross Pay – P2,480.4
P48.08 81.3 P129.38
Princess (S1) Gross Pay – P2364.18 Tax Due on P2019 Add: 15% of 345.18 Total Bianca (S) Gross Pay – P2288
P48.08 51.78 P99.86
Tax Due on P2308 Add: 20% of 172.4 Total Rica (Z) Gross Pay – P2080 Tax Due on P1346 Add: 20% of 734 Total
4. Journal Entries: Factory Payroll WHT Payable Cash
P163.46 34.48 P197.94
Tax Due on 1538 Add: 15% of 750 Total
P48.08 112.5 P160.58
P163.46 146.8 P310.26
Toni (M) Gross Pay – P2539.68 Tax Due on 2308 Add: 20% of 231.68 Total
P163.46 46.34 P209.80
13,936.26 1107.82 12,828.44
Work in Process Manufacturing Overhead Factory Payroll
13,208 728.26 13,936.26
Exercise 3-3
6am-2pm Tibo, (M1) Jason, (S) Willie, (ME) 2pm-10pm Rica, (S1) Princess, (M1) Kathy, (S) 10pm-6am Bianca, (S) Toni, (S1) Yeng, (Zero) Total *4th week 1st Shift
1st week
2nd Week
3rd Week
*4th week
Total
2280 2250 2300
2280 2150 2250
2300 2150 2190
2080 2480.4 2308.8
8940 9030.4 9048.8
2500 2480 2300
2400 2450 2300
2380 2280 2300
2184 2364.18 2544.36
9464 9574.18 9444.36
2600 2750 2600 22060
2570 2400 2300 21100
2580 2450 2480 21110
2288 2539.68 2539.68 21329.1
10038 10139.7 9919.68 85599.1
Tibo, (M1) (52php*40hrs)
2,080
Jason (S) Basic Pay (52*47) OT Prem (5.2*7) Total
2,444 36.4 2,480.8
Willie, (ME) Basic Pay (52*44) OT Prem (5.2*4) Total
2,288 20.8 2,308.8
2nd Shift with 5% Shift Premium Rica (S1) (52*1.05*40) 2,184 Princess (M1) Basic Pay (54.6*43) OT Prem (5.46*3) Total
2,347.8 16.38 2,364.18
Kathy (S) Basic Pay (54.6*46) OT Prem (5.46*6) Total
2,511.6 32.73 2,544.36
3rd Shift with 10% Night Premium Bianca (S) (52*1.1*40)
2,288
Toni (S1) Basic Pay (57.2*44) OT Prem (5.72*4) Total
2516.8 22.88 2539.68
Yeng, (Zero) Basic Pay (57.2*44) OT Prem (5.72*4) Total
2516.8 22.88 2539.68
Tibo, (M1) Jason, (S) Willie, (ME) Rica, (S1) Princess, (M1) Kathy, (S) Bianca, (S) Toni, (S1) Yeng, (Zero) Total
Gross Payroll for the month
WHT
SSS
PhilHealth
Pag-ibig
8940 9030.4 9048.8 9464 9574.18 9444.36 10038 10139.7 9919.68 85599.12
236.83 562.78 565.63 315.43 331.93 624.88 715.93 416.83 1525.73 5295.97
283.3 283.3 283.3 283.3 283.3 283.3 283.3 283.3 283.3 2549.7
100 100 100 100 100 100 100 100 100 900
100 100 100 100 100 100 100 100 100 900
Total Deductions
Net Payroll
720.13 1046.08 1048.93 798.73 815.23 1108.18 1199.23 900.13 2009.03 9645.67
8219.87 7984.32 8000.07 8665.27 8758.77 8335.82 8838.77 9239.87 7910.97 75953.73
With Holding Taxes: Tibo (M1) Gross Pay – P8,940 Tax Due on P8,750 Add: 15% of 190 Total Jason (S) Gross Pay – P9,030 Tax Due on P6,667 Add: 15% of 2,363 Total Willie (ME) Gross Pay – P9,049 Tax Due on P6,667 Add: 15% of 2382 Total Rica (S1) Gross Pay – P9,464 Tax Due on P8750
P208.33 28.5 P236.83
Princess (M1) Gross Pay – P9574 Tax Due on P8750 P208.33 Add: 15% of 824 123.6 Total P331.93
P208.33 354.45 P562.78
Kathy (S) Gross Pay – P9444 Tax Due on 6667 Add: 15% of 2777 Total
P208.33 357.3 P565.63
Bianca (S) Gross Pay – P10,038 Tax Due on 10,000 Add: 20% of 38 Total
P708.33 7.6 P715.93
P208.33
Toni (S1) Gross Pay – P10,140 Tax Due on 8750
P208.33
P208.33 416.55 P624.88
Add: 15% of 714 Total Yeng, (zero) Gross Pay – P9920 Tax Due on 5833 Add:20% of 4087 Total
107.1 P315.43
P5,295.97
2. Total SSS Deductions
P2,549.7
4. Total Net Payable
208.5 P416.83
P708.33 817.4 P1,525.73
1. Total Tax Withheld
3. Total Philhealth Deductions
Add: 15% of 1390 Total
P900 P75,953.73
5. Employer’s Share in SSS, Philhealth Medicare Payable Basic Pay of Employee, Monthly (52*8hrs*20)
P6,396.30 P8,320
SSS Range of Compensation (8,250-8,749.99) Amount Due to SSS: if SSS ER P610.70 if SSS EE P283.30 Philhealth Range of Compensation (8,000-8,499.99) Amount Due to Philhealth: if Employer’s Share If Personal Share
P100.00 P100.00
SSS ER (610.70*9) Philhealth ER (100*9) Total Employer’s Share
P5,496.3 900.00 P6,396.30
6. Factory Payroll WHT Payable SSS Payable Pag-ibig Payable Philhealth Payable Cash
85,599.12 5,295.97 2,549.70 900.00 900.00 75,593.73
Manufactuing Overhead SSS Payable Pag-ibig Payable Philhealth Payable
7,296.30
Work in Process Manufacturing Overhead Factory Payroll
20,176 1,153
5,496.30 900.00 900.00
21329.10
Test Material 1 Supply the answer. 1. Purchases of Raw Materials Add: Decrease in Raw Materials Raw Materials used Multiply by: Percentage of material charged to job Direct Material charged to the job Add: Direct Labor Labor Cost Less: Indirect Labor (550, 000*10%) Prime Cost
2. Direct Laborers Basic Pay – No. of worked hours Multiply by: Rate/hr.
P600, 000 80, 000 680, 000 80% 544, 000 550, 000 (55, 000)
268 40
P10,720
OT Premium – OT hours (268-240) Multiply by: Rate/hr. (P40*50%)
28 20
560
Supervisor Basic Pay – No. of worked hours Multiply by: Rate/hr.
42 50
P2, 100
OT Premium – OT hours (42-40) Multiply by: Rate/hr. (P50*50%) Gross Payroll
2 25
50 P13, 430
495, 000 P1, 039, 000
3. Basic Pay – No. of worked hours Multiply by: Rate/hr. OT Premium – OT hours (268-240) Multiply by: Rate/hr. (P40*50%) Amount charged to Work in Process
4. Basic Pay – No. of worked hours Multiply by: Rate/hr. OT Premium – OT hours (42-40) Multiply by: Rate/hr. (P50*50%) Amount charged to Factory Overhead
268 40
P10, 720
28 20
560 P11, 280
42 50
P2, 100 2 25
50 P2, 150
5. Regular Shift 8am- 5pm P48 Ordinary Overtime Hours 5pm - 10pm OT premium (P48*10%) = P4.80 + P48 OT Hour with Night Premium 10pm - 11pm Night Premium (P48*10%) = P4.80 OT Premium (P52.80*20%) = P5.28 Regular Rate P48
Rate/hr. Regular Shift 48 Ordinary OT 52.80 OT with Night Premium 58.08 * Total Earnings of 1 worker that day Multiply by: No. of workers *5 Total Earnings of 5 workers that day
6. Net Pay Less:Basic Pay (14hrs*48)
P52.80
P58.08
* No. of hours worked * 8 * 5 1
Total P384 264 58.08 P706.08
P3, 530.34
P706.08 (672)
Labor Premiums of 1worker Multiply by: No.of workers Total amount of Manufacturing Overhead
34.08 *5 P170.4
7. Overhead Applied (P10,000,000*27%) Divide by: Overhead Rate Direct Labor
P2,700,000 75% P3,600,000
8. Cost of Goods Manufactured Less: Manufacturing Cost Net Effect in Work in Process
P10,250,000 (10,000,000 P250,000
Let X = WIP, Beginning .80X = WIP, Ending WIP, Beg. - WIP, Ending = CGM X - .80X = 250,000 .20X = 250,000 .20 .20 X = P1,250,000 WIP, Beginning Multiply by: WIP, Ending
9. Direct Materials, Beginning Add: Purchases Direct Materials Available Less: Direct Materials, Ending Direct Materials Used Cost of Goods Manufactured Add: WIP, Ending Less: WIP, Beginning Total Manufacturing Cost Less: Direct Materials Used Conversion Cost
P1,250,000 80% P1,000,000
P450,000 2,650,000 P3,100,000 (600,000) P2,500,000 P6,800,000 760,000 (560,000) P7,000,000 (2,500,000) P4,500,000
Let X = Direct Labor .50X = Factory Overhead Direct Labor + Factory Overhead = Conversion Cost X + .50X = 4,500,000 1.50X = 4,500,000 1.50 1.50 X = 3,000,000
Direct Materials Add: Direct Labor Prime Cost
10. OT Premium No. of hours worked Multiply by: OT premium rate (P18*50%) Night Shift Premium No. of hours worked Multiply by: OT premium rate (P18*15%) Labor charged to FOH
11. No. of hours worked (including OT hours) Multiply by: Rate per hour Amount debited too WIP
12. Let X = CGM .20X = FG, end CGM – FG, end = CGS X - .20X = 540,000 .80X = 540,000 .80 .80 X (CGM) = 675,000
Total Manufacturing Cost
P2,500,000 3,000,000 P5,500,000
300 9
6000 2.7
P2,700
16,200 P18,900
50 *45 P2, 250
Let X = TMC .10X = WIP, End TMC – WIP, End = CGM X - .10X = 675,000 .90X = 675,000 .90 .90 X (TMC) = 750,000
P750,000
Multiply by: Percentage allocable to DL Direct Labor
*30% P225,000
13. Cost of Goods Manufactured Less: Decrease in WIP Manufacturing Cost Less: Factory Overhead Prime Cost Test Material 2 Multiple Choice 1. Purchases of Raw Materials Add: Decrease in Raw Materials Direct Materials Used Add: Direct Labor Prime Cost 2. Direct Labor Add: Factory Overhead No. of DLH (P30,000/P7.50) Multiply by: OH rate/DLH Conversion Cost
3. Raw Materials Available Less: RM, end Indirect Materials Direct Materials Used Direct Labor Factory Overhead Manufacturing Cost Add: WIP, Beginning Cost of Goods placed into process Less: Cost of Goods Manufactured Wip, Ending
P450,000 (30,000) 420,000 (150,000) P270,000
P42,000 3,000 45,000 30,000 P75,000 A P30,000 4000 10
40,000 P70,000 C
P410,000 (60,000) (10,000) P340,000 300,000 337,500 P977,500 150,000 1,127,500 (975,000) P152,500 A
4. OT Premium (1000hrs.*50%*P35) 10% Pay Premium - 2nd Shift (5000hrs*10%*P35) 20% Pay Premium - 3rd Shift (5000hrs*20%*P35) Labor Premiums
P17,500 17,500 35,000 P70,000 B
5. Basic Pay Shift 1 (5000hrs*P35)
P175,000
Shift 2 (5000hrs*P35*1.10%) Shift 3 (5000hrs*P35*1.20%) Add: OT Basic OT hours Rate/hr.
192,500 210,000 1000 35
35,000
Add: OT Premium OT hours Rate/hr. (P35*50%) Total Payroll
1000 17.5
17,500 P630,000 B
6. Basic Pay (800hrs*P30) Add: OT Premium (800hrs*P30*50%) Direct Labor
24,000 12,000 P36,000 A
7. Sales (2500u*20) Less: Cost of Sales Direct Material (2500u*P3) Direct Labor Factory Overhead (800hrs*P18) Gross Margin
P50,000 7,500 36,500 14,400 (57,900) (P7,900) B
8. Basic Pay (44hrs*P48) Add: OT Premium (4hrs*24) Weekly Earnings
P2,112 96 P2,208 C
CHAPTER 4 ACCOUNTING FOR MANUFACTURING OVERHEAD Exercise 4-1 a. P10/DLH
Exercise 4-3 1. SD- 60.8 TD- 35
b. P5450
2. SD –P4864 TD- P13300 3. P18 164 4. SD- 28.04 TD-13 459.2
c. P44875 d. P58337.5
Summary of Answers Exercise 4-6 AA2 A. P130 000 Budg OH B. P390 000 P1800000 Actual OH C. P310 000 P1717200 D. P288 000 AA3 App OH P1550000 Budg LOA P600000
Exercise 4-7 1.P596 000 2.P1015000 3.P6100 4. P1029500
Exercise 4-9 1. P237 500 2.P465000 3.P309 266 4.P50742 Test Material 1 1.P8 571 2.P62 200 3.P64 000 4.P5/MH 5.P1 375 000
Exercise 4-2 a.P550,000 b. P2.20 c. P30,000 d.P50,000
Exercise 4-4 AA1 Co. ALOA P536000 Over P29000
11.9.75/DLH 12.9.90/DLH 13.P537 250 14.P1 030 000 15.P204 398 16.P534 060
Exercise 4-5 1. P2 664 900 P 2, 199,120 2. P4 763 700
Exercise 4-8 1.P2860000 2.P140000
4.P3 631 380 5.P39.38/DLH 6.P2 835 360 7.P2 860 000 8.P140 000 9.P192 600 10.P622 000 11.86.67/DLH 44.44/MH 12.P5 986 600 13.86.70/PLH
44.43/DLH 14.P5 869 900
8.D 9.A 10.B 11.D 12.B 13.C 14.D 15.P258 000 16.B
Problem 4-1 Dep1 P858 743.92 Dep2 P1 001 256.32
C. MI P35 806 FA 49 501 FI P36 692
Problem 4-2 A. MI P268 738 FA P315 544 FI P356 718 B. MI P268 257 FA P315 839 FI P356 904
Problem 4-3 A1. Dep1 P262 500 Dep 2 P87 500
Test Material 2 1.P1 775 700 2.P5 677 380 3.P3 775 680 11.D 12.A 13.A 14.A 15.E 16.B 17.A 18.D 19.D 20.B
Test Material 3 1.B 2.A 3.C 4.A 5.C 6.C 7.C
6.P185.97/unit 7.P137.90/unit 8.P2 490 788 9.P5.90/unit 10.10.70/DLH Test Material 4 1.D 2.A 3.C 4.C 5.A 6.D 7.A 8.C 9.D 10.A
B1 Dep1 P135 000 Dep2 P64 257 B2 Dep1 P610 000 Dep2 P239 275
A2. Dep1 P737 500 Dep2 262 500
______________________________________________________________________________ COMPUTATIONS: Exercise. 4-1 (a) Total estimated overhead (110000+84000+6000) P 200000 Divided by: Total estimated DLH (4000+14000+2000) 20000 Overhead application rate P 10DLH (b)Direct Labor hours Design Sewing Beading Multiplied by: overhead rate Total overhead applied to the job
25 320 200 545 P 10 P 5450
(c)Direct Materials
P 30000
Direct Labor hours Design (25hrs x P25) Sewing (320hrs x P15) Beading (200hrs x P20) Overhead applied to the job Total cost of the job (d) Total cost of the job Multiply by: Billing price
625 4800 4000 9425 5450 P 44875 P 44875 130% P 58337.50
Exercise. 4-2 (a) Manufacturing overhead for the year
P 550000
(b) Overhead cost Estimated hours Overhead rate
P 550000 250000 P 2.20
Actual overhead, January 1 Applied overhead, January 1 (10000hrs x P2.20) Under applied overhead, January 1
P 52000 22000 P 30000
(c) Actual overhead, December 31 Applied overhead, December 31 (240000hrs x P2.20) Under applied overhead, Under applied overhead, January 1 Under applied overhead, December 31
P 548000 (528000) P 20000 30000 P50000
Exercise 4-3 (1) Sewing department Total budgeted overhead Divided by: estimated total machine hours Overhead rate
P 76000 1250 P 60.80
Treating department Total budgeted overhead Divided by: direct labor hours Overhead rate
P 182000 5200 P 35
(2) Machine hours on job no.4 (sewing) Overhead rate OH applied
80 P 60.80 P 4864
Direct labor hours on Job no.4 (treating) Overhead rate OH applied OH applied (sewing) OH applied (treating) Total OH applied
380 P 35 P13300 P 4864 13300 P18164
(3) Total budgeted overhead Divided by: Total DLH Plant wide rate
P 258000 9200 P 28.04
(4) Direct labor hours Plant wide rate OH applied to Job No.4
480 P 28.04 P 13459.20
Exercise 4-4 AA1 Co. Budgeted manufacturing OH Budgeted level of activity OH rate Applied OH Divided by: OH rate Actual level of activity Actual OH Applied OH Under applied AA2 Co. Applied OH Divided by: actual level of activity Multiplied by: budgeted level of activity Budgeted OH Applied OH Over applied OH Actual OH AA3 Co. Actual OH Over applied OH Applied OH
P1600000 500000 P 3.20 P 1715200 3.20 P 536000DLH P1744000 1715200 P 28800
P 1764000 392000DLH 400000DLH P 1800000 P 1764000 46800 P 1717200 P 1486000 64000 P 1550000
Applied OH Divided by: actual level of activity OH rate
P 1550000 620000DLH P 2.50
Budgeted OH Divided by: OH rate Budgeted level of activity
P 1500000 2.50 600000DLH
Exercise 4-5 (1) Using departmental rates Department 1 Overhead cost (budgeted data) Direct labor hours (budgeted data) Total Units produced Total Direct labor hours per unit (79 000/9 400) Overhead applied
2 700 000 / 80 000 33.75 * 9 400 317 250 * 8.40 2 664 900
Department 2 Overhead cost (budgeted data) Machine labor hours (budgeted data) Total Units produced Total Machine hours per unit (43 000/56 000) Overhead applied
2 040 000 / 40 000 51 * 56 000 2 856 000 * .77 2 199 120
(2) Using plant wide rate Overhead rate = 2 700 000 + 2 040 000 80 000 + 120 000 =23.7 / DLH Total overhead applied = Overhead rate * Units produced * Direct labor per unit = 23.70 * 65 500 * 3.07 = 4 763 700 Ex. 4-6. (A)Direct materials beginning Purchases Total Direct materials ending Direct materials used
85 000 150 000 235 000 - 105 000 130 000
(B)Direct materials Direct labor Factory overhead Total manufacturing cost Work in process beginning Cost of goods put into process (C) Cost of goods put into process Work in process ending Cost of goods manufactured (D)Actual overhead Applied overhead Under applied overhead Cost of goods manufactured Finished goods beginning Cost of goods available for sale Finished goods ending Cost of goods sold Under applied overhead Adjusted cost of goods sold
130 000 90 000 72 000 292 000 98 000 390 000 390 000 - 80 000 310 000 75 000 -72 000 3 000 310 000 50 000 360 000 - 75 000 285 000 3 000 288 000
Exercise 4-7 (1) Direct labor Indirect labor Indirect materials Depreciation Maintenance Miscellaneous Conversion cost
350 000 35 000 200 000 11 000 50 000 31 000 596 000
(2) Conversion cost Direct materials Total manufacturing cost Work in process beginning Cost of goods put into process Work in process ending Cost of goods manufactured
596 000 360 000 956 000 220 000 1 176 000 - 160 500 1 015 500
(3) Factory overhead (10.40*25 000) Direct labor cost Conversion cost (4) Conversion cost
260 000 350 000 610 000 610 000
Direct materials Total manufacturing cost Work in process beginning Cost of goods put into process Work in process ending Cost of goods manufactured
360 000 970 000 220 000 1 290 000 - 160 500 1 029 500
Exercise 4-8 (1) Overhead Machine hours (budgeted) Overhead rate Machine hours worked (10 000 + 120 0000 Overhead applied to production
2 750 000 / 125 000 22 * 130 000 2 860 000
(2) Actual overhead (260 000 + 2 740 000) Applied overhead Under applied overhead Exercise 4-9 1. Total Service Cost allocated to ASSEMBLY: (direct method) Personnel Cost (200 000 x 100/400) Assembly (500 000 x 1800/4800) Total 2. Total Service Cost allocated to FINISHING: (step method) Service Departments Administration Personnel Estimated Overhead Costs 500 000 200 000 Service Provided by: Administration (500 000) Personnel (500 000 x 2/50) 20 000 Assembly (500 000 x 18/50) Finishing (500 000 x 30/50) Personnel (220 000) Assembly (220 000 x 10/40) Finishing (220 000 x 30/40) Total Service Cost
Estimated Overhead Costs No. of employees
Service Departments Administration Personnel 200 000 500 000 10 30
3 000 000 - 2 860 000 140 000
50 000 187 500 237 500
Producing Department Assembly Finishing 1 800 000 3 000 000
180 000 300 000 55 000 235 000
165 000 465 000
Producing Department Assembly Finishing 1 800 000 3 000 000 100 300
Service provided by: Personnel Administration
* 2/50=4%
3/43=7% *
10/43=23% 18/50=36%
30/43=70% 30/50=60%
Cost Formula Personnel Cost= 200 000 + 4%A Administration Cost= 500 000 + 7%P New Value of each Service Department Personnel Cost = 200 000 + 4% (500 000 + 7%P) = 200 000 + 20 000 + 0.0028P = 220 000/0.9972 = 220 618 Administration Cost = 500 000 + 7%P = 500 000 + 7% (220 618) = 515 443 3. Administration Cost allocated to FINISHING Department 515 443 x 60% 4. Personnel Cost allocated to ASSEMBLY Department 220 618 x 23%
309 266 50 742
Problem 4-1: 1st step: a) Repairs and Maintenance costs = P 870,000 + 20%HR b) Human Resource costs = P 990,000 + 16%RM 2nd step: a) Repairs and Maintenance costs = P 870,000 + 20% (990,000 + 16%RM) = P 870,000 + 198,000 + 0.032RM = P 1,103,306 b) Human Resource costs = P 990,000 + 16% (1103,306) = P 1,166,529 rd 3 step: Department 1 Repairs & Maintenance costs: Dept. 1: 44% x 1,103,306
Department 2
P 485,454.64
Dept. 2: 40% x 1,103,306
P 441,322.40
Human Resource costs: Dept. 1: 32% x 1,166,529 Dept. 2: 48% x 1,166,529
373,289. 28 559,933.92
Total allocated service costs
P 858,743.92
P 1,001,256.32
Problem 4-2: a. Direct method
Est. Dept. OH costs Gen. Factory Office costs: Mixing: (23,200 / 68,000) x 43,000 Fabricating: (25,600 / 68,000) x 43,000 Finishing: (19,200 / 68,000) x 43,000 Employee Relations costs: Mixing: (144 / 540) x 79,000 Fabricating: (228 / 540) x 79,000 Finishing: (168 / 540) x 79,000 Total est. factory overhead
Service Departments Gen. Factory Employee Office Relations P 43,000 P 79,000 (43,000)
Producing Departments Mixing Fabricating Finishing P 233,000
P 266,000
P 320,000
14,671 16,188 12,141 (79,000) 21,067 33,356 24,577 P 268,738
P 315,544
P 356,718
b. Step method
Est. Dept. OH costs Gen. Factory Office costs: Employee Relations: (12,000 / 80,000) x 43,000 Mixing: (23,200 / 80,000) x 43,000 Fabricating: (25,600 / 80,000) x 43,000 Finishing: (19,200 / 80,000) x 43,000 Employee Relations costs: Mixing: (144 / 540) x 85,450 Fabricating: (228 / 540) x 85,450 Finishing: (168 / 540) x 85,450
Service Departments Gen. Factory Employee Office Relations P 43,000 P 79,000 (43,000) 6,450
Producing Departments Mixing Fabricating Finishing P 233,000
P 266,000
P 320,000
12,470 13,760 10,320 85,450 22,787 36,079 (85,450)
26,584
Total est. factory overhead
P 268,257
P 315,839
P 356,904
c. Algebraic method 1st step: a) Gen. Factory Office costs = P 43,000 + 10%ER b) Employee Relations costs = P 79,000 + 15%GFO 2nd step: a) Gen. Factory Office costs = P 43,000 + 10% (79,000 + 15%GFO) = P 43,000 + 7,900 + 0.15GFO = P 51,675 b) Employee Relations costs = P 79,000 + 15% (51,675) = P 86,751 3rd step: Mixing Gen. Factory Office costs: Mixing: 29% x 51,675 Fabricating: 32% x 51,675 Finishing: 24% x 51,675 Employee Relations costs: Mixing: 24% x 86,751 Fabricating: 38% x 86,751 Finishing: 28% x 86,751 Total allocated service costs Problem 4-3:
Fabricating
Finishing
P 14,986 P 16,536 P 12,402 20,820 32,965 P 35,806
P 49,501
24,290 P 36,692
A. If Plant wide-rate is used 1) P 486,000 + 564,000 ═ P 35.00 / DLhrs. 30,000 FOH; Dept. 1: = 5,000 x 1.5 x 35.00
FOH; Dept. 2: = 5,000 x 0.5 x 35.00
= P 262,500
= P 87,500
2) Dept. 1
Dept. 2
Total
Direct Materials Direct Labor costs Factory Overhead costs
P 175,000 300,000 262,500 P 737, 500
P 50,000 125,000 87,500 P 262,500
P 225,000 425,000 350,000 P 1,000,000
B. If Departmental rate is used 1) Dept. 1: P 486,000 / 27,000 DLH = P 18.00 / DLhrs. Dept. 2: P 564,000 / 65,800 MH = P 8.57 / MH FOH; Dept. 1:
FOH; Dept.2:
= 5,000 x 1.5 x 18.00
= 5,000 x 1.5 x 8.57
= P 135,000
= P64, 257
2) Direct Materials Direct Labor costs Factory Overhead costs
Dept. 1 P 175,000 300,000 135,000 P 610,000
Dept. 2 P 50,000 125,000 64,275 P 239,275
Total P 225,000 425,000 199,275 P 849, 275
Test Material 1 Service Departments Estimated Overhead Costs Service provided by: Maitenance Utilities
Maintenace
Utilities
20 000
10 000
* 10%
20% *
Cost Formula Maitenance Cost= 20 000 + 10%U Utilities Cost= 10 000 + 20%M New Value of each Service Department Maintenance Cost = 20 000 + 10% (10 000 + 20%M) = 20 000 + 1 000 + 0.02M = 21 000/0.98 = 21 428.57
Producing Department Department Department 1 2
40% 30%
40% 60%
Maintenance Cost allocated to Department 1 21 428.57 x 40%
8 571
2. Direct Materials Direct Labor (950 hrs x 20) Factory Overhead (950 hrs x 16) Balance opf Work in Process
28 000 19 000 15 200 62 200
3. Maintenance Cost allocated to Depatment B: (direct method) 160 000 x 320/800
64 000
4. Total Budgeted Overhead [600 000 + (3 x 300 000MH)] Divide by: Machine hours Predetermined OH rate
1 500 000 300 000 MH 5/MH
5. Overhead Component of COS 275 000 MH x 5MH
1 375 000
6. Direct Materials (20 500lbs x 20) + (11 000lbs x 24) Direct Labor (28 000hrs x 48) +_ (2 800hrs 50) Actual Factory Overhead (265 000 + 140 000) + (20 600 +20 000) Total Manufacturing Cost Divide by: Units produced Manufacturing cost per unit 7. Budgeted Overhead (1 149 500 + 590 500) Divide by: Estimated DLH (110 000 + 10 000) Overhead rate Applied FOH (28 000hrs + 2 800hrs) x 14.50 Actual Direct Labor
674 000 1 484 000 445 600 2 603 600 14 000 185.97
1 740 000 120 000 14.50/DLH
446 600
(28 000hrs x 48) + (2 800hrs x 50) Conversion Cost Divide by: Units produced Conversion Cost per unit 8. Department 1 Budgeted Overhead Divide by: Estimated DLH Overhead rate Multiply by: Actual DLH Applied Overhead Department 2 Budgeted Overhead Divide by: Estimated MH Overhead rate Multiply by: Actual MH Applied Overhead
1 484 000 1 930 600 14 000 137.9
1 149 500 110 000 10.45/DLH 28 000 292 600
590 500 100 000 5.91/MH 6 800 40 188
Direct Materials (20 500 x 20)+(11 000 x 24) Direct Labor (28 000 x 48)+(2 800 x 50) Applied Overhead (292 600 + 40 188) Total Manufacturing Cost
1 484 000
9. Estimated Production(in units) Multiply by: Predetermined OH rate Total Factory OH Fixed Factory OH Variable Factory OH Divide by: Estimated units of prod. Variable Factory OH rate
200 000 10.4 2 080 000 900 000 1 180 000 200 000 5.90
10. ASSEMBLY Department OH rate: Budgeted Overhead Service provided by: Repair (48 000 x 1/9)
674 000
332 788 2 490 788
204 000 5 333
218 750 428 083 40 000 10.70/DLH
Power (250 000 x 840/960 Total Budgeted OH Divide by: DLH (20 emp x 2 000hrs) Assembly Department OH rate 11. ASSEMBLY Department OH rate: Budgeted Overhead Service provided by: Power (250 000 x 840/1200) Repair (98 000 x 1/9) Total Budgeted OH Divide by: DLH (20 emp x 2 000hrs) Assembly Department OH rate 12 Budgeted Overhead Labor Hours KWH Service provided by: Repair Power
204 000 175 000 10 889 389 889 40 000 9.75/DLH Repair 48 000
Power 250 000 1 000
Assembly 204 000 1 000 840 000
Finishing 320 000 8 000 120 000
10% *
10% 70%
80% 10%
240 000 * 20%
Cost Formula Repair Cost = 48 000 + 20%P Power Cost = 250 000 + 10%R New Value of each Service Department Repair Cost = 48 000 + 20% (250 000 + 10%R) = 48 000 + 50 000 + 0.02R = 98 000/0.98 = 100 000 Power Cost = 250 000 + 10% (100 000) = 250 000 + 10 000 = 260 000 ASSEMBLY DEPARTMENT OH rate Budgeted Overhead Service provided by: Repair (100 000 x 10%)
204 000 10 000
182 000 396 000 40 000 9.90/DLH
Power (260 000 x 70%) Total Budgeted Overhead Divide by: DLH (20 emp x 2 000hrs) Assembly Department OH rate
1 800 000
13. Budgeted Annual Variable Overhead Budgeted Fixed OH Factory Rent Factory Plant and Equipment Total Factory Overhead Divide by: Estimated MH FOH rate
50 000 380 000
430 000 2 230 000 80 000 27.875/MH 2 062 750 2 600 000 537 250
Applied Overhead 74 000MH x 27.875 Actual Overhead Underapplied OH 14. Cost Formula S1Cost = 200 000 + 20%S2 S2 Cost = 176 000 + 10%S1 New Value of each Service Department S1 Cost = 200 000 + 20% (176 000 + 10%S1) = 200 000 + 35 200 + 0.02S1 = 235 200/0.98 = 240 000 S2 Cost = 176 000 + 10% (240 000) = 176 000 + 24 000 = 200 000
850 000
Budgeted OH of P2 Allocated Service Cost provided by: S1 240 000 x 50% S2 200 000 x 30% Total Budgeted FOH
120 000 60 000
180 000 1 030 000
15. STEP method Administration
Maintenance
Freight
Passenger
Direct Overhead Cost Sevices provided by: Administration Maintenance 950 000 x 8/89 Freight 950 000 x 30/89 Passenger 950 000x 51/89 Maintenance Freight 715 393 x 80/280
950 000 (950 000)
630 000
1 800 500
5 260 470
85 393 320 225 544 382 (715 393) 204 398 510 995
Passenger 715 393 x 200/280 16. SIMULTANEOUS method Direct Overhead Cost Direct Labor Hours No.of employees Service provided by: Maintenance Administration
Maintenance 630 000 8 000 40
Administration 950 000 9 000 50
Freight 1 800 500 30 000 80
Passenger 5 260 470 51 000 200
* 9%
15% *
24% 34%
61% 57%
Cost Formula Maintenance Cost = 630 000 + +9%A Administration Cost = 950 000 + 15%M New Value of each Service Department Maintenance Cost = 630 000 + 9% (950 000 + 15%M) = 630 000 + 85 500 + 0.0135M = 715 500/0.9865 = 725 291 Administration Cost = 950 000 + 15% (725 291) = 950 000 + 108 794 = 1 058 794 Budgeted OH of Freight Department Allocated Service Cost provided by: Maintenance 725 291 x 24% Admnistration 1 058 794 x 34% Total Allocated Service Cost
174 070 359 990 534 060
Test Material 2 1. Applied Overhead Direct Labor (14 000 x 76.50) + (800 x 76.50) Multiply by: OH rate Actual Overhead Incurred Special night premium (14 000 x 76.50 x 10%) OT premium (800 x 76.50 x 30%) Underapplied OH 3.Raw Material, beg Purchases Raw Matertials, end Indirect Materials Direct Materials Direct Labor 14 000hrs x 76.50 800hrs x 76.50 Applied Overhead 1 132 200 x 80% Total Manufacturing Costs
1 132 200 80%
905 760
2 556 000 107 100 18 360 (2 681 460) 1 775 700 241 200 1 968 120 (450 000) 21 600 1 737 720
1 071 000 61 200
1 132 200
905 760 3 775 680
4. Total Manufacturing Costs Work in process, beg Work in process, end (637 200 + 144 000) Cost of Goods Manufactured
3 775 680 637 200
2. Total Manufacturing Costs Work in process, beg Work in process, end (637 200 + 144 000) Cost of Goods Manufactured Finished Goods, beg
3 775 680 637 200
(781 200) 3 631 680
(781 200) 3 631 680 1 070 280
Finished Goods, end (1 070 280 - 270 000) Cost of Goods Sold Underapplied OH Adjusted Cost of Goods Sold
(800 280) 3 901 680 1 775 700 5 677 380
5. Budgeted Overhead Divided by: Budgeted DLH Predetermined FOH rate
2 953 125 75 000 39.38/DLH
6. Actual DLH used Multiply by: Predetermined FOH rate Total Overhead applied
72 000 39.38 2 835 360
7. Estimated OH cost Divide by Estimated MH usage OH rate
2 750 000 125 000 22/MH
Applied Overhead, July (10 000MH x 22/MH) Remainder (120 000MH x 22/MH) Total Applied OH costs 8. Applied OH Actual OH July Remainder Underapplied OH costs (variance) 9. Budgeted Overhead Costs Divide by: Estimated MH usage Overhead rate
220 000 2 640 000 2 860 000 2 860 000 260 000 2 740 000
(3 000 000) 140 000 2 568 000 48 000 53.50/MH
Applied Overhead 3 600MH x 53.50/MH
192 600
Less: Actual Overhead Underapplied OH (variance)
202 000 9 400
63 000 105 000 192 600 360 600 (252 000) 612 600 9 400 622 000
10. Materials Direct Labor Applied FOH Total Manufacturing Costs Work in process, beg Cost of Goods Manufactured/CGS Underapplied OH (variance) Adjusted Cost of Goods Sold 11. STEP method Overhead Costs Services provided by: Administration Maintenance 1 800 000 x 20/120 Cutting 1 800 000 x 80/120 Sewing 1 800 000 x 20/120 Maintenance Cutting 1 100 000 x 50/75 Sewing 1 100 000 x 25/75 Total Factory Overhead Divide by Factory Overhead rate
Administration Maintenance 1 800 000 800 000
Cutting 5 000 000
Sewing 6 000 000
(1 800 000) 300 000 1 200 000 300 000 (1 100 000) 733 333 366 667 6 933 333 6 666 667 80 000DLH 150 000MH 86.67/DLH 44.44/MH
12. Direct Materials (950 000 + 210 000 ) Direct Labor Costs (560 000 + 1 200 000) Factory OH Applied Cutting (20 000DLH x 86.67/DLH) Sewing (30 000MH x 44.44/MH) Total Manufacturing Costs *in producing 10 000 units
1 160 000 1 760 000 1 733 400 1 333 200
3 066 600 5 986 600
13. ALGEBRAIC method Overhead Costs DL hours
Administration Maintenance 1 800 000 800 000 20 000
Cutting 5 000 000 80 000
Sewing 6 000 000 20 000
Space occupied Services provided by: Administration Maintenance
4 500 sqm
7 000 sqm
50 000 sqm
25 000 sqm
* 6%
17% *
66% 63%
17% 31%
Cutting
Sewing
Cost Formula Administration Costs = 1 800 000 + 6%M Maintenance Costs = 800 000 + 17%A New value of each service department Administration Costs = 1 800 000 + 6%(800 000 + 17%) = 1 800 000 + 48 000 + 0.0102A = 1 848 000/0.9898 = 1 867 044 Maintenance Costs = 800 000 + 6%M = 800 000 + 17% (1 867 044) = 800 000 + 317 397 = 1 117 397 Allocation Administration Cutting 1 867 044 x 66% Sewing 1 867 044 x 17% Maintenance Cutting 1 117 397 x 63% Sewing 1 117 397 x 31% Total allocated service costs Add: Overhead Costs Total Overhead Costs Divide by FOH rate 14. Direct Materials (950 000 + 210 000) Direct Labor Costs (560 000 + 1 200 000) Factory Overhead Applied Cutting (20 000DLH x 86.67/DLH)
1 232 249 317 397 703 960 1 936 209 5 000 000 6 936 209 80 000DLH 86.70/DLH
346 393 663 790 6 000 000 6 663 790 150 000MH 44.43/MH
1 160 000 1 760 000 1 734 000
Sewing (30 000MH x 44.43/MH) Total Manufacturing Costs *in producing 10 000 units
1 332 900
Test Material 3 1. B Applied OH component of: Work in process Cost of Goods Sold Finished Goods Total Budgeted Overhead Divide by: Budgeted MH Predetermined OH rate
460 000 1 440 000 500 000 2 400 000 50 000 48/MH
2. A Sales for August (500 000 x 1.2) Gross Margin Cost of Goods Sold Finished Goods, end Finished Goods, beg Cost of Goods Manufactured Work in process, end Work in process, beg Cost of Goods put into process Prime cost (48 000 + 294 000) Applied Overhead Divide by: Actual DLH usage Overhead rate 3. C Budgeted cost after allocation Producing Finishing Total Divide by: Budgeted DLH Producing Finishing
3 066 900 5 986 900
600 000 190 000 410 000 60 000 (81 000) 389 000 85 000 (78 000) 396 000 (342 000) 54 000 45 000 1.20/DLH
1 510 439 1 315 561 2 826 000 35 000 15 000
50 000
56.52/DLH
Factory Overhead rate 4. A Assembly estimated budgeted cost Service provided by: Maintenance cost (300 000 x 500/800) Personnel cost (400 125 x 50/75) Finance cost (150 875 x 30/70 Total Divide by: Budgeted DLH Factory Overhead rate 5. C Sewing Department OH rate (76 000/1 250 MH) Treating Department (182 000/5 200 DLH) Applied Overhead Sewing Department (80 x 60.80) Treating Department (380 x 35) Total 6. C Sewing Department Treating Department Total Budgeted OH Divide by: Total DLH Factory Overhead rate Overhead Applied 480 DLH x 28.04/DLH
1 000 000 187 500 266 750 64 661
518 911 1 518 911 35 000 43.40/DLH
60.80/MH 35/DLH
4 864 13 300 18 164
76 000 182 000 258 000 9 200 28.04/DLH
13 459
7. C Factory Overhead rate 266 400/18 500 MH
14.4/MH
Applied Overhead 190 050 MH x 14.4/MH
270 320
Actual Overhead Underapplied Overhead Cost of Goods Sold adjustment 560 000/1 000 000 x 13 600
(287 920) 13 600
7 616 *DEBIT
8. D Estimated Factory Overhead Divide by: Budgeted DLH [(80 000x2.5) + (20 000 x 4)] FOH rate
280 000 26.25/DLH
Car Wheels Direct Labor (190 000hrs x 38.50) Factory Overhead (190 000hrs x 26.25) Conversion Cost Divide by: Units produced Conversion Cost per unit
7 315 000 5 035 000 12 350 000 75 000 164.67
Trucks Direct Labor (82 500hrs x 38.50) Factory Overhead (82 500hrs x 26.25) Conversion cost Divide by: Units produced Conversion cost per unit
3 176 250 2 186 250 5 362 500 18 000 297.92
9. A Goods put into process (341 000 + 324 500 + 259 600) Goods manufactured Cost of goods still in process
925 100 (825 400) 99 700
Conversion cost still in process (99 700 - 70 000) Direct Labor cost still in process (29 700/1.80) FOH still in process Factory Overhead component of goods
7 350 000
29 700 16 500 13 200
259 600 (13 200) 246 400
put into process FOH still in process FOH component of goods manufactured 10. B Budgeted total variable OH Budgeted fixed OH Factory rent Factory equipment Estimated FOH Divide by: Estimated MH FOH rate
180 000 2 15 000 38 000
Applied Overhead 70 000 MH x 5.4125 Actual Overhead Underapplied Overhead
253 000 433 000 80 000 5.4125/MH
378 875 (387 875) 9 000
11. D Product A Prime cost A (800 units x 35) B (8 000 units x 22) Overhead Function 1 A (800 units x 2hrs x 10) B (8 000 units x 1hr x 10) Function 2 A (800 units x 1hr x 7) B (8 000 units x 8hrs x 7) Function 3 A (800 units x 5hrs x 18) B (8 000 unitsx 1 hr x 18) Total Factory Costs 12. B Estimated FOH
B
TOTAL
28 000 176 000
204 000
80 000
96 000
448 000
453 600
144 000
216 000 969 600
16 000
5 600
72 000
255 000
Divide by: Estimated DLH FOH rate
100 000 2.55/DLH
Applied FOH (105 000 x 2.55/DLH) Actual FOH Overapplied Overhead *accounted as a deduction to CGS
267 750 (265 500) 2 250
13. C Assembly Department: (direct method) Service provided by: General Factory Administration (90 000 + 70 000) x 437.5/1000
70 000
14. D Cost of Goods Sold, June Finished Goods, end Finished Goods, beg Cost of Goods Manufactured, June
84 000 16 000 (11 000) 89 000
15. 258 000 Materials issued Direct Labor Applied FOH (420 000/20) x 28 Total Manufacturing Costs
380 000 420 000 588 000 1 388 000
Total Manufacturing Cost Work in process, beg Work in process, end Cost of Goods Manufactured Finished Goods, beg Finished Goods, end Cost of Goods Sold Overapplied Overhead Adjusted Cost of Goods Sold
1 388 888 20 000 (468 000) 940 000 10 000 (50 000) 900 000 (68 000*) 832 000
*Applied OH Actual OH Depreciation
588 000 40 000
360 000 60 000 40 000 20 000
Rentals Utilities Indirect Labor Indirect Materials Overapplied FOH
1 090 000 (832 000) 258 000
Sales Revenue Adjusted Cost of Goods Sold Gross Profit 16. B Choco Bar (ABC method) Budgeted Overhead Cost component Act. Center 1 (25 000 x 150/250) Act. Center 2 (65 000 x 800/1000) Act. Center 3 (90 000 x 1000/3000) Total Divide by: Annual production(in units) Overhead cost per unit
15 000 52 000 30 000 97 000 10 000 9.70/unit
CHAPTER 5 ACTIVITY-BASED COSTING
Summary of Answers Exercise 5-1
Exercise 5-3
4.A
16.B
4.D
A. Standard P8500000
1.
5.D
17.A
5.A
2.
6.B
18.C
6.E
7.A
19.D
7.D
De Luxe P946 250
(520 000) 68 000
B. Standard P1700000
Exercise 5-4
8.C
20.A
8.B
De Luxe P189 250
1. P1
9.A
21.B
9.D
2. P2
10.B
22.D
10.D
Exercise 5-2
11.B
11.D
A1. 22.25
Test Material 1
12.C
TM 2
12.B
A2. 7.81
1.A
13.A
1.D
13.B
B1. 434.75
2.D
14.A
2.A
14.C
B2. 420.31
3.C
15.B
3.C
15.C
TM 3 1. P110 000
10. P13 800 000
2. P409 293.50
11.
3. P177.16
12.
4.P13 606 000 5. P514.32 6. P13 606 000 7. P5 132 762.80 8.P 946 500/ P443 500 9.31.03/37.60
COMPUTATIONS
Exercise 5-1 Standard Overhead
P
4,625,000
Direct Materials
3,500,000
Direct Labor
377,000
Total Manufacting Cost
8,500,000
x
20%
Ending inventory
P
1,700,000
Overhead
P
471,250
Deluxe
Direct Materials
400,000
Direct Labor
75,000
Total Manufacting Cost
946,250 x
Ending inventory
P
20%
189,250
Exercise 5-2
ABC Machine set ups (2000 x 4)
P
8,000
Raw materials (2 x 10000pouds)
20,000
Hazaedous materials (5 x 2000 pounds)
10,000
Inspections (75 x 20)
1,500
Machine hours (10 x 500)
5,000 44,500 /2,000
Overhead applied
P
22.25
Traditional Machine set ups
P
200,000
Materails hand
100,000
Hazardous waste control
50,000
Quality control Other overhead cost
75,000 200,000
Total costs
625,000
Nos. of hours
/2,000hrs 31.25 x 500 15,625
Machine hours
/2,000 P
7,81
ABC Direct Materials (425000/2000)
P
Direct Labor 400000/2000)
212.5 200
Overhead cost (44500/2000)
22.25
Manufacturing cost
P
434.75
P
212.5
Traditional Direct Materials (425000/2000) Direct Labor 400000/2000)
200
Overhead cost
7.8125
Manufacturing cost
Test Material 1
P
420.31
1. Serving a party for dinners (33,000÷6,000) × 1 Serving a party (138,000÷15,000) × 4 Serving drinks (24,000÷10,000) × 3 Total cost
5.50 36.80 7.20 49.50
2. Manufacturing cost, De Luxe Units produced Cost per unit
217,280 ÷ 400 543.20
Manufacturing cost, Standard Units produced Cost per unit
166,650 ÷ 60 2,776
3. Prime cost (882,000+2,910,000) Factory overhead, ABC Setups cost (300,000÷60×30) Design related cost (900,000÷15,000×12,000) Other overhead (3,300,000÷3,000,000×2,910,000)
3,792,000 150,000 720,000 3,201,000 4,071,000
Total production cost for Alpha 4. Setups cost (300,000÷60×30) Design related cost (900,000÷15,000×3,000) Other overhead (3,300,000÷3,000,000×90,000) Overhead applied to Job Beta 5. Prime cost (882,000+2,910,000) Overhead applied (4,500,000÷3,000,000×2,910,000) Total production cost 8,157,000 Units produced Cost per unit of Alpha 6. Direct labor cost Overhead rate (4,500,000÷3,000,000) Overhead applied 7. Account inquiry Inquiry cost (400,000÷10,000) Inquiry cost assigned to Dept. A
7,863,000 150,000 180,000 99,000 429,000 3,792,000 4,365,000
÷ 73,500 110.98 90,000 × 1.50 135,000 2,000 × 40 80,000
8. Account billing Billing cost (280,000÷4,000,000) Billing cost assigned to Dept. B
200,000 × 0.07 14,000
9. Inquiry cost (400,000÷10,000) × 2,000 Billing cost (280,000÷4,000,000) × 400,000 Verification cost (150,000÷40,000) × 10,000 Correspondence cost (50,000÷4,000) × 1,000 Total traceable cost assigned to Dept. A
80,000 28,000 37,500 12,500 158,000
Inquiry cost (400,000÷10,000) × 4,000 Billing cost (280,000÷4,000,000) × 200,000 Verification cost (150,000÷40,000) × 8,000 Correspondence cost (50,000÷4,000) × 1,600 Total traceable cost assigned to Dept. A
160,000 14,000 30,000 20,000 224,000
10. Indirect costs (200×20) Units produced Cost per unit
4,000 ÷ 1,000 4.00
11. Material handling (2000×2) Assembly (20×20) Inspection (30×3) Indirect cost Units produced Cost per unit
4,000 400 90 4,490 ÷ 1,000 4.49
12. Prime cost Factory overhead (1,213,000÷100,000×32,000) Total factory cost, Product A
80,000 388,160 468,160
Prime cost Factory overhead (1,213,000÷100,000×18,000) Total factory cost, Product B
80,000 213,840 298,340
Prime cost Factory overhead (1,213,000÷100,000×50,000) Total factory cost, Product C
80,000 606,500 696,500
13. Total factory cost, Product A Markup Selling price
468,160 × 1.20 561,792
Total factory cost, Product B Markup Selling price
298,340 × 1.20 358,008
Total factory costs, Product C Markup Selling price 835,800
696,500 × 1.20
14. Prime cost Overhead: Utilities (300,000÷60,000) × 30,000 Scheduling and setup (273,000÷780) × 130 Material handling (640,000÷1,600,000) × 500,000 395,500 Manufacturing cost 475,500 Units produced Cost per unit, Product A Prime cost Overhead: Utilities (300,000÷60,000) × 10,000 Scheduling and setup (273,000÷780) × 380 Material handling (640,000÷1,600,000) × 300,000 Manufacturing cost Units produced Cost per unit, Product B Prime cost Overhead: Utilities (300,000÷60,000) × 20,000 Scheduling and setup (273,000÷780) × 270 Material handling (640,000÷1,600,000) × 800,000 Manufacturing cost Units produced
80,000 150,000 45,500 200,000
÷ 40,000 11.89 80,000 50,000 133,000 120,000 303,000 383,000 ÷ 20,000 19.15 90,000 100,000 94,500 320,000
514,500 604,500 ÷ 60,000
Cost per unit, Product C
10.075
15. Material handling (50,000÷100,000) × 10,000 Painting (200,000÷50,000) × 3,000 Assembly (120,000÷4,000) × 300 Overhead cost assigned to Job 1234
5,000 12,000 9,000 26,000
16. Prime cost Overhead cost Manufacturing cost Units produced Manufacturing cost per unit
180,000 26,000 206,000 ÷ 3,000 68.67
17. Direct material (33×8,000) Direct labor (32×8,000) Overhead (1,320,000÷15,000) × 12,000 Total cost of product Regular
264,000 256,000 1,056,000 1,567,000
18. Setup (240,000÷25) × 20 Engineering (180,000÷900) × 450 Machine costs (900,000÷6,000) × 4,000 Total overhead costs assigned to product SuperPro
192,000 90,000 600,000 882,000
19. Direct material (33×8,000) Direct labor (32×8,000) Overhead: Setup (240,000÷25) × 5 Engineering (180,000÷900) × 450 Machine costs (900,000÷6,000) × 2,000 Total cost of product Regular
264,000 256,000
20. Direct material (38×2,200) Direct labor (44×2,200) Overhead Manufacturing cost Units produced Manufacturing cost per unit of product SuperPro 21. Overhead costs assigned to roller blades (160,000÷4,000) × 400
48,000 90,000 300,000
438,000 958,000 83,600 96,800 882,000 1,062,400 ÷ 2,200 482.91
16,000
22. Machining center (120,000÷20,000) × 500 Setup center (40,000÷100) × 20 Overhead costs assigned to roller blades using ABC
3,000 8,000 11,000
Test Material 2
1. Materials Handing (30,000÷1,000) × 400 Machine setups (27,000÷450) × 150 9,000 Quality inspection (24,000÷600) × 200 Total overhead costs assigned to product Instruments
12,000
8,000 29,000
2. Direct cost 54,000 Overhead 29,000 Manufacturing cost of product Instrument 3. Direct cost 85,000 Overhead: Materials Handing (30,000÷1,000) × 600 Machine setups (27,000÷450) × 300 Quality inspection (24,000÷600) × 400 Manufacturing cost 137,000 Units produced Manufacturing cost per unit of product Gauge
83,000
18,000 18,000 16,000
52,000
÷ 300 457
4. Overhead: Widgets (1,920,000÷160,000) × 40,000 Gadgets (1,920,000÷160,000) × 30,000 Targets (1,920,000÷160,000) × 90,000
480,000 360,000 1,080,000
5. Direct materials (10×160,000) Direct labor Overhead (3,528,000÷840,000) × 560,000 Manufacturing cost Units produced
1,600,000 560,000 2,352,000 4,512,000 ÷ 160,000
Manufacturing cost per unit of product BB 6. Direct materials (300×2,000) Direct labor Overhead: Set up related (1,350,000÷90) × 45 Design related (1,400,000÷8,000) × 3,000 Others (778,000÷8,400) × 2,800 Manufacturing cost
28.20 1,600,000 280,000 675,000 525,000 259,333 1,459,333 2,339,333
7. Overhead applied (186,200÷12,500) × 10,000 Number of units produced and sold Overhead applied per unit of product X 8. Direct materials Direct labor (22×2,500) Overhead: Inspection costs (56,200÷100) × 20 Purchasing costs (80,000÷15) × 3 Machine costs (50,000÷4,000) × 2,400 Manufacturing cost 187,240 Sales (80×3,000) 240,000 Gross profit 52,760 Units produced and sold Goss profit per unit 17.59 9. Sales (65×11,000) + (80×3,000) Manufacturing cost: Direct materials (12.5×11,000) + (25×3,000) Direct labor (20×10,000) + (22×2,500) Overhead 653,700 Gross margin 301,300 Test Material 3
148,960 ÷ 110,000 13.54 75,000 55,000 11,240 16,000 30,000
57,240
÷ 3,000
955,000 212,500 255,000 186,200
1. Total store overhead (110,000+138,000+96,000) Multiply Overhead allocated to Beverage
344,000 × 275,000/860,000 110,000
2. Ordering (344,000×30%) × 250/1025 Costumer support (344,000×20%) × 350,000/900,000 Stocking shelves (344,000×40%) × 2,950/9,125 Stocking shelves (344,000×10%) × 1,750/5,175 Overhead allocated to Food section
25,141 26,756 44,484 11,633 108,044
3. Total factory overhead (budgeted) (624,800+232,000+289,200+1,972,000+6,424,000+3,596,000+468,000) Direct labor hours Predetermined overhead rate
13,606,000 ÷ 76,800 177.16
4. Gears (40,000×177.16) Shafts (20,000×177.16) Chassis (16,800×177.16) Budgeted overhead applied to three jobs
7,086,400 3,543,200 2,976,288 13,605,888
5. Direct materials (20,000×120) Direct labor (40,000×20) Overhead (40,000×177.16) Manufacturing cost Units produced Manufacturing cost per unit of Gear
2,400,000 800,000 7,086,400 10,286,400 ÷ 20,000 514.32
6. Overhead allocated to Gears: Materials handling (624,800÷3,320,000) × 2,400,000 Production scheduling (232,000÷140) × 80 Set ups (289,200÷88) × 40 Manual machinery (1,972,000÷76,800) × 40,000 Automated machinery (6,424,000÷95,600) × 60,000 Finishing (3,596,000÷76,800) × 40,000 Packaging and shipping (468,000÷5,140) × 2,000
Materials handling (624,800÷3,320,000) × 640,000 Overhead allocated to Shafts: Production scheduling (232,000÷140) × 40
451,663 132,571 131,455 1,027,083 4,031,799 1,872,917 182,101 7,829,589
120,443 66,286
Set ups (289,200÷88) × 20 Manual machinery (1,972,000÷76,800) × 20,000 Automated machinery (6,424,000÷95,600) × 30,000 Finishing (3,596,000÷76,800) × 20,000 Packaging and shipping (468,000÷5,140) × 3,000 Overhead allocated to Chassis: Materials handling (624,800÷3,320,000) × 280,000 Production scheduling (232,000÷140) × 20 Set ups (289,200÷88) × 28 Manual machinery (1,972,000÷76,800) × 16,800 Automated machinery (6,424,000÷95,600) × 5,600 Finishing (3,596,000÷76,800) × 16,800 Packaging and shipping (468,000÷5,140) × 140 Total overhead applied to the three jobs
3,991,508
52,694 33,143 92,018 431,375 376,301 786,625 12,747
1,784,903 13,606,000
7. Direct materials (4,000×160) Direct labor (20,000×25) Overhead Manufacturing cost of product Shafts 8.
65,727 513,542 2,015,900 936,458 273,152
640,000 500,000 3,991,508 5,131,508 Accommodation
Administration: (640,000×30/50) (640,000×20/50) Building maintenance: (750,000×60%/80%) (750,000×20%/80%) Total support cost
Food section
384,000 256,000 562,500 946,500
187,500 443,500
9. Prime cost 820,000 Overhead (2,000,000×280,000/1,000,000) 560,000 Total cost for Camella Prestige Corporation 1,380,000
10. Selling (45,000×2/900)
100
Alteration (12,000×6/200) Cleaning and Preparation (60,000×10/750) General overhead (43,650×2/900) Total costs assigned to Gerry Punch
360 800 97 1,357
CHAPTER 6- JOB ORDER COSTING Summary of Answers Exercise 6-1 (Table) Exercise 6-2 1.AD P12 FD P8
e. P48 000 FI.a P52 000 b.P88 000 c. P80 000 d. P60 000 e. P24 000
e.P95 500 FI.a.P52 000 b.P88 000 c.P80 000 d.P60 000 e.P24 000
2.AD.a P96 000 b. P168 000 c. P108 000 d. P72 000
3.ADa.P165 000 b.P275 000 c.P197 500 d.P155 000
4.ADaP109560 b.P179 600 C.P130 700 d.-
Test Material 1 1.P315.6 2.P78 000 P130 000 P90 000 3. 1.6 4.P32 000 5.P60 700 6.P98 600 7.P81 500 8.P777 995
9.P1 860 000 10/11.P1 216.58 12.entry 13.P3193 14.P642 500 15.P36 000 16.P50 17.P52.65 18.P61 440 19.P128 640 20.P136.32
Test Material 2 1.P45 500 2.P4 320 000 3.P1 995 000 4.P449 333 5.P2333.33 6.P490 800 7.P98 800 8.P4 130 000 9.P5 114 286 10.P1 184 286
e.Exercise 6-3 1.P93 000 2.P75 000 3.P75 000 4. P4 800 5. P38 400 6. P80 800 Exercise 6-4 1. (T-accounts) 11.P9 500 12.P1 932 750 13.P10 180 14.P30/11 15.P281795 P316 440 P378700 16. P31765 P15700 P17860 17.P313650
2.a.P1 100 000 b.P1 082 000 c.P1 374 500 d. entries 3. (FS) Exercises 6-7 to 6-9 (Entries)
P332140 P396560 18.P448071.43 P474485.71 P566514.29 19-20 Entries
Test Material 3 Test Material 4 1.A 11.A 21.A 1.A 11.A 2.D 12.C 22.D 2.B 12.B 3.A 13.A 23.A 3.A 13.B 4.D 14.D 24.E 4.A 14.B 5.A 15.B 25.B 5.A 15.A 6.B 16.C 6.B 16.A 7.B 17.E 7.D 17.A 8.C 18.C 8.D 18.A 9.B 19.A 9.D 19.B 10.C 20.E 10.D 20.C ______________________________________________________________________________ COMPUTATIONS
Exercise 6-2. Manufacturing Overhead - Assembly Divided by Direct Labor Hours - Assembly Predetermined Overhead rate - Assembly
/
960,000 80,000 12
Manufacturing Overhead - Finishing Divided by Machine Hours - Finishing Predetermined Overhead rate - Finishing
/
600,000 75,000 8
Overhead applied to production: Assembly Department Job Alpha ( 8000 x 12 ) Job Beta ( 14000 x 12 ) Job Charlie ( 9000 x 12 ) Job Delta ( 6000 x 12 ) Job Echo ( 4000 x 12)
96,000 168,000 108,000 72,000 48,000
Finishing Department Job Alpha ( 6500 x 8 ) Job Beta ( 11000 x 8 ) Job Charlie ( 10000 x 8 ) Job Delta ( 7500 x 8 ) Job Echo ( 3000 x 8 ) Total Cost to Manufacture Each Job Assembly Direct Materials Direct Labor Alpha ( 8000 x 5.5 ) Beta ( 14000 x 5.5 ) Charlie ( 9000 x 5.5 ) Delta ( 6000 x 5.5 ) Echo ( 4000 x 5.5 ) Factory Overhead Total Finishing
52,000 88,000 80,000 60,000 24,000
Job Alpha 25,000
Job Beta 30,000
Job Charlie 40,000
492,000
304,000 796,000
Job Delta
Job Echo
50,000
25,000
170,000
22,500 48,000 95,500
226,000 492,000 888,000
Total
44,000 77,000 49,500 33,000 96,000 165,000
168,000 275,000
108,000 197,500
72,000 155,000
Direct Materials Direct Labor Alpha ( 1800 x 5.5 ) Beta ( 2000 x 5.5 ) Charlie ( 3500 x 5.5 ) Delta ( 3200 x 5.5 ) Echo ( 2800 X 5.5 ) Factory Overhead Total
12,000
25,000
30,000
2,000
5,000
74,000
15,400 24,000 44,400
73,150 304,000 451,150
9,900 11,000 19,250 17,600 52,000 73,900
88,000 124,000
80,000 129,250
60,000 79,600
Gross Profit assuming the jobs are sold at cost + 40% mark - up : Job Alpha Job Beta Job Charlie Job Delta Assembly 165,000 275,000 197,500 155,000 Finishing 73,900 124,000 129,250 79,600 Total 238,900 399,000 326,750 234,600 Add: Beginning Balance 35,000 50,000 Balance 273,900 449,000 326,750 234,600 Multiply by x x x Mark-up 1.4 1.4 x 1.4 1.4 Sales Price 383,460 628,600 457,450 328,440 Cost of Sales 273,900 449,000 326,750 Gross Profit 109,560 179,600 130,700 -
Job Echo 95,500 44,400 139,900 139,900 x 1.4 -
Total 888,000 451,150 1,339,150
1,424,150
419,860
Exercise 6 - 3 1. Work in Process - Obama Work in Process - Nixon Work in Process - Bush Total Work in Process - July Less: Cost of Jobs Completed Work in Process, end
52,000 41,000 12,000 105,000 (12,000) 93,000
2. Work in Process, beginning Add: Work in Process- Obama Work in Process- Nixon Work in Process- GMA Work in Process- FVR Total Less: Job Completed - Obama (52000 + 44000) Work in Process, end
93,000
44,000 39,000 47,000 39,000
111,000 277,000 (202,000) 75,000
3. Work in Process, beginning Add: Work in Process - Nixon Work in Process - GMA Work in Process - FVR Total Less: Jobs Completed Nixon (41000+39000+30000) GMA (47000 + 45000) Work in Process, end
111,000 277,000
110,000 92,000
4. Jobs Completed - July Multiply by Gross Profit Rate Gross Profit - August 5. Jobs Completed - August (52000+44000) Multiply by Gross Profit Rate Gross Profit - September 6. Jobs Completed - September Nixon (41000+39000+30000) GMA (47000+45000) Multiply by Gross Profit Rate Gross Profit - October
166,000
30,000 45,000 36,000
(202,000) 75,000 x
12,000 0.4 4,800
x
96,000 0.4 38,400
x
202,000 0.4 80,800
110,000 92,000
Exercises 6 - 4
Raw Materials Beg. Bal.- 100,000 500,000 - Issued Purchases - 650,000 End. Bal. - 250,000
Work in Process Beg. Bal.- 232,000 1,082,000 - Completed Materials- 475,000 Direct Labor- 250,000 Overhead- 375,000
End. Bal -
250,000 Finished Goods
Beg. Bal. - 720,000 1,374,500 - Jobs Sold Completed-1,082,000 End. Bal- 427,500
Cost of Sales Jobs Sold- 1,374,500
Manufacturing Overhead Indirect Mat. - 25,000 375,000 - Applied OH Indirect Labor-75,000 Insurance - 30,000 Rent 60,000 Maintenance - 12,000
Electricity - 36,000 Tax&Licenses-12,000 Misc. Cost - 20,000 Overapplied - 105,000
Job 500 - Sold Beginning Balances Add: Direct Materials (500,000 x 25%) Direct Labor (250,000 x 25%) Factory Overhead (62,500 x 150%) Total
Direct Materials 22,000 125,000
Direct Labor 48,000
Factory Overhead 72,000
62,500 147,000
110,500
93,750 165,750
Direct Materials 15,000 150,000
Direct Labor 30,000
Factory Overhead 45,000
165,000
105,000
Job 600 - Completed and in the warehouse
Beginning Balances Add: Direct Materials (500,000 x 30%) Direct Labor (250,000 x 30%) Factory Overhead (75,000 x 150%) Total
75,000 112,500 157,500
Job 700 - Unfinished Direct Materials (500,000 x 25%) Direct Labor (250,000 x 20%) Factory Overhead (50,000 x 150%)
Direct Materials 125,000
Direct Labor 50,000
75,000
Job 800 - Sold Direct Materials (500,000 x 15%) Direct Labor (250,000 x 25%) Factory Overhead (50,000 x 150%) 2.) (a.) Direct Materials (500,000 x 95%) Direct Labor Factory Overhead (250,000 x 150%) Total Factory Cost
Factory Overhead
Direct Materials 75,000
Direct Labor
Factory Overhead
62,500 93,750 475,000 250,000 375,000 1,100,000
(b.) Work in Process, beginning Add: Factory Cost Total cost put into process Less: Work in process, end Cost of Goods Completed (c.) Balances Divided by Percentage Multiply by Overapplied Overhead Adjusted Amount Cost of Goods Manufactured Add: Finished Goods,beginning Cost of Goods Available for Sale Less: Job Unsold Cost of Goods Sold Less: Overapplied overhead Cost of Sales - Adjusted (d.) Work in Process, beginning Add: Direct Materials Direct Labor Factory Overhead Total Less: Job Completed Overapplied Overhead Work in Process, end Finished Goods, beginning Add: Jobs Completed Total Less: Jobs Sold Job 500 Job 400 Job 300 Job 800 Balance Less: Overapplied Overhead Finished Goods, end
232,000 1,100,000 1,332,000 (250,000) 1,082,000 Finished Goods 427,500
Cost of Sales 1,374,500
/ / 2,052,000 2,052,000 0. 0. 1218 2083 x x 105,000 105,000 12,789 21,872
/ 2,052,000 0. 6698 x 105,000 70,329
Work in Process 250,000
1,082,000 720,000 1,802,000 (427,500) 1,374,500 (70,329) 1,304,171 232,000 475,000 250,000 375,000
1,100,000 1,332,000 (1,082,000) (12,789) 237,211 720,000 1,082,000 1,802,000
423,250 320,000 400,000 231,250
(1,374,500) 427,500 (21,872) 405,629
Beginning Balance Add: Raw Materials Purchased Total Less: Materials used in production Raw Materials, end
100,000 650,000 750,000 (500,000) 250,000
3.) Manila Manufacturing Company Statement of Cost Manufactured and Sold September 30, 2012 Work in Process,beginning Add: Direct Materials Direct Labor Factory Overhead Total Cost Put into Process Less: Work in Process,end Cost of Goods Manufactured Add: Finished Goods,beginning Less: Finished Goods,end Cost of Goods Sold
232,000 475,000 250,000 375,000
1,100,000 1,332,000 (237,211) 1,094,789 720,000 (405,629) 1,409,161
Exercises 6-5 Work in Process,beginning Less: Direct Materials (6000+8000) Direct Labor (3000+2500) Factory Overhead Divided by Direct Labor Overhead Rate Direct Materials issued to production: Job 101 - 3,000 Job 102 - 2,000 Job 103 - 6,000 Job 104 - 4,500 Add: Raw Materials, end Less: Raw Materials, beginning Raw Materials Purchased Entries: (1) Raw Materials Cash
/
22,800 (14,000) (5,500) 3,300 5,500 0. 6
15,500 18,000 (15,000) 18,500 18,500
18,500
(2) Work in Process Raw Materials
15,500 15,500
(3) Factory Payroll Cash
7,500
(4) Work in Process Factory Payroll
7,500
(5) Finished Goods Work in Process
32,440
7,500 7,500
Job 1 Direct Materials Direct Labor Manufacturing Overhead (4400 x 0.6) (4000 x 0.6) Total
9,000 4,400
32,440 Job 2 10,000 4,000
Total 19,000 8,400
2,400 16,400
5,040 32,440
2,640 16,040
Exercise 6-6 CASE A (a) Work in Process Raw Materials Payroll Manufacturing Overhead (b) Spoiled goods Manufacturing Overhead Work in Process (c) Finished goods Work in Process (d)
(e)
720,000 300,000 180,000 240,000
32,000
16,000 48,000 672,000 672,000
Accounts Receivable Sales
1,008,000
Cost of goods sold Finished goods
672,000
COST PER UNIT CASE B
1,008,000
672,000 480
(a)
Work in process Raw Materials Payroll Manufacturing Overhead
5,320,000
(b)
Work in process Raw Materials Payroll Manufacturing overhead
100,000
Finished goods Work in Process
5,320,000
(c) (d)
Accounts Receivable Sales Cost of goods sold Finished goods EXERCISE 6-7 (a) Work in Process Material Payroll MOH
20,000 32,000 48,000 5,320,000 8,512,000 8,512,000 5,320,000 5,320,000
870,000 625,000 120,000 125,000
Work in Process Factory payroll Manufacturing Overhaead
19,600
Finished Goods Work in process
889,600
(b) Work in Process Material Direct Labor MOH Spoild
Work in Process
1,320,000 1,600,000 2,400,000
9,600 10,000 889,600 4,840,000 1,320,000 1,600,000 1,920,000 50,000
Finished Goods(4840000-50000) Work in Process
4,790,000
Account Receivable Sales
10,538,000
50,000 4,790,000 10,538,000
Cost of Good sold Finished Goods
4,790,000
EXERCISE6-8 Work in Process Material Labor MOH
158,750
Spoild Goods MOH Work in Process
4,000 11,875
Finished Goods Work in process
143,875
Accounts Receivable Sales
36,000
Cost of Goods Sold Finished Goods
142,875
4,790,000
40,000 56,250 62500
15,875 143,875 36,000 142,875
Test Material 1 1.) MOLDING
PAINTING
FACTORY OVERHEAD
602,000
735,000
Divide By: MACHINE HOURS
70,000
420,000
OVERHEAD RATE Direct Materials 47,000 + 63,200 = Direct Labor 9,000 + 68,000 = Overhead (1,100 x 8.6) = (1.75 x 68,000) = Total Manufacturing Cost Divide By: (No. Of Units) Unit Product Cost
8.6 110,200 77,000 9,460 119,000 315,600 100 315.60 =======
2.) Purchases of Raw Materials Raw Materials, Beginning Raw Materials Available
290,000 18,000 308,000
1.75
Prime Cost Direct Labor Cost Direct Materials Add: Raw Materials Available Raw Material lost from Fire
410,000 180,000 230,000 308,000 78,000 ======
Conversion Cost (180,000/30%) Less: Direct Labor Overhead Add: Prime Cost Total Manufacturing Cost Work in Process Cost of Goods Manufactured (830,000-65,000) Work in Process Lost from Fire
600,000 180,000 420,000 410,000 830,000 65,000 (765,000) 130,000 ======
Cost of Goods Available for Sale Less: Cost of Goods Sold (Sales 1,200,000 x 60%) Finished Goods Lost from Fire
810,000 720,000 90,000 ======
3.) JOB #105 20,800 OVERHEAD 13,200
#106 + +
11,200 7,000
= 1.6 4.)
Direct Labor Job#105 Job#106 Job#107
Multiply By Predetermined OH Rate Total OH Cost Applied During June 5.) Job # 105 May Costs: Direct Materials Direct Labor Overhead
4,000 6,000 10,000
20,000 1.6 32,000 =====
16,500 13,000 20,800
50,300
Add: June Costs: Direct Materials ---------Direct Labor 4,000 Overhead (4,000 x 1.6) 6,400 Total Cost of Goods manufactured
10,400 60,700
6.) May Costs: Direct Materials Direct Labor Overhead Add: June Costs Direct Materials 8,200 Direct Labor 6,000 Overhead (6000 x 1.6) 9,600 (10,000 x 1.6) Total May and June Costs
9,300 7,000 11,200 21,300 10,000 23,800
16,000 51,300 47,300 ======================== Total May and June Costs of Job#106 51,300 Add: Total may and June Costs of Job#107 47,300 Bal. Of Work in Process for the Period 98,600 =====
7.)
JOB # 105
106
June Costs: Direct Materials -------8,200 Direct Labor 4,000 6,000 Overhead 6,400 9,600 Total Amount Debited to Work in Process in June
107 21,300 29,500 10,000 20,000 10,000 32,000 81,500 =====
8.) Costs for Manufacture of 10 Units of Urvan Escapade: Materials 5,000,000 Labor (31,250hrs x 45) 1,250,000 OH (1,250 x 1.2) 1,500,000 7,750,000 Cost of units Requiring Rework: Materials 25,000 Labor (50 x 45) 2,250 OH (2,250 x 1.2) 2,700 29,950 Total Cost 7,779,950 Divide By: Number of Units 10 Manufacturing Cost per Unit 777,995 ======== 9.) Cost of Normal Units 7,750,000 Divide By: No. Of Units 10 Cost per Unit 775,000 Multiply 2.4
TOTAL
Billing Price Per Unit 10.)
11.)
Cost per Pair of Marikina Shoe Company Materials Labor Overhead (125% of DL) Manufacturing Cost/Good Unit
1,860,000 ========
Manufacturing Cost per Good Unit Multiply By: No. Of Good Units Less: Salvage Value Divide By: No. Of Good Units Manufacturing Cost per Unit
12.)
200.00 450.00 562.50 1,212.50 ======= 1,212.50 10,000 12,125,000 20,000 12,105,000 9,950 1,216.58 =========
Work in Process Manufacturing Overhead Accrued Payroll
30,000 30,000 60,000
13.)
BAKER COMPANY FABRICATING Direct Materials Direct Labor (429/1.5) Overhead (15 x 18) Total Cost of Job # 639 14.)
1,590 286 429
MARGARITA COMPANY Raw Material, Purchases Less: Raw Materials increased by Materials Beginning Less: Indirect Materials Direct Materials Total Changes to Work in Process Less: Direct Materials Factory Overhead Direct Labor Component of Job#500
FINISHING
TOTAL
570 48
2,160 334
270
699 3,193 =====
135,000 (75,000) 60,000 (20,000) 40,000 960,000 (40,000) (277,500) 642,500
======== 15.)
Number of Employees Multiply: No. Of days
50 2 100 8 800 45
Multiply: No. of Hrs Worked Multiply: Amount of Direct Labor Charged To the Order 16.)
Work in Process Cost of Goods Sold Finished Goods Divided By: Predetermined Overhead Rate
17.)
36,000 ======= 460,000 1,440,000 500,000 2,400,000 48,000 50 =======
Work in Process, beg. Direct Material Direct Labor Factory Overhead Debits to Finished Goods Work in Process, end. Factory Overhead = 80 % x Direct Labor = 80 % x 20 250 = 16 200 Total Cost Direct Labor Factory overhead Direct Material
18.)
PW 100, Direct Labor Multiply: Overhead Applied to Direct Labor Cost Add: Direct Labor Cost of Job PW 100, Beg. Of Month
19.)
Direct Labor Overhead (42,000 x 60%) Cost Add: Cost of Job PW 100, Beg
40 500 243 000 162 000 129 600 ( 486 000 ) 89 100
89 100 20 250 16 200 52 650
38,400 60% 23,040 38,400 61,440 ======== 42,000 25,200 67,200 61,440
20.)
Cost of Job PW 100, End of Month
128,640 ======
Total Direct Labor Costs for All Jobs Completion Cost Required for PW100 in DL Labor Used in PW200 Direct Labor Charged to PW300 Add: Overhead (85,200 x 60%) Cost of Job PW300
247,200 (42,000) (120,000) 85,200 51,120 136,320 ======
Test Material 2 1.) Fixed Overhead Add: Over applied Overhead Applied Overhead Divide By: Machine Hrs Worked during the Period 2.)
Total Hours Less: Not Billable to Clients Number of Hours Multiply: Amount Billed to Clients Revenue
3.)
Revenue Direct Labor (3,600 x 450) Overhead (450,000/40,000) x 3,600 Gross Profit Less: Expenses Net Profit
4.)
Material Cost Direct Labor Cost (2,500 x 38.5) Factory Overhead (5 x 25000) + 50,000 Total Cost Multiply: Sold Swimsuits Divide: Production Divide By: Sales Revenue
320,000 44,000 364,000 8 45,500 ====== 4,000 400 3,600 1,200 4,320,000 ======= 4,320,000 (1,620,000) (405,000) 2,295,000 (300,000) 1,995,000 ======== 150,000 96,250 175,000 421,250 20,000 8,425,000,000 25,000 337,000 75% 449,333 =========
5.)
Sales Revenue Multiply: Gross Profit Rate Less: (20,000 x 2 + 70,000) Net Profit
6.)
Total Revenue 1st Quarter Less: TMC (494,000 x 80%) Less: Gen. and Admin. Expenses Net Income for the Quarter
7.)
Total Manufacturing Cost Multiply By: Finished Goods Inventory, End
8.)
Total Manufacturing Cost Add: Work in Process, Beginning Less: Work in Process, End Cost of Goods Manufactured Add: Finished Goods, Beginning Goods Available for Sale
9.)
Goods Available for Sale Less: Finished Goods Ending Cost of Goods Sold Divide By: Total Sales for the Period
10.)
Total Sales Multiply By: Less: Selling and Admin. Expenses Net Income for the Period
11.)
12.)
Total Factory Overhead (Variable OH 60,000 + Fixed PH 20,000) Divide: Units Factory Overhead/Unit Applied Overhead (79,000-3000) Divide By: FOH/Unit Number of Units Produced Work in Process:
449,300 25% 112,333 110,000 2,333.33 ========= 1,180,000 395,000 784,000 294,000 490,800 ======= 494,000 20% 98,800 ======== 3,430,000 400,000 150,000 3,680,000 450,000 4,130,000 ======== 4,130,000 550,000 3,580,000 70% 5,114,286 ======== 5,114,286 30% 1,534,296 350,000 1,184,286 ======== 80,000 10,000 8 76,000 8 9,500 ========
Beginning Balance Direct Materials Direct Labor Overhead Applied Less: Jobs Completed Job Alpha Job Beta Job Charlie Job Delta Coat of Unfinished Jobs 13.)
660,000 574,000 835,000 715,000 2,784,000 329,750 164,000 270,000 87,500
(851,250) 1,932,750 ======== 17,750 3,500 4,200 25,450 40% 10,180 ======
Direct Materials Direct Labor Applied Overhead (3,500 x 120%) Total Cost Multiply By: Gross Profit on Order
14.) DEPARTMENT 1 DEPARTMENT 2 1,560,000 1,760,000 52,000 16,000 30 11 =================================
Overhead Divide by: Machine Hours Direct Labor Hours Predetermined Overhead Rate 15.) JOB 100 Direct Materials 237,000 Direct Labor Hours (450 x 48) 21,600 (230 x 48) (300 x 48) 258,600 Add: (425 x 55) 23,375 (200 x 55) (260 x 55) Prime Cost 281,975
JOB 200 294,400
JOB 300 350,000
11,040 305,440
14,400 364,400
11,000 14,300 378,700
316,440
============================================ 16.) JOB#100 Direct Labor Hrs-Dept.2 Multiply By: Predetermined
425
JOB#200 200
JOB#300 300
Overhead Rate-Dept.2
11 4,675
11 2,200
Add: Machine Hrs.-Dept. 1 x Predetermined OH Rate (900 x 30) 27,000 (450 x 30) 13,500 (500 x 30) Overhead Applied to Each Job 31,675 15,700 17.) Prime Cost Add: OH Applied To Each Job Total Cost 18.)
19.)
Total Cost Divide By: Billing Price
JOB#100 281,975
Multiply: Units Produced Work in Process
15,000 17,860
JOB#200 316,440
31,675 313,650 JOB#100 313,650 70% 448,071.43
15,700 332,140
JOB#300 378,700 17,860
396,560
JOB#200 332,140 70% 474,485.71
Work in Process Labor Rate Variance Payroll Labor Efficiency Variance Direct Labor Multiply: Cost/Hour
11 2,860
JOB#300 396,560 70% 566,514.29
24,000 395 24,095 300 STANDARD .40 Hours 12 4.8 5000 24,000
ACTUAL 1,975 12.20 Payroll 24,095
20.) Work in Process (10,000 x 3.25) Material Quantity Variance Material Inventory (10,500 x 3.15) Material Price Variance Difference in Price Direct Material Used Material Price Var.
3.25 3.15 .10 10,500 1050 ====
32,500 1,625 33,075 1,050 Units Produced 5,000 Multiply:
2 10,000 Less: 10,500 Multiply: 3.25 Material Quantity Var. 1,625
TEST MATERIAL 3 1.)
Manufacturing Overhead-G101 Divide by: Direct Labor-G101 Predetermined OH Rate Multiply: Direct Labor-G102 Overhead Charged to G-102
2.) DEPARTMENT 1 Manufacturing OH Divide By: Direct Labor Cost Add: Direct Materials MOH
429 1.5 286 1,590 429
DEPARTMENT 2 Machine Time Multiply: MOH Add: Direct Materials Direct Labor Cost Total Cost of Job-H200
3. Raw Materials: (120,000 x 30%) (120,000 x 25%) (120,000 x 25%) Add: Direct Labor (2,500 x 8.5) (3,100 x 8.5) (4,200 x 8.5) Prime Cost
255 510 .5 289 A. 144.50 =====
2,305
15
18 270
580 48
A101 36,000
21,250
898 D. 3,203 =====
B101
TOTAL
30,000
96,000
35,700
83,300 A.179,300 ======
30,000
26,350
4.) B101 Direct Labor Cost Multiply: Total Amt. Of OH Apllied to Job B-101 5.)
C101
Direct Materials ( 120 000 x 80%) Direct Labor ( 2 500 + 3 100 + 4 200) x 8.50 Prime Costs
26,350 120% D. 31,620 ====== 96 000 33 300 179 300
======= 6.) Manufacturing Overhead Divide By: Direct Labor-Job 300
JOB 300 7,200 120% A. 6,000 =======
7.)
JOB 400 2,000 9,000 10,800 B. 21,800 ======
Direct materials Direct Labor Manufacturing OH (9,000 x 120%) Total Cost- Job 400
8.) Direct Material Used Direct Labor Manufacturing OH Total Manufacturing Cost Add: Work in Process, Beg Goods Put into Process Less: Work in Process, End Cost of Goods Manufactured
9.)
Cost of Goods Manufactured Add: Finished Goods, Beg Cost of Goods Available for Sale Less: Finished Goods, End Cost of Goods Sold
10.)
Total Factory Costs Raw Materials Used Conversion Costs divide by: Direct Labor 11.) Total Manufacturing Cost Add: Work in Process, Beg Goods Put Into Process Less: Work in Process, End Cost of Goods Manufactured 12.& 13.
10,400 8,000 8,800 27,200 2,400 29,600 1,800 C. 27,800 =======
27,800 1,200 29,000 1,000 B. 28,000 ===== 686 000 386 000 360 000 1.60 C. 225 000 686,000 80,000 766,000 30,000 A. 736,000 ======
Raw Materials beg. Raw Materials purchased Raw Materials end. Raw Materials used Direct Labor ( 39 800 x 42.5) Overhead ( 1 691 500 x 80%) Total Factory Cost WIP, beg. WIP, end. ( 354 000 + 80 000) Cost of Goods Manufactured
134 000 1 093 400 ( 250 000) 977 400 1 691 500 1 353 200 A. 4 022 100 354 000 (434 000) A. 3 942 100
15. Office Salaries Utilities Cost ( 17 400 x 40%) Depreciation Rent Expense (24 000 x 40%) Period Costs incurred - July 16. Direct Materials Direct Labor Factory Overhead Indirect Materials Indirect Labor Utilities Cost (17 400 x 60%) Depreciation Rent (24 000 x 60%) Total Factory Costs 17. Total Factory Costs Work in Process, beg. Work in Process, end. Cost of Goods Manufactured Finished Goods, beg. Finished Goods, end. `Cost of Goods Sold Sales - 100% (203 840 x 2) Cost of Goods Sold - 50% Gross Profit - 50% 18. Raw Materials Requisitioned Indirect Materials Direct Materials issued to production 21. A.
42 200 6 960 10 000 9000 B. 68 760 42 400 100 000 5 000 14 000 10 440 18 000 14 400
61 840 C. 204 240 204 240 26 000 16 600 213 640 10 000 19 800 203 840 407 680 203 840 E. 203 840 148 500 19 00 C. 129 500
Cost of Sales Work in Process
4 500 4 500
24.. Materials used Direct Labor Overhead Total Cost of Job 100 Gross Margin rate Gross Margin 23.
Job 100: 7 440 108 000 135 000 250 440 x 25% A. 62 610
( 3 600 x 30) ( 3 600 x 37.50)
Materials Labor Overhead Total amount remove from WIP
12 000 1 500 4 500 A. 18 000
TEST MATERIAL 4 1.
Finished goods inventory Cost of Goods Sold Cost of Goods Completed Finished Goods, beginning balance
2.
6.
49 500 74 500 (102 000) A. 22 000
Materials requisitioned (37 200 + 35 200) Direct Labor Costs (14 400 + 17 500) Overhead costs (360 + 400) x P30 Cost of Goods Manufactured
72 400 31 900 22 800 B.127 100
Raw Materials Inventory, beg. Raw Materials purchases Materials requisitioned Raw Materials Inventory, end.
7.
Total Manufacturing costs Goods Completed Loss from Spoilage 8.
B.
30 000 5 000 (7 300) 27 700
(99 000 x 52000 / 55 000)
Job B4: Direct Materials (14 000 + 3 000) Direct Labor Costs (14 400 + 17 500) Overhead: Machining Finishing
17 000 31 900 6 617 2 408. 50
99 000 93 600 5 400
9 025.50
Total Manufacturing Costs No. of Units Manufacturing cost per unit Machining: Manufacturing OH Machine Hours OH rate Actual Machine Hours OH applied Finishing: Manufacturing OH DL costs OH rate Actual DL costs OH applied
27 875.50 ÷ 200 A.139.38
11 200 000 ÷ 220 000 50.91 x 130 6 617 7 900 000 4 100 000 1.9268 1 250 2 408.50
10. From Tanning Dept. (10 sq .ft. x P3) x 200 From Assembly Dept. (3MH x P9) x 200 From Saddle Dept. (10 DLH x P4) x 200 Total OH applied to Job 305
6 000 5 400 8 000 D.19 400
11. Direct Labor (10 DLH x P8) x 200 OH applied Conversion Costs
25 000 19 400
12.. Direct Materials (10 sq. ft. x P12.50) x 200 Direct Labor Cost Prime Costs
25 000 16 000
13.. Direct Materials Direct Labor Cost OH applied Total Manufacturing costs No. of sets Manufacturing Costs per set 14.
A.35 400
B.41 000 25 000 16 000 19 400 60 400 200 B. 302
Material cost : Material related OH Cost of materials used on jobs OH rate Machine Time: Machine related OH Machine hours OH rate
1 280 000 3 200 000 .40 2 200 000 400 000 5.5
Budgeted overhead (42000 + 16400 + 78 000) x .40 (17000 + 9000 + 5800) x 5.5 Actual Overhead Total amount of OH variance (underapplied) 15.
16.
Materials Costs Direct Labor Applied Overhead Total cost of Job X2
113600 174900 185600
(42 000 x .40) + (17 000 x 5.5)
Direct Labor Overhead applied - Job 657
17. Total WIP at the end of the mo. Total costs of other jobs Less: Direct labor cost - Job 750 (714 x 2) OH applied - Job 750 Direct Materials included in Job 750 18. Direct Materials Direct Labor Applied Overhead Total Factory Costs 19.
Direct Labor hours Direct Labor per hour Direct Labor Costs
288 500 118400 304 000 B.15 500 42 000 32 000 110 300 A. 184 300 289 ÷ 2 A.144.50
6 800 3 981 2 819 1 428 714 A. 677
(10 000 + 20 000 + 15 000) (5 000 + 4 000 + 2 500) (11 500 x 2)
45000 11500 23000 79500
(2 500 + 3 100 + 4 200)
9 800 x 8.50 83 300
Total applied Overhead
120% B. 99 960
20.
Direct Materials [120 000 x (30% + 25%)] Direct Labor (2 500 + 3 100) x 8.50 Applied Overhead (47 600 x 2) Work in Process, ending balance
66 000 47 600 57 120 C. 170 720
21.
Actual quantity Standard price - actual price [ 9.90 - (10 000/1 000)] Unfavorable Material Price Variance
1 000 x .10 A. 100
22.
Standard Price Standard quantity - Actual quantity [( 9.90 x 10 000) 10 000] Unfavorable Material Price Variance
9.90
23.
Standard Direct Labor Hours Standard Rate per DLH Amount of Labor charged to WIP
24.
Units Completed Standard Cost per Unit ( 4 x 3) Materials Component of work Completed
26.
Units reworked Direct Labor + Overhead (12 + 18) Charged to Manufacturing Overhead
x 100 C. 990 12 000 x 24 B.228 000 3 000 x 12 A. 36 000 100 x 30/unit C. 3 000
PROBLEMS Problem 6-1 JOURNAL ENTRIES a. Raw Materials Accounts Payable
826,000
b. Work in Process Manufacturing Overhead Raw Materials
755,000 30,000
c. Manufacturing Overhead Cash
116,000
d. Manufacturing Overhead Accumulated Depreciation
190,000
e. Marketing and Administrative Expense Cash f. Work in Process Manufacturing Overhead Factory Payroll g. Factory Payroll SSS, PhilHEALTH, Pag-IBIG Payable Accrued Wages Payable h. Work in Process Manufacturing Overhead i. Expenses
Cash
j. Manufacturing Overhead Insurance Expenses Prepaid Insurance k. Accounts Receivable Sales Cost of Sales
826,000
785,000 116,000 190,000
250,000 1,000,000 250,000
250,000 1,250,000
1,000,000 200,000 800,000 800,000 800,000 56,000 40,000 10,000
56,000
50,000
254,800 254,800 182,000
Finished Goods l. Manufacturing Overhead Miscellaneous Expense m. Finished Goods
182,000 500,000 500,000 2,490,000
Work in Process
2,490,000
Accounts Receivable Sales
254,800 254,800
Cost of Sales Finished Goods
1,345,000 1,345,000
Cost of Sales Manufacturing Overhead
76,000 76,000
T – ACCOUNTS Raw Materials Inventory
Work in Process Inventory
Beg.
168,000
Beg.
210,000
Purchases
826,000
Materials
755,000
Labor
1,000,000
MOH
800,000
Issuance Balance
785,000 209,000
2,490,000 Balance Finished Goods Inventory Beg.
182,000
209,000 Manufacturing Overhead 30,000
182,000 2,490,000
116,000 190,000
1,345,000 Balance
1,145,000
800,000 40,000 500,000 Underapplied
Cost of Sales
Sales
182,000
254,800
1,345,000
1,883,000
Underapplied 76,000 Balance
76,000
1,603,000
Bal.
2,137,800
JOB COST SHEETS JOB 101 Completed and in warehouse Materials
Labor
Overhead
Beginning WIP Additions
TOTAL 105,000
180,000
150,000
120,000
450,000
Total
555,000
To FG
(555,000) 0
JOB 102 Completed and in warehouse Materials
Labor
Overhead
Beginning WIP Additions
TOTAL 105,000
125,000
200,000
160,000
485,000
Total
590,000
To FG
(590,000) 0
JOB 103 Completed and sold
Beginning WIP
Materials
Labor
Overhead
TOTAL
150,000
250,000
200,000
600,000
To FG
(600,000) 0
JOB 104 Completed and Sold Materials
Labor
Overhead
TOTAL
Incurred
205,000
300,000
240,000
To FG
745,000 (745,000) 0
JOB 105 Unfinished
Incurred
Materials
Labor
Overhead
TOTAL
95,000
100,000
80,000
275,000
__________________ Company Statement of Cost of Goods Manufactured For the Month Ended Raw Materials Inventory (Direct) Beginning Balance Purchases Raw Materials Available Ending Balance Total Raw Materials Used Less: Indirect Materials Total Direct Materials Used Direct Labor Manufacturing Overhead Total Current Manufacturing Cost Beginning Balance of WIP Account Total Cost Put into Process Ending Balance of WIP Cost of Goods Manufactured
168,000 826,000 994,000 209,000 785,000 (30,000) 755,000 1,000,000 800,000 2,555,000 210,000 2,765,000 1,895,000 870,000
PROBLEM 6-2 1. Purchases: Beginning ( 1,596 + 2,775 ) September 4 September 16 September 22 Issued: September 6 September 23 Ending Raw Materials on hand Divide by: Quantity of Raw Materials on hand, end 2. Peso Value of raw Materials, end
4,371 33,120 28,600 31,920 37,240 42,243
98,011 (79,483) 18,528 4.8 3,860
8,960 x 4.8
18,528
3. Direct materials ( 37,240 + 42,243 ) Direct Labor ( 23,680 + 25,960 ) Overhead ( 49,640 x 1.3 ) Factory Cost
P 79,483 49,640 64,532 P 193,655
4. Factory Cost Add: Work in Process, beginning Cost of Goods Put into Process Less: Work in Process, end Cost of Goods Manufactured, September 2010
P 193,655 15,112 208,767 208.767 0
5. Job No. 24-A 24-B 24-C 24-D
Direct materials
P
Direct Labor
Overhead
P 11,218 15,790 14,892 12,410 P 54,310
P 14,583.4 20,527 19,359.6 16,133 P 70,603
P 17,492 22,648 23,844 19,870 P 83,854
TOTAL P 43,293.4 58,965 58,095.6 48,413 P 208,767
Problem 6-3 a. Raw Materials Accounts Payable
2,500,000
b. Work in Process Manufacturing Overhead Raw Materials
2,489,000 36,000
c. Accrued Payroll Factory Payroll Administrative Payroll
3,500,000
d. Factory Payroll Administrative Payroll Withholding Tax Payable SSS Payable PhilHEALTH Payable Pag-IBIG Payable Cash / Wages Payable e. Work in Process Manufacturing Overhead Factory Payroll f. Employee Benefit Expense SSS Payable
2,500,000
2,525,000 2,200,000 1,300,000 2,200,000 1,300,000 230,000 83,600 28,000 76,000 3,082,400 1,540,000 660,000 2,200,000 208,500 104,500
PhilHEALTH Payable Pag-IBIG Payable
28,000 76,000
g. Manufacturing Overhead Accumulated Depreciation Prepaid Insurance Other Expenses
318,000
h. Work in Process Manufacturing Overhead
924,000
120,000 48,000 150,000 924,000
i. Finished Goods Work in Process
4,930,000
j. Accounts Receivable Sales
7,452,000
4,930,000 7,452,000
Cost of Goods Sold Finished Goods
4,968,000 4,968,000
k. Cost of Goods Sold Manufacturing Overhead
90,000 90,000
Chapter 7 – Process Costing System Summary of Answers TM3 1. B 2. A 3. B 4. B 5. A 6. A 7. E 8. E 9. C 10.E
Exercise 7-1 1.M 25000 L 23400 O 23400 2. 4.07
11. A 12. C 13. A 14. E 15. B 16. A 17. C
TM4 1. 0.6125 2. 3675 3.356280 4. 5000 5.N/A 6.48600 7.203000 8.8.9 9.45320 10.1500
3. 29.97 4. 1 285 000 5.1 075 175
11.80000 , 56000 12.95000 13.9600 14.3.42 15.3.99 16.N/A 17.N/A 18.80 800, 85 600, 86 400 19.N/A 20.N/A
6.A 7.D 8.A 9.C
TM5 1.71666.67 2.73333.33 3.71000 4.11 700 , 10 000 5. N/A 6. N/A 7. N/A 8.42500 , 45 500 9. N/A 10.N/A
16.A Problems 7-1 to .Problem 7-4
4.B 5.B 6.E 7.D
3.93610 4. 4700 Exercise 7-4 1. 35 000 2. 32 500 14.B 15.D 16.A 17.A 18.C 19.D 20.D 21.A 22.B 23.C 24.A
Exercise 7-6 1.C 2..D 3.C 4.C 5.B
10.A 11.D 12.B 13.C 14.B 15.C
25.B 26.A 27.D 28.B 29.C 30.B
4.D 5.D 6.D 7.D 8.C 9.D 10.B 11.C 12.C 13.B 14.B
TM2 1.E 2.A 3.A
(table) TM1 1.B 2.B 3.A 15.C 16.A 17.D 18.B 19.D
8.C 9.C 10.D 11.A 12.A 13.D 5.A 6.D 7.E 8.E 9.C 10.D 11.A 12.D 13.A 14.E 15.B
TM3 1.B 2,A 3.B 4.B
______________________________________________________________________________ COMPUTATIONS: EXERCISE 7-1 1
Actual Units
WIP, beg Started Units t account
5000 20000 25000
Completed WIP, beg Units accounted
23000 2000 25000
2
Total
WIP, beg Cost added Total cost
EUP Materials
23000 2000 25000 Materials 12000 36000 48000
Labor
23000 400 23400 Labor 6000 16000 22000
Overhead
23000 400 23400 Overhead 8000 20200 28200
divided by EUP Cost/EUP
4.07 93610
4 Materials direct labor overhead WIP, end Exercise 7-5
25000 1.92
23400 0.94
23400 1.21
3840 376 484 4700 Cost of Production Report Mantrade Manufacturing Company Equivalent Units of Production Units Materials 500 4000 4500
WIP, beginning Started Total Units to Account WIP, beginning (500x2/3) 333 Units Started & Completed (4000-800) WIP, ending (800x75%) Total Units as Accounted Assignment of Costs Work in process, beginning cost Materials (500x10x18) Conversion Total Costs Work in process, end. Materials (800x10x18) Conversion (800x75%x80)= 3000/2 Total Costs as Accounted Work in Process (4000x10x18) Material Price Variance (20-18)x42000 Material Quantity Variance (42000-40000)x18 Raw Materials (42000x20)
500 3200 800 4500
3200 3200 800 600 4000 4133 P 8325
P
90000 40000 144000 15000
130000 138325 159000 297325
720000 84000 36000 840000
Work in Process (4133x.5x30) Labor Rate Variance (35-30)x2600 Labor Efficiency Variance (2600-2066.5)x30 Payroll (2600x35)
61995 13000 16005
Work in Process (4133x.5)x20
41330
P91000
CC
Manufacturing Overhead Manufacturing Overhead Various Accounts
Exercise 7-6 Multiple Choices 1. D Unit costs: Materials Labor Factory Overhead Unit cost in ending inventory
41330 85000 85000
P1 2 3 P6
2. A Transferred Out WIP, end Total units to be accounted for
10,000 7,000 17,000
3. C
Material s
CC
Beginning Invty. Started Total Units to account for
10,000 10000
Units Transferred WIP, end Total units accounted for
7,000
7,000
7,000
3,000 10,000
3,000 10,000
1,500 8,500
27,000 10,000
39,950 8,500
2.70
4.70
Material s
CC
Costs Divide by: Total costs transferred to 2nd Department
7.4
4. C WIP, beg Started
40,000 240,000
Units to account for
280,000
Transferred out WIP, end Units accounted for
255,000
255,000
255,000
25,000 280,000
25,000 280,000
15,000 270,000
Material s
5. B WIP, beg. Started Units Account to for
17,000 82,000 99,000
Transferred Out WIP, end Units accounted for
85,000
85,000
14,000 99,000
14,000 99,000
Beginning Current Total Divide by: Cost per EUP
Cost 12,800 69,700 82,500 99,000 0.833
6. D
CC WIP, beg. Started Units to account for
15,000 42,000 57,000
Transferred out WIP, end Units accounted for
45,000
45,000
12,000 57,000
9,600 54,600
Materials ( 0*100) CC (4,000*40%*30) Transferred In (4,000*5) Costs assigned to WIP, end
0 4,800 20,000 24,800
7. D
8.C WIP, beg. Started Units to account for less: WIP, end Transferred out
7,000 32,000 39,000 2,500 36,500 Material s
CC
7,000 29,500
29,500
4,200 29,500
2,500 39,000
2,500 32,00
625 34,325
36,500
Material s 36,500
CC 36,500
2,500 39,000
2,500 39,000
625 37,125
Mat. A
Mat. B
CC
700 1,500
1,500
490 1,500
280 1,500
500 2,700
500 2,000
250 2,240
400 2,180
Mat.A
Mat. B
CC
9. B & 10. A WIP, beg. Started Units Account to for WIP,beg . Transferred Out WIP, end Units accounted for
7,000 32,000 39,000
11. D & 12. B Transferred Out WIP, end Units accounted for 13. C & 14. B WIP, beg. Started Units Account to for WIP,beg . Transferred Out WIP, end Units accounted for 15. C & 16. A
700 2,000 2,700
Beg. Current Divide by: EUP Cost per EUP
14,270 40,000 2,000 20
96.25
5,950 70,000 2,240 31.25
5,640 98,100 2,180 45
Problem1
Actual Units WIP, beg Started Units accounted for
3600 7800 11400
WIP, beg S&C Completed WIP, end Units as accounted
3600 6000 9600 1800 11400
Total WA WIP, beg Cost added Total EUP Cost/EUP
38.96
Materials WA FIFO
WA
3000 6000 9600 360 9960
FIFO
40.5
360 9360
Materials WA FIFO 9200 211760 211760 220960 9960 9360 22.18 22.62
transferred out (9600x38.96) Mat (1800x22.18) Labor (600x11.64) OH (9800x5.14) WIP, end
374016 39924 6984 50372 97280
cost of manufactured finished goods, beg( 400x22.18)
374016 8872
9600 600 10200
WA 4800 113900 118700 10200 11.64
EUP Labor FIFO
Overhead WA FIFO
2700 6000
2400 600
600 9300
Labor FIFO 113900 9300 12.25
9600 200 9800
200 8600
Overhead WA FIFO 2000 48400 48400 50400 9800 8600 5.14 5.63
cost of sales
382888
FIFO method: WIP, beg Cost to be done: Mat (3000x22.62) Labor( 2700x12.25) OH (2400x5.63) started andcompleted transferred out
16000 67800 33075 13512 243000 373447
Mat Labor OH WIP, end
8143 7350 1126 16619
cost of goods manufactured finished goods, end Cost of sales
373447 40500 413947
PROCESS 2 Actual Units WA WIP, beg Started Units accounted for
1200 9600 10800
WIP, beg S&C Completed WIP, end Units as accounted
1200 7200 8400 2400 10800
Total WA WIP, beg
Materials FIFO
WA
800 7200 8400 400 8800
FIFO
WA 8000
400 8400
Materials FIFO
EUP Labor FIFO
WA
Overhead FIFO
960 7200 8400 800 9200
WA 16500
800 8960
Labor FIFO
900 7200 8400 600 9000
600 8700
Overhead WA FIFO 33000
Transferred in WA FIFO 47300
Cost added Total EUP Cost/EUP
111.4
103.55
59500 67500 8800 7.67
59500 8400 7.08
154560 154560 302380 302380 374016 343447 171060 335380 421316 9200 8960 9000 8700 8800 8400 18.59 17.25 37.26 34.47 47.88 44.46
WA method: transferred out (8400x111.4) Mat (400x7.67) Labor (800x18.59) OH (600x37.26) Transferred in (400x47.88) WIP, end cost of goods sold finished goods, beg( 1000x111.4) cost of sales
935760 3068 14872 22356 19152 59448 935760 111400 1047160
FIFO method: WIP, beg transferred in, beg Cost to be done: Mat (800x7.08) Labor (960x17.25) OH (980x34.76) Started and completed cost transferred out WIP, end Mat. (400x7.08) Labor (800x17.25) OH( 600x 34.76)
cost of goods manufactured finished goods, end (1000x 103.55) cost of sales
57500 47300 5664 16560 31284
53508 74556 232864
2832 13800 20856 37488 232864 103550 336414
Problem 7-4
1. 2. 3. 4. 5. 6. 7.
Quantity of normal spoilage EUP for Material X EUP for Material Y EUP for CC Quantity of normal units spoiled Cost of goods manufactured Cost of abnormal spoilage charged to expense 8. Cost of units in process at end
4 500 44 200 22 100 66 300 3090 1 193 400 25 380 2 521 800
Solution: (1-5) F&T: IP, beg Started & Completed IP, end Spoiled Units: normal
18 000 55 800 6 000 4500
Materials 0 55 800 6000 3 090
CC 4500 55 800 1500 3 090
Abnormal As accounted
84 300
1 410 66 300
1 410 66 300
(6) 66 300 x P18= P1 193 400 (7) 1 410 x P 18= P 25 380 (8) 73 800 x 18= P 1 328 400 66 300 x 8= P 530 400 66 300 x 10= P 663 000 P 2 521 800
Test Material 1. 1. B Completed and Transferred IP, end EUP
Materials 190,000 30,000 220,000
Costs: IP, beg. Current Total Divide by: EUP Cost per EUP Multiply: Units transferred Costs associated with Units transferred
Materials 67,800 579,000 646,800 220,000 2.94 190,000
Costs: IP, beg. Current Total Divide by: EUP Cost per EUP Multiply: Units in Ip, end Costs associated with Units transferred
CC 29,300 248,900 278,200 214,000 1.3 24,000
Cost to account for
925,000
558,600
2. B
31,200
3. A
CC 190,000 24,000 214,000
End Less:DM (40,000*75%*3) CC (40,000*60%*1.31) Transferred out
EUP (WA) Less: Beg EUP (FIFO) Divide by: IP, beg Cost per EUP(FIFO)
90,000 31,440 803,560 Materials
CC
220,000 27,000 193,000 578,000 3
214,000 24,000 190,000 248,900 1.31
4. A
CC Beg. Started Units to Account for
2,000 8,000 10,000
Beg. Transferred out Normal Spoilage End EUP
2,000 5,000 500 2,500 10,000
Costs: Started Divide: EUP Cost per EUP Multiply: units completed CC transferred to next department
72,250 8,500 8.5 7,000 59,500
5. B
1,000 5,000 500 2,000 8,500
Cloth WIP, beg. Started Units Account to for
500 3,300 3,800
WIP,beg. Transferred Out WIP, end
500 2,950 350
100 2,950 245
Units accounted for
3,800
6. E WIP, beg. Started Units to account for
2,000 23,000 25,000
Transferred out WIP, end Units accounted for
20,000 5,000 25,000
7. E Beg. Current Total Divide by: EUP Cost per EUP
14.72
Beg Trans. In Materials CC Cost of Units
22500 34000 94000 144000 294500
3,295 Materials
CC
20,000 20,000
20,000 2,000 22,000
Materials CC 5,450 34,000 104,000 34,000 109,450 20,000 22,000 1.7 4.975
8. B
9. C Finished and transferred WIP-End total
40000 10000 50000
10. D WIP, beg. Started Units Account to for
5,000 24,250 29,250
WIP,beg. Transferred Out WIP, end
5,000 21,750 2,500
3,250 21,750 2,000
Transferred In 17,050 184,000 201,050 25,000 8.04
Units accounted for Cost per EUP: DM (144,000/27,000) DL (150,000/ 27,000) OH (40,000/27,000) 21,750*11.26 3,250*4.22 3,250*5.56 3,250*1.48 Total Cost of goods transferred to Molding Dept.
29,250
27,000
4.22 5.56 1.48 244,905 13,715 18,070 4,810 281,500 16,000 297,500
11. D 2000*4.22 2000*5.56 2000*1.48 Cost of IP, end in Mixing Dept.
8,440 11,120 2,960
40,000 - 8,000
32,000
43,000 - 11,000
32,000
22,520
12. C
13. D WIP, beg. Started Units Account to for
50,000 150,000 200,000
WIP,beg. Transferred Out WIP, end Units accounted for
50,000 125,000 25,000 200,000
DM
CC
TI
50,000 125,000 175000
5,000 125,000 16,250 146,250
125,000 25,000 150,000
14. B WIP, beg. Started Units to account for
40 80 120
Transferred out WIP, end Units accounted for
90 30 120
Cost per EUP: TI (127,200/120)
DM
CC
TI
90 0 90
90 15 105
90 30 120
Materials
CC
425,000 50,000 475,000
425,000 25,000 450,000
1,060
DM (36000/90)
400
CC (67,725/105)
645
15. D TI (30*1060) DM (0*400) CC (15*645) TOTAL
31,800 0 9,675 41,475
16. A WIP, beg. Started Units to account for
475,000 475,000
Transferred out WIP, end Units accounted for
425,000 50,000 475,000
DM (895000/475000) CC (4225000/450000) TOTAL
1.88 9.39 11.27
17. A Materials (50000*1.88) CC (25000*9.39) TOTAL
94,000 234,750 328,750
18. C
M
CC
TI
18,000 2,000 20,000
WIP, beg. Started Units to account for
4,000 16,000 20,000
Transferred out WIP, end Units accounted for
18,000 2,000 20,000
18,000 2,000 20,000
18,000 600 18,600
WIP, beg. Started TOTAL Divide: EUP Cost per EUP
94,000 164,000 258,000 60,000 4.3
44,400 272,800 317,200 52,000 6.1
10.4
Cost of F&T (WA): 50,000*10.4
520,000
Total costs accounted for (94000+ 44400+ 164000+272800) End Costs of units transferred
575,200 53,400 521,800
Transferred Out EUP IP, end
DM 50,000 60,000 10,000
19. D 20. D 21. A 22. B
23. C
24. A
DM (10000*4.3) CC (2000*6.1) Cost allocated to IP, end (WA)
43,000 12,200 55,200
CC 50,000 52,000 2,000
25. B DM (10000*4.1) CC (2000*6.2) Cost allocated tp IP, end (FIFO)
41,000 12,400
M (2,500*80%*20) CC (2500*60%*18) Cost of the 2500 units
40,000 27,000 67,000
53,400
26. A
27. D WIP, beg. Started Units Account to for
2,500 15,000 17,500
WIP,beg. Transferred Out WIP, end Units accounted for
2,500 14,500 500 17,500
Materials (15125*10)
151,250
28. B F&T (14500*22) M (500*10) CC (1000*12) Total cost transferred
319,000 5,000 12,000 67,000 403,000
29. C DM-ingredients (7,200*100%*0.35) DM- package (7200*0%*0.05) DL (7200*30%*0.07) OH (7200*30%*.13) IP, beg bal.
2,520 151.2 280.8 2,952
M
CC
500 14,500 125 15125
1,000 14,500 125 15,625
30. B
IP, end
7,200 144,000 151, 200 147,960 3,240
DM- Ing. (3,240*100%*.35) Dm- Package (3,240 * 0%* .05) DL (3,240*^0%*0.07) OH (3,240*60%*.13)
1, 134 136.08 252.72 1,522.80
Test Material 2. 1. E A Beg-WIP Started End-WIP EUP
7500 2500 10000
B 3500 7500 1250 12250
2. A
EUP WIP, beg. Started Units Account to for
20,000 120,000 140,000
WIP,beg. Transferred Out WIP, end Units accounted for
20,000 90,000 30,000 140,000
Cost per EUP: 372000/ 120000 Material cost in IP, end:
3.1
90,000 30,000 120,000
(3.1*30,000)
93,000
3. A
EUP WIP, beg. Started Units Account to for
5,000 24,250 29,250
WIP,beg. Transferred Out WIP, end Units accounted for
5,000 21,750 2,500 29,250
Cost per EUP: Material (114000/25000) CC (150000/25000) OH (40000/25000) Total cost per EUP
1,250 21,750 2,000 25,000
4.36 6 1.6 12.16
4. D
EUP WIP, beg. Started Units to account for
18,500 84,400 102,900
Transferred out WIP, end Units accounted for
90,100 12,800 102,900
90,100 12,800 102,900
5. C Completed & Transferred: Beginning Started End
13,875 71,600 2,560 88,035
6. D WIP, beg. Started Units to account for
10,000 10,000
Transferred out
8,000
DM
CC
8,000
8,000
WIP, end Units accounted for Cost per EUP: DM (33000/10000) CC (17500/8500) Cost of transferred out (8000*5.3) Cost of IP, end DM(2000*3.3) CC(500*2) TOTAL
2,000 10,000
2,000 10,000
500 8,500
71,840 4,160 24,000 100,000
71,840 4,160 18,000 94,000
3.3 2
42,400 6,600 1,000 7,600
7. D Transferred out Completed & on hand WIP, end Units accounted for
71,840 4,160 24,000 100,000
8. C EUP,WIP-beg Units,WIP-beg Ratio
12000 20000 60%
Total Converted WIP-Beg
100% 60% 40%
9. D Started & completed (50000- 20000)
30,000
10. B Cost assigned to unit transferred out started & completed (77000*2.50) Added costs: DM (0*1) CC (13000*1.50) Normal spoilage: DM (3,500*1) CC (3500*75%*1.50)
192,500 19,500 3,500 3,938
Beg. Costs: DM CC Total costs assigned to units transferred out
15,000 10,000 244,438
Abnormal Spoilage: (5000*100%*1) (5000*75%*1.50) cost assigned to abnormal spoilage
5,000 5,625 10,625
11. C
12. C Cost of IP, end Material (14,500*1) CC (14500*70%*1.5) Cost of IP, end
14,500 15,225 29,725
13. B same solution as in no. 10 14. B same solution as in no.11 15. C
CC WIP, beg. Started Units to account for
2,000 8,000 10,000
Transferred out Normal spoilage WIP, end Units accounted for
7,000 500 2,500 10,000
Cost per EUP: (85500/9500) CC (7000*9) Normal Spoilage (500*9) CC transferred to next department 16. A 17. D WIP, beg.
7,000 500 2,000 9,500
9 63,000 4,500 67,500 DM 30,000
CC
Started Units Account to for
80,000 110,000
WIP,beg. Transferred Out WIP, end Normal spoilage (86000*3%) Abnormal spoilage(110000- 108580) Units accounted for
30,000 56,000 20,000 2,580 1,420 110,000
Cost per eup
56,000 20,000 2,580 1,420 80,000
3,150 56,000 15,000 2,580 1,420 78, 150
160,000 80,000 2
120,000 78,000 1.5355
18. B Cost associated with normal spoilage: DM (2,580*100%*2) CC (2,580*100%*1.5355) TOTAL
5,160 3,962 9,122
Cost associated With abnormal spoilage DM (1420*100%*2) CC (1420*100%*1.5355) TOTAL
2,840 2,180 5,020
19. D
b. Transferred out WIP, end Spoiled units EUP for DM
Test Material 3 1. a. Transferred out WIP, end Spoiled units EUP for DM
50000 8000 2000 60000
2.
WIP beg. Added Materials
50000 8000 3200 55200 12000 44000
Divided by: Multiply by: DM cost 3. Total Cost per EUP
Multiply by
56000 60000 8000 7440 1.44
52000
Cost of units transferred 74880
4. a. Completed units Ending inventory Normal Spoilage EUP for DM
152000 20000 14000 186000
b. Completed units Ending inventory Normal Spoilage EUP for CC
152000 10000 8400 174000
5. a. Completed units Multiply by b. Normal Spoilage Multiply by c. Conversion cost Multiply by
152000 6.9 1048800 4800 4.92 23616 2880 1.98 5702.4
*Cost of goods manufactured a. 1 048 800 b. 23 616 c. 5 702.4 1078 118.4 6. Completed units (20000*4.92) End. Inventory (10000*1.98)
Cost of WIP
118200
7. Cost assigned to Ending Inventory: = 29 725 / Not given 8. Cost assigned to Units Transferred out: = 263 750 / Not given 9. Abnormal spoilage (5000*1) WIP, ending (3750*1.5) EUP for DM and CC 10625 10. Raw Materials Conversion cost Cost of production Divided by
840 315 1155 2100 .55 Multiply by 100 Cost of spoilage to FO 55
11. a. WIP beg Completed WIP end EUP for DM
16000 68000 4000 88000
b. WIP beg Completed Spoilage WIP end EUP for CC
16000 68000 4000 8000 96000
12. Cost of WIP, beg: Conversion Cost (16000*60%*5)= 48000 Transferred in
(16000* 9.75) =156000
Cost Added: Transferred in
(80000* 11.7) = 936000
Direct Materials
(88000*3.1) = 272800
Conversion Cost (82400*5.4) = 444960 Total Cost to be accounted for 1 653760
13. Cost assigned to units completed and transferred: 1 661 760
Transferred in units
355000
14. Cost of spoilage charged to Factory Overhead: Not given
16. Transferred in units Multiply by PD cost Transferred in costs
355000 12 4260000
15. Finished and Transferred out 307 500 Normal Spoilage 2 500 IP, ending 45 000
17. Transferred in cost Add: (351000*14.5) Total cost charged to WIP
4260000 5089500 9349500
(Test Material 4)- Fill in the blanks Solutions:
Cost per EUP
1. Cost to account 14 700 Divided by 24 000 Cost per unit 0.6125
9. Incurred DM Costs Incurred CC Costs Cost of units F & T
2. WP, end 6000 Multiply by: 0.6125 Bal. of WIP, end 3675
10. EUP for CC : 1 500
3. Transferred in (3200*8.39) WIP, beg. (20000*3.19) EUP (20000*1.20) Total cost 356280 4. Current cost Beginning Inv. Units S and C
8000 3000 5000
5. N/A 6. Work in process 7000 Direct Materials 16000 Conversion costs 25600 Cost of goodsT-O 48600 7. WIP beg. 15 000 Started and Completed 180000 WIP end 8000 EUP for CC 203000 8. CC units Divided by EUP
1806700 203000
8.9 21000 24320 45320
11. a. Units Completed WIP, ending EUP for DM
50000 10000 60000
b. Units Completed WIP, ending EUP for CC
50000 6000 56000
12. Units Completed Multiply by: Cost assigned to F&T
50 000 1.9 95000
13. Transferred units out: 9600 14. Cost incurred for DM: ( 40 000 / 24 000 = 1.67) Cost incurred for CC: ( 39375 / 22500 = 1.75) Cost per unit 3.42 15. Cost incurred for DM: ( 50 000 / 24 000 = 2.08) Cost incurred for CC: ( 42875 / 22500 = 1.91) Cost per unit 3.99
Completed WIP end EUP for DM
16. N/A 17. N/A 18. WIP beg WIP beg Completed WIP end EUP for DL
3200 9600 72000 4000 85600
WIP beg Completed WIP end EUP for DL
72000 5600 80800 11200 72000 3200 86400
( Test Material 5 )- Fill in the blanks Solutions: 1. WIP beg Abnormal loss Transferred in WIP ending EUP for CC
4000 1666.67 60000 6000 71666.67
2. WIP beg Abnormal loss Transferred in WIP ending EUP for CC
4000 3333.33 60000 6000 73333.33
3. WIP beg
4000
Abnormal loss 1000 Transferred in 60000 WIP ending 6000 EUP for CC 71000 4. A. Units Completed WIP, ending Abnormal Spoilage EUP for fruits B. Units Completed WIP, ending Abnormal Spoilage EUP for CC 5, 6, & 7. N/A
9000 1700 1000 11700 9000 0 1000 10000
