Solution Manual Cost Accounting PDF

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1

CHAPTER 1

Multiple Choice Questions- Theoretical 1. 2. 3. 4. 5.

c c c b d

6. b 7. c 8. b 9. c 10. a

11. d 12. a 13. d 14. d 15. b

16. a 17. b 18. d 19. d 20. a

21. 22. 23. 24. 25.

c c a d c

26. 27. 28. 29. 30.

c c c d d

Multiple Choice Questions - Computational 1.

(b) Direct Materials Direct Labor Factory Overhead: Depreciation – Factory equipment Factory rent Factory insurance Materials handling Manufacturing cost

2.

P1,000 2,000 500 1,500

5,000 P80,000

(a) Decrease in finished goods inventory Add: Raw materials purchased Direct labor payroll Factory overhead Total Less: Increase in raw materials inventory Cost of goods sold

3.

P47,000 28,000

P35,000 P430,000 200,000 300,000

930,000 P965,000 15,000 P950,000

(d) Direct labor- Wages of machine operations Direct materials: Metal wire Plastic coating

P200,000 P500,000 380,000

P880,000

1

2

4.

5.

6.

(c) Materials inventory, beginning Purchases Materials available for use Materials inventory, ending Materials used Direct labor Factory overhead Manufacturing cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured

P 32,400 40,000 72,400 34,000 38,400 33,000 17,160 88,560 7,200 95,760 16,240 P 79,520

(d) Materials inventory, Jan. 1 Purchases Freight in Materials available for use Materials inventory, Dec. 31 Materials used Direct labor Factory overhead Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold

P 17,000 240,000 3,000 260,000 19,000 241,000 320,000 188,000 749,000 12,000 761,000 13,000 748,000 62,000 810,000 46,000 P764,000

(b) Solve upward from Cost of Goods Sold. Materials inventory, Jan. 1 Purchases (squeeze) Materials available for use Materials inventory, Dec. 31 Materials used Direct labor Factory overhead Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold (given)

P 16,000 72,000 88,000 17,000 71,000 30,000 20,000 121,000 16,000 137,000 30,000 107,000 14,000 121,000 20,400 P100,600

(1)

(2)

2

3

7.

8.

9.

(c) Direct materials used Direct labor Factory overhead: Factory supplies Indirect labor Machine maintenance and repair Factory rent, light and power Depreciation Payroll taxes Factory cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured Finished goods inventory, Jan. 1 Goods available for sale Finished goods inventory, Dec. 31 Cost of goods sold (b) Raw materials inventory, beginning Purchases Materials available for use Raw materials inventory, ending Raw materials used Direct labor Factory overhead: Indirect labor Taxes, utilities and depreciation Factory cost Work in process inventory, beginning Total Work in process inventory, end Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, end Cost of goods sold (b) Direct materials used Direct labor Factory overhead Factory cost Work in process inventory, beginning Total Work in process inventory, end Cost of goods manufactured Finished goods inventory, beginning (squeeze) Goods available for sale Finished goods inventory, end Cost of goods sold

P100,000 250,000 P 6,000 50,000 10,000 24,000 10,000 30,000

130,000 480,000 30,000 510,000 40,000 470,000 50,000 520,000 60,000 P460,000

(1)

(2)

P 44,000 600,000 644,000 60,000 584,000 240,000 P120,000 100,000

220,000 1,044,000 80,000 1,124,000 96,000 1,028,000 50,000 1,078,000 36,000 P1,042,000 P 500,000 600,000 700,000 1,800,000 200,000 2,000,000 250,000 1,750,000 610,000 2,360,000 760,000 P1,600,000

3

4

10.

11.

(d) Direct materials, Dec. 31, 19x7 Purchases Available for use Direct materials, Dec. 31, 19x8 (squeeze) Direct materials used (P301,000- P180,000) Direct labor Factory overhead [(P180,000 / 60%) x 40% ] Factory cost Work in process, Dec 31, 19x7 Total Work in process, Dec. 31, 19x8 (squeeze) Cost of goods manufactured Finished goods, Dec. 31, 19x7 Goods available for sale Finished goods, Dec. 31, 19x8 (squeeze) Cost of goods sold (P500,000 x 80%)

P 16,000 170,000 186,000 65,000 121,000 180,000 120,000 421,000 34,000 455,000 25,000 430,000 30,000 460,000 60,000 P400,000

(1)

(2)

(3)

(a) Solve upward from Cost of Goods Sold Raw materials inventory, 19x7 Purchases (squeeze) Materials available for use Raw materials inventory, 19x8 Raw materials used Direct labor Factory overhead (squeeze) Manufacturing cost Work in process inventory, 19x7 Total Work in process inventory, 19x8 Cost of goods manufactured (Squeeze) Finished goods inventory , 19x7 Goods available for sale Finished goods inventory , 19x8 Cost of goods sold (given) Accrued factory payroll, 19x7 Direct labor Indirect labor Accrued factory payroll, 19x8 Payment of payroll

P 60,000 630,000 690,000 90,000 600,000 410,000 821,000 1,831,000 34,000 1,865,000 35,000 1,830,000 46,000 1,876,000 36,000 P1,840,000 P 6,200 410,000 140,000 ( 70,000 ) P549,000

(1)

(2)

(3)

4

5

12.

13.

(b) Solve upward from Cost of Goods Sold. Raw materials inventory, Jan. 1 Gross purchases (squeeze) Freight in Raw materials available for use Raw materials inventory, Dec. 31 Raw materials used Direct labor Factory overhead: Indirect labor P12,160 Factory overhead expenses 31,730 Indirect materials 21,370 Manufacturing cost Work in process inventory, Jan. 1 Total Work in process inventory, Dec. 31 Cost of goods manufactured (16,000 units) Finished goods inventory, Jan. 1 (500 units x P12*) Goods available for sale Finished goods inventory, Dec. 31 (1,500 units x P12) Cost of goods sold (15,000 units x P12)

P 11,600 88,610 5,570 105,800 9,640 96,160 32,640

(1)

65,280 194,080 5,740 199,820 7,820 192,000 6,000 198,000 18,000 P180,000

* P192,000 / 16,000 units = P12 Sales Cost of goods sold Gross profit

P360,000 180,000 P180,000

(d) Materials inventory, beginning Purchases Materials available for use Materials inventory, ending Materials used Direct labor (P15,000 ÷ 2/3) Factory overhead Factory cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, ending Cost of goods sold Sales Cost of goods sold Gross profit Operating expenses ( P72,000 x 6%) Operating income Other expenses (P72,000 x 5%) Net income before income tax

P 8,000 36,000 44,000 8,500 35,500 22,500 15,000 73,000 8,000 81,000 15,000 66,000 7,000 73,000 10,200 P62,800 P 72,000 62,800 9,200 4,320 4,880 3,600 P 1,280

(2)

(1)

(2)

5

6

14.

(a) Cost of goods sold Finished goods inventory, Dec 31 Goods available for sale Sales Cost of goods sold Gross profit Operating expenses: Marketing expenses General and administrative expenses Operating income

15.

P111,000 17,500 P128,500

(1)

P182,000 111,000 71,000 P14,000 22,900

36,900 P 34,100

(2)

Factory overhead: Indirect labor Factory heat, light and power Factory rent Factory insurance Production supervisor’s salary Indirect materials used (P5,600+P16,500- P5,180) Overtime pay [250 hours x (P22 x .5)] Total

P 22,000 11,220 18,500 2,000 5,000 16,920 2,750 P78,390

(1)

Direct materials inventory, March 1 Purchases Available for use Direct materials inventory, March 31 Direct materials used Direct labor (4,250 hours x P22) Factory overhead (1) Factory cost Work in process inventory, March 1 Total Work in process inventory, March 31 Cost of goods manufactured Finished goods inventory, March 1 Goods available for sale Finished goods inventory, March 31 (Squeeze) Cost of goods sold (given)

P 10,250 105,000 115,250 12,700 102,550 93,500 78,390 274,440 60,420 334,860 52,800 282,060 45,602 327,662 47,662 P280,000

(d)

(2)

6

7

16.

(d) Materials, inventory, beginning Purchases (Squeeze) Available for use Materials inventory, ending Raw materials used Direct labor [(P686,000-P326,000) ÷ 160 %] Factory overhead (P225,000 x 60%) Manufacturing cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured

17.

P 75,000 336,000 411,000 85,000 326,000 225,000 135,000 686,000 80,000 766,000 30,000 P 736,000

(2)

(3)

(c) Materials inventory, July 1 Purchases Freight in Available for use Materials inventory, July 31 Direct materials used Direct labor Factory overhead [P468,400+ (P116,000 x 90%)] Manufacturing cost Work in process inventory, July 1 Total Work in process inventory, July 31 Cost of goods manufactured Finished goods inventory, July 1 Goods available for sale Finished goods inventory, July 31 Cost of goods sold

18.

(1)

P 88,000 366,000 6,000 460,000 64,000 396,000 523,000 572,800 1,489,800 19,800 1,521,600 38,800 1,482,800 44,200 1,527,000 66,000 P1,461,000

(1)

(2)

(b) Direct materials: Materials inventory, Dec 1 Purchases Materials inventory, Dec 31 Direct labor Prime cost Direct labor Factory overhead [(P40,000 ÷ P6.40) x P8} Conversion cost

P24,000 56,000 ( 20,000 )

P 60,000 40,000 P100,000

(1)

P 40,000 50,000 P 90,000

(2)

7

8

19.

20.

(d) 1. Direct materials inventory, end (P100,000 – P70,000)

P30,000

2. Work in process control, end (P320,000 – P305,000)

P15,000

3.

P25,000

Finished goods control, end, (P325,000 – P300,000)

(a) Direct materials, Dec. 31, 2008 (Squeeze) Purchases Available for use Direct materials, Dec 19x9 Direct materials used (given) Direct labor (P72,000 ÷ 200%) Applied factory overhead Manufacturing cost Work in process inventory, Dec. 31, 2008 (Squeeze) Total Work in process inventory, Dec. 31, 19x9 Cost of goods manufactured Finished goods inventory, Dec. 31, 19x8 Goods available for sale Finished goods inventory, Dec. 31, 19x9 Cost of goods sold (given)

21.

P 30,000 90,000 120,000 20,000 100,000 36,000 72,000 208,000 3,000 211,000 35,000 176,000 50,000 226,000 46,000 P180,000

(1)

(2)

(a) Materials inventory, Jan. 1 P 34,200 Purchases (P364,000 + P8,600 – P5,200) 367,400 Available for use 401,600 Materials inventory, Dec. 31 49,300 Direct materials used 352,300 Direct labor 162,500 Factory overhead (P21,350 + P83,400 + P47,900) 152,650 Manufacturing cost 667,450 Work in process inventory, Jan 1 81,500 Total 748,950 Work in process inventory, Dec. 31 42,350 Cost of goods manufactured (4,000 units) 706,600 Finished goods inventory, Jan 1 (300 units) 48,600 Goods available for sale (4,300 units) 755,200 Finished goods inventory, Dec. 31 [420 units x (P706,600 ÷ 4,000 units)] 74,193 Cost of goods sold P281,007 (1) P74,193/420 units = P176.65 (2) Sales (3,880 units x P220) Cost of gods sold Gross profit

P853,600 281,007 P172,593

8

9

22.

(c) Materials used Direct labor Applied factory overhead (P290,000 x 39%) Factory cost Work in process inventory, April 1, 19x7 Total Work in process inventory, April 1, 19x8 Cost of goods manufactured

23.

P 440,000 290,000 87,000 817,000 41,200 858,200 42,500 P 815,700

Unit cost (P815,700 ÷ 18,000 nits)

P 45. 32

Applied factory overhead Actual factory overhead Indirect labor Light and power Depreciation Repairs Miscellaneous Under-applied factory overhead

P 87,000 P46,000 4,260 4,700 5,800 29,000

(1)

89,760 P (2,760)

(2)

P182,000 180,000 P 2,000

(1)

(b) Applied factory overhead (P70,000 + P112,000) Actual factory overhead Over-applied factory overhead Sales: Product X (9,000 x P30) Product Y (8,800 x P50) Cost of goods sold (Sch. 1) Gross profit Operating expenses Operating income

P270,000 440,000

P710,000 512,600 197,400 100,900 P 96,500

(2)

Sch. 1: Manufacturing cost (P210,000 + P296,000) Beginning inventories (P21,000 + P33,300) Total Ending inventories (P42,000 + P3,700) Cost of goods sold at normal Over-applied factory overhead Cost of goods sold at actual

P506,000 54,300 560,300 45,700 514,600 ( 2,000 ) P512,600

9

10

24.

25.

(d) Direct labor (8,000 hrs. x P5.60) + (4,600 hrs. x P6.00) Factory overhead (8,000 hrs. x P6.00) + (4,600 hrs x P8.00) Conversion cost

P 72,400 84,800 P157,200

(1)

Materials inventory, beginning Purchases Available for sale Materials inventory, ending Direct materials used Conversion cost Factory cost Work in process inventory, beginning Total Work in process inventory, ending Cost of goods manufactured Finished goods inventory, beginning Goods available for sale Finished goods inventory, ending Cost of goods sold

P 20,000 60,000 80,000 18,000 62,000 157,200 219,200 15,000 234,200 17,600 216,600 22,000 238,600 17,000 P221,600

(2)

(c) Materials inventory, April 1, 19x8 Purchases Available for use Materials inventory, June 30, 19x8 Direct materials used Direct labor Factory overhead Factory cost Finished goods inventory, April 1, 19x8 Goods available for sale Finished goods inventory, June 30, 19x8 (200 x P395) Cost of goods sold Unit cost of equipment manufactured (P4,937, 500 ÷ 12,500 units)

P 268,000 1,946,700 2,214,200 167,000 2,047,700 2,125,800 764,000 4,937,500 43,000 4,980,500 79,000 P4,901,500 P395.00

Sales Cost of goods sold Gross profit

P 6,634,000 4,901,500 P 1,832,500

Per unit (P755,500 ÷ 12,400)

P139. 72

Gross profit Operating expenses Net income

P 1,732,500 977,000 P 755,500

Per unit (P755, 500 ÷ 12,400)

P 60.93

(1)

(2)

(3)

10

11

26

27.

28.

(d) Predetermined overhead rate (P96,000/P120,000)

80%

Applied factory overhead (P8,000 x 80%) Actual factory overhead Underapplied factory overhead

P6,400 7,200 P 800

(2)

(d) (1)

Indirect labor Rent – factory building Indirect materials used Other factory overhead costs Total

P 6,000 60,000 8,000 40,000 P114,000

(2)

Applied factory overhead costs (16,000 DL hours x P7)

P112,000

(3)

Direct Materials used Direct labor Applied factory overhead Cost of goods sold

P250,000 300,000 114,000 P664,000

(d) Cost of goods placed in process Finished goods Work in process – end (Job 30)

29.

(1)

P360,000 320,000 P 40,000

(d) (1)

Total manufacturing costs Direct labor (P225,000/72%) Applied factory overhead (P900,000 x 25%) Direct materials used

(2)

Mfg. cost + WIP,beg = WIP, end + COGM P900,000 + .80X = X + P850,000 .20X = P50,000 X = P250,000 WIP, end

P900,000 (312,500) (225,000) P362,500

11

12

30.

(c) Predetermined overhead rate (120,000/P160,000) Work in process, May 31 (P580,000 – P501,800) Less: Conversion cost Direct labor : Job 123 P12,000 Job 456 12,800 Applied factory overhead: Job 123 (P12,000 x 75%) P 9,000 Job 456 9,600 Direct materials

31.

75% P78,200

P24,800

18,600

43,400 P34,800

(a) Direct materials Direct labor Applied factory overhead Total

Dept. ADept. B Total P25,000 P 5,000P 30,000 20,000* 30,000 50,000 40,000 15,000** 55,000 P85,000 P50,000 P135,000

 P40,000/200% ** P30,000 x 50% 32.

(b) Balance of Work in Process account, 4/30/08 Direct labor Applied factory overhead (P2,000 x 80%) Direct materials

33.

P 8,800 (2,000) (1,600) P 5,200

(b) Pre-determined overhead rate (P11,800 / P14,750)

80%

Let X = Direct labor Therefore 80X = Applied factory overhead Finished goods Less: Direct materials used (P15,500 – P3,200) Prime cost

P37,500 12,300 P25,200

X + .80X = P25,200 180X = P25,200 X = P14,000 Direct labor .80X = P11,200 Applied factory overhead.

12

13

34.

(c)

(1)

(2)

(3) 35.

Manufacturing cost WIP, Dec. 1: Direct materials (3,000 x P2.40) Direct labor (3,000 x P.80) Applied FO (48 hrs x P100) Total WIP, Dec. 31: DM (2,000 x P2.40) DL (2,000 x P.80) Applied FO (32 hrs. x P100) Cost of goods manufactured Finished goods, Dec. 1 Goods available for sale Finished goods, Dec. 31: DM DL Applied FO (P100 x 60 hrs) Cost of goods sold

P180,000 P30,000 60,000

90,000 P 90,000 P180,000

P7,200 2,400 4,800 P4,800 1,600 3,200

P5,000 3,000 6,000

14,400 194,400

9,600 P184,800 12,000 196,800

14,000 P182,800

(d) (1)

(2) 36.

Manufacturing cost Less: Direct labor Applied factory overhead (P100 x 600 hours) Direct materials used

Direct materials used Direct labor Applied FO: Molding Dept. (P2.70 x 2,000 hours) Decorating Dept. (35% x P12,000) Estimated cost to produce

P26,000 30,000 P5,400 4,200

9,600 P65,600

Bid Price (P65,600 x 145% ) P95,120

(b) WIP, beg. Current cost: DM DL AFO Total cost

Job 115 P81,200

Job 116

Job 117

26,000 31,200 P138,400

P39,000 45,000 54,000 P138,000

P53,000 47,000 56,400 P156,400

(1)

Cost of goods manufactured:

(2)

WIP, Aug. 31 (Job 118)

Job 115 Job 116 Job 117 Total

Job 118

P47,000 16,000 19,200 P82,200

Total

P139,000 134,000 160,800 P515,000

P128,400 138,000 156,400 P432,800 P 82,200

13

14

37.

38.

(c) (1)

P1,280,000 / P1,600,000 = 80%

(2)

WIP, end Direct Labor Applied FO (.80 x P100,000) Direct materials

P280,000 (100,000) ( 80,000) P100,000

(1)

Accounts payable, March 31 Payment of accounts payable (for materials) Accounts payable, March 1 Materials purchased

P 20,000 70,000 (12,000) P 78,000

(2)

This can be computed by working backward from cost of goods sold as follows:

(a)

Costs of goods sold P 600,000 Finished goo...