Seatwork A331

Problem 1. A certain company incurred a total manufacturing cost of P130,000, distributed as follows: Direct Materials – P60,000, Direct Labor – P40,000, and factory overhead P30,000. At the end of the period it was determined that the work in process increased by P20,000, while the finished goods decreased by P8,000. How much would be the cost of goods sold for the period? Problem 2. The cost of goods manufactured of XXX Corporation for the month was P105,000, while the raw materials used was P50,000. At the end of the month work in process decreased by P20,000, while finished goods increased by P15,000. Labor cost was determined to be 50% of raw materials used. How much would be the cost of goods sold and the factory overhead for the month? Problem 3. The following information is provided by Maunlad Mfg. Corp.: COGM P Labor Cost FOH FG Beginning FG Ending COGS Raw Materials Used WIP end How much would be the costs of raw materials used?

470,000 100,000 50,000 30,000 20,000 480,000 500% of WIP end 75% of WIP beginning

Problem 4. If the total manufacturing costs for the month is P142,000, while the finished goods beginning and ending were P20,000 and P12,000 respectively. How much would be the costs of Work in Process Beginning and Ending respectively, assuming cost of goods sold is P158,000 and that the work in process ending is 80% of the work in process beginning? Problem 5. The following information was taken from the accounting books of Cody Co’s. Decrease in Raw Materials Inventory P 15,000 Increase in Finished Goods Inventory 35,000 Raw Materials Purchased 430,000 Direct Labor Payroll 200,000 Factory Overhead 300,000 Freight out 45,000 Indirect materials used 2,500 Purchase Discount 1,250 Purchase Return 2,250 Sales Return at cost 5,000 Excess materials issued (return from factory) 1,000 How much was the cost of goods sold if there was no WIP at the beginning or at the end? Problem 6: Downstream Manufacturing Company realized too late that it had made a mistake locating its controller’s office and its electronic data processing system in the basement. Because of the Typhoon, the Pasig River overflowed on May 2 and flooded the company’s basement. Electronic data storage was beyond retrieval, and the company had not provided off-site storage of data. Some of the paper printouts were located but were badly faded and only partially legible. On May 3, when the river subsided, company accountants were able to assemble the following factory-related data from the debris and from discussions with various knowledgeable personnel. Data about the following accounts were found: • Raw Material (includes indirect material) Inventory: Balance April 1 was P4,800. • Work in Process Inventory: Balance April 1 was P7,700. • Finished Goods Inventory: Balance April 30 was P6,600. • Total company payroll cost for April was P29,200. • Accounts payable balance April 30 was P18,000. • Indirect material used in April cost P5,800. • Other nonmaterial and non-labor overhead items for April totalled P2,500. Payroll records, kept at an across-town service center that processes the company’s payroll, showed that April’s direct labor amounted to P18,200 and represented 4,400 labor hours. Indirect factory labor amounted to P5,400 in April. The president’s office had a file copy of the production budget for the current year. It revealed that the predetermined manufacturing overhead application rate is based on planned annual direct labor hours of 50,400 and expected factory overhead of P151,200. Discussion with the factory superintendent indicated that only two jobs remained unfinished on April 30. Fortunately, the superintendent also had copies of the job cost sheets that showed a combined total of P2,400 of direct material and P4,500 of direct labor. The direct labor hours on these jobs totalled 1,072. Both of these jobs had been started during the current period. A badly faded copy of April’s Cost of Goods Manufactured and Sold schedule showed cost of goods manufactured was P48,000, and the April 1 Finished Goods Inventory was P8,400. The treasurer’s office files copies of paid invoices chronologically. All invoices are for raw material purchased on account. Examination of these files revealed that unpaid invoices on April 1 amounted to P6,100; P28,000 of purchases had been made during April; and P18,000 of unpaid invoices existed on April 30. 1. 2. 3. 4.

5.

Calculate the cost of direct material used in April. Calculate the cost of raw material issued in April. Calculate the April 30 balance of Raw Material Inventory. Determine the amount of under applied or over applied overhead for April. What is the Cost of Goods Sold for April?