Chapter 4 True or False

1. False
6. True
2. True
7. False
3. True
8. False
4. False
9. True
5. True
10.False

11. False
12. False
13. False
14. False
15. False

16.True
17. False
18. False
19. True
20. False

Multiple choice Theory

1, d
6. d
2. b
7. a
3. b
8. c
4. d
9. c
5. d
10. b

11.
12.
13.
14.
15.

16.
17.
18
19.
20.

d
d
c
b
c

a
c
b
b
b

21.
22.
23.
24.
25.

c
b
d
b
b

Problem 1 Alexis Company

1 Journal entries
1.
Materials
Accounts payable
2.

3.

4.

5.

6.

Work in process
Factory overhead control
Materials
Materials
Work in process
FO Control
Accounts payable
Materials

28,000
28,000
22,000
3.000
25,000
800
500
300
1,000
1,000

Payroll
39,000
Withholding taxes payable
3,025
SSS Premiums payable
1,600
Phil Health contributions payable
375
Pag-ibig funds contributions payable
1,200
Accrued payroll
32,800
Accrued payroll
Cash

32,800

Work in process
Factory overhead control
Payroll

33,400
5,600

32,800

39,000

7.

Factory Overhead Control

SSS Premiums payable
Phil Health cont. payable
Pag-ibig cont. payable

3,575

FO Control
Accum Depr.
Prepaid ins.
Accounts payable

15,000

9.

Work in process
FO Applied

26,720
26,720

10.

Finished goods
WP
Job 401
Job 402

72,220
72,220

11.

12.

2,000
375
1,200

3,000
950
11,050

31,720
40,500

Accounts receivable
Sales (31,720 x 140%)

44,408
44,408

Cost of goods sold

FG

31,720
31,720

Cash

35,000
35,000

Accounts receivable

Direct materials
3,000
5,500
8,500

Direct materials
5,600
7,000
12,600
Page 3
Direct materials
9,500
( 500)

Job 401
Direct labor
2,500
10,400
12,900

Factory overhead
2,000
8,320
10,320

Job 402
Direct labor
3,000
12,500
15,500

Factory overhead
2,400
10,000
12,400

Job 403
Direct labor
10,500

Factory overhead
8,400

3.

Cost of goods sold statement

Direct materials used
Materials, August 1
Purchases
Less. Purchase returns
Total available for use
Less: Materials, Aug. 31
Ind. Materials
Direct labor
Factory overhead
Total manufacturing costs
Work in process, Aug. 1
Cost of goods put into process
Less: Work in process, Aug. 31
Cost of goods manufactured
Finished goods, Aug. 1
Total goods available for sale
Less: Finished goods, Aug. 31
Cost of goods sold - normal
Add. Under applied factory overhead
Cost of goods sold

22,000
28,000
1,000
24,800
2,700

Problem 2 - Golden Shower Company

2. Journal entries
a. Materials
Accounts payable`````
X 20,000 x 5.20
= 104,000
Y 24,000 x 3.75
= 90,000
Ind. Materials
35,040
b. Payroll
Withholding taxes payable
SSS premiums payable
Phil Health cont. payable
Pag-ibig funds cont. payable
Accrued payroll
Accrued payroll
Cash
c. Work in process
Factory overhead control
Marketing & Adm. Exp. Control
Payroll

27,000
49,000
27,500

229,040
229,040

220,000
31,000
7,000
440
6,600
174,960
174,960
174,960
156,000
24,000
40,000
220,000

21,500
33,400
26.720
81,620
18,500
100.120
27,900
72,220
25,000
97,220
65,500
31,720
155
31,875

Factory overhead control

Marketing & adm. Exp. Control
SSS Premiums payable
Phil Health contr. Payable
Pag-ibig funds contribution payable
SSS
(5%)
FOC (180,000)
9,000
M & A Exp.control 2,000
11,000

Phil Health
(0,.25%)
360
80
440

14,760
3,280
11,000
440
6,600
Pag-ibig
( 3% )
5,400
1,200
6,600

d. Work in process
Factory overhead control
Materials
Job 101
(x) 4,000 x 5.00
(x) 16,000 x 5.20

Job 103
( x) 2,000 x 5.20
(Y) 5,000 x 3.75

20,000
83,200
103,200

Total
14,760
3,280
18.040

216,350
15,040
231,390
Job 102
(Y) 8,000 x 3.00
(Y) 16,000 x 3.75

24,000
60,000
84,000

10,400
18,750
29,150

e. Work in process
FO Applied
Job 101 = 10,000 x 2.25
102 = 16,000 x 2.25
103 = 12,000 x 2.25

85,500
85,500
22,500
36,000
27,000

f. Accounts receivable
Sales

510,000
510,000

Cost of goods sold

Work in process

380,700
380,700

g. Cash
Sales discount
Accounts receivable

494,000
26,000
520,000

h. Marketing & Adm. Exp. Control

Factory overhead control
Cash
Accum. Depreciation

30,000
25,600
51,600
4,000

i.

Accounts payable
Cash

170,000
170,000

j. Factory overhead applied

Cost of goods sold
FO Control

85,500
6,100
79,400

DIRECT MATERIALS
5,000
103,200
108,200

JOB 101
DIRECT LABOR
4,000
44,000
44,000

FACTORY OVERHEAD
2,000
22,500
24,500

DIRECT MATERIALS
1,200
84,000
85,200

JOB 102
DIRECT LABOR
2,000
80,000
82,000

FACTORY OVERHEAD
800
36,000
36,800

DIRECT MATERIALS
21,.950

JOB 103
DIRECT LABOR
36,000

FACTORY OVERHEAD
27,000

STOCKCARDS
MATERIAL X
ISSUED

RECEIVED
20,000 @ 5.20

104,000
4,000 @ 5.00
18,000 @ 5.20

20,000
93,000

MATERIAL Y
ISSUED

RECEIVED
24,000 @ 3.75

BALANCE
4,000 @ 5.00
20,000
4,000 @ 5.00
20,000
20,000 @ 5/20
104,000
10,400

BALANCE
8,000 @ 3.00
24,000
8,000 @ 3.00
24,000
24,000 @ 3.75
90,000

90,000
8,000 @ 3.00
21,000 @ 3.75

2,000 @ 5.20

24,000
78,750

3,000 @ 3.75

11,250

Problem 3 - J.A.N., Inc.

1.Direct materials
Direct labor (300 x 8)
Factory OH (200 x 15)
Total mfg. cost

4,300
2,400
3,000
9,700

2. Direct material
Direct labor
Prime cost

4,300
2,400
6,700

3. Direct material
Factory overhead applied
Conversion cost

2,400
3,000
5,400

Problem 4 - Marvin Inc.

1. Materials Department 1
Department 2
Total direct material cost of Job 109

2,400
1,300
3,700

2. Direct labor Department 1 ( 500 hrs. x 8.20)

Department 2 ( 220 hrs. x 8.00)
Total direct labor cost of Job 109

4,100
1,760
5,860

3. FO Applied Department 1 (500 hrs. x 4.00)

Department 2 ( 320 hrs. x 1.00)
Total factory overhead applied to Job 109

2,000
320
2,320

4. Selling Price
Less: Total cost ( 3,700 + 5,860 + 2,320)
Gross profit Job 109

25,000
11,880
13,120

5. Selling Price
Cost of Job 109
Selling and administrative exp. ( 25% x 11,880)
Net income
Problem 5 - Star Wars Corporation
Requirement No. 1
1.
Work in process
Materials

25,000
( 11,880)
( 2,970)
10,150

50,000
50,000

2.

Work in process
Payroll

150,000
150,000

3.

Work in process
FO Applied

90.000

4.

Finished goods
Work in process

290,000
290,000

5.

Accounts receivable
Sales

427,917
427,917

Cost of goods sold

Finished goods

290,000
290,000

Selling price
Direct materials
Direct labor
Factory OH
Total cost
Gross profit

90,000

Job 110
126,667
15,000
50,000
30,000
95,000
31,667

Job 220
170,000
10,000
50,000
30,000
90,000
80,000

Job 330
131,250
25,000
50,000
30,000
105,000
26,250

Total
427,917
50,000
150,000
90,000
290,000
137,917

Problem 6 Ellery Corporation

MATERIALS__________
WORK IN PROCESS_______
Beg.
60,000 5)
125,000
Bal. beg. 85,000
2)
820,000
6)
145,000 Bal. end 80,000
5) DM 125,000
205,000
205,000
4) DL
400,000
3) OH
320,000
Bal.end 110,000
930,000
930,000
FINISHED GOODS______
Bal. beg. 120,000 1)
850,000
2)
820,000 Bal. end 90,000
940,000
940,000

7)

FACTORY OH CONROL____
330,000

Entries
1.
Materials
Accounts payable

1)

COST OF GOODS SOLD_____

850,000

FACTORY OH APPLIED _____

3)
320,000

145000
145,000

2.

Work in process
Materials

125,000
125,000

3.

Work in process
Payroll

400,000
400,000

4.

Work in process
FO Applied

320,000
320,000

5.

Finished goods
Work in process

820,000
820,000

6.

Cost of goods sold

Finished goods

850,000
850,000

7.

FO Control
Various accounts

330,000
330,000

Problem 7 - Ellen Joyce Company

1.
Work in process
Materials

98,500
98,500

2.

Work in process
Payroll

156,000
156,000

3.

Work in process
FO Applied

118,500
118,500

4.

Finished goods
Work in process
Job 201
Job 202
Job 203
Total
Accounts receivable
Sales

343,000
343,000

5.

Cost of goods sold

Finished goods
Cost of goods sold statement
Direct materials
Direct labor
Factory overhead
Total manufacturing costs
Less: Work in process, end

190,000
94,000
59,000
343,000
350,000
350.000
284,000
284,000

98,500
156,000
118,500
373,000
30,000

Cost of goods manufactured

Less: Finished goods, end
Cost of goods sold
Page 8 = Abner Corporation
1.
Direct materials used
Materials end
Materials beg.
Direct materials purchased

343,000
59,000
284,000

205,000
90,000
( 95,000)
200,000

2.

Total manufacturing costs

Factory overhead
Materials used
Direct labor costs

675,000
( 175,000)
( 205,000)
295,000

3.

Cost of goods available for sale

Finished goods, end
Cost of goods sold

775,000
(110,000)
665,000

4.

Sales
Cost of goods sold
Gross profit

900,000
(665,000)
235,000

Problem 9 - Pacific Production Company

1.
Materials - April 1
Purchases
Materials April 30
Direct materials used
Indirect materials used

64,000
84,000
( 60,000)
( 78,000)
10,000

2.

Accrued payroll April 30

Payroll paid
Direct labor cost
Indirect labor

6,000
44,000
( 32,000)
18,000

3.

Direct labor cost

Factory overhead rate
Factory overhead applied

32,000
125%40,000

4.

Direct materials
Direct labor
Factory overhead
Total manufacturing costs
Work in process, beg.
Work in process, end
Cost of goods manufactured

78,000
32,000
40,000
150,000
82,000
( 94,000)
138,000

5.

Cost of goods manufactured

Finished goods, April 1
Finished goods, April 30
Cost of goods sold

138,000
296,000
(304,000)
130,000

Problem 10 Table and Chair Manufacturing Company

1)
Materials
Accounts payable
2)

3)

4)

15,000
15,000

Work in process
FOC
Materials

11,480
40

Payroll
Accrued payroll

5,445

Work in process
FOC
Payroll

4,645
800

FOC

2,875

11,520

5,445

5,445

Rent Expense Payable

Accum. Depreciation Machines
Accum. Depreciation Factory Building
Utilities Expense Payable
Payroll Taxes Payable
5)

Work in process
FO Applied

6)

Finished goods
Work in process
Direct materials
Direct labor
Factory overhead
Total

7)

Cash

1,500
160
490
225
300
5,261.25
5,261.25

Job 101
10,500
3,175
3,618.75
17,293.75

21,386.25
21,385.25
Job 102
Total
980
11,480
1,470
4,645
1,642.50
5,261.25
4,092.50
21,386.25
25,000

Sales
Cost of Goods Sold
Finished goods

25,000
17,293.75
17,293.75

Cash

4,000
Sales

4,000

Cost of goods sold

Finished goods

4,092.50
4,092.50

Problem 11 Candy Corporation

1)

Job 101
Job 102
WP, July 1

2)

Job 101
Job 102
Job 103
Total

3)

P 175,000
120,000
P 295,000
80,000 x 125%
95,000 x 125%
115,000 x 125%

= P 100,000
=
118,750
=
143,750
362,500

Job 101
175,000

Job 102
120,000

Total
295,000

55,000
80,000
100,000
410,000`

80,000
95,000
118,750
413,750

135,000
175,000
218,750
823,750

Job 101
Add: Underapplied factory overhead
Actual FO
375,000
Less: Applied FO
362,500
Cost of goods sold actual

410,000

5)

FG, Inventory July 31 (Job 102)

413,750

6)

WP, Inventory, July 31 ( Job 103)

Materials
Labor
Factory overhead
Total WP Inventory, July 31

92,000
115,000
143,750
350,750

WP, beg.
Cost added
Materials
Labor
Overhead
Total
4)

Problem 12 MLT Company

1)
Materials, June 1
Purchases
Materials, June 30
Indirect materials
Direct materials used

12,500
422,500`

15,000
33,000
( 19,000)
( 1,000)
28,000

2)

Cost of goods manufactured

Work in process, June 30
Work in process, June 1
Total manufacturing cost

120,000
30,000
( 40,000)
110,000

3)

Cost of goods available for sale

Total manufacturing costs
Finished goods, June 1

190,000
(110,000)
80,000

Problem 13 Miracle Company (start with No.. 3 then No. 2)

1)
Cost of goods manufactured
168,000
WP, January 31
95,000
WP, January 1
( 80,000)
Total manufacturing cost
183,000
Direct labor
(63,000 / 75%)
( 84,000)
Factory overhead
( 63,000)
Direct materials used
36,000
Materials January 31
50,000
Indirect materials used
1,000
Purchases
( 46,000)
Materials, January 1
41,000
2)

Cost of goods sold normal

Finished goods, January 31
Finished goods, January 1
Cost of goods manufactured

150,000
78,000
( 60,000)
168,000

3)

Sales ( 25,000 / 12.5%)

Selling and administrative expenses
Net income
Cost of goods sold, actual
Overapplied FO
Actual
62,800
Less: Applied
63,000
Cost of goods sold, normal

200,000
( 25,000)
(25,200)
149,800

200
150,000

Problem 14 Nona Company

1)

Units sold
Finished goods, end
Finished goods, beg
Units completed/manufactured

12,300
300
( 100)
12,500

2)

Direct materials used

Direct labor
Factory overhead
Total mfg. cost/cost of goods manufactured
Divide by units completed
Cost of goods manufactured per unit

1,847,700
2,125,800
1,026,500
5,000,000
12,500
400/unit

3)

From Finished goods, beg. (100 units x P 430 )

From units completed during the period ( 12,200 x P 400)
Cost of goods sold

43,000
4,880,000
4,923,000

Or
Finished goods, beg.
Cost of goods manufactured
Finished goods, end ( 300 x P400)
Cost of goods sold

43,000
5,000,000
( 120,000)
4,923,000

Problem 15
1.
Total manufacturing costs (5,400 + 3,600 + 4,800 + 4,200)
Less: Cost of goods manufactured (5,400 +3,600 + 4,800)
Work in process, January 31
Or simply Job order No. 4
4,200
2.

Total mfg. costs (4,000 + 3,550 + 5,850+9,600+4,500)

Work in process, beg.
Cost of goods put into process
Less: Cost of goods manufactured (8,200 + 3,550)
Work in process, February 28
Or Job 6
Job 7
Job 8
Total Work in process, February 28

3.

27,500
4,200
31,700
11,750
19,950
5,850
9,600
4,500
19,950

Total mfg. costs (6,500+3,800+4,200+2,500+6,000)

Work in process, beg.
Cost of goods put into process
Less: Cost of goods manufactured (13,400+8,700)
Work in process, March 31
Or Job 6
Job 9
Job 10
Total Work in process, March 31

18,000
13,800
4,200

23,000
19,950
42,950
22,100
20,850
12,350
2,500
6,000
20,850

4.

Cost of goods manufactured January

Less: Cost of goods sold (5,400 + 4,800)
Finished goods, January 31
Or Job 2

5.

6.

3,600

Cost of goods manufactured - February

Finished goods, February1
Total goods available for sale
Less: Cost of goods sold ( 3,600 + 3,550)
Finished goods, February 28
Or Job 4
Cost of goods manufactured March
Finished goods, March 1
Total goods available for sale
Less: Cost of goods sold ( 13,400 + 8,700)
Finished goods, March 31
Or Job 4

7.

Job 1
Job 3
Cost of goods sold January

8.

Job 2
Job 5
Cost of goods sold February

9.

Job 7
Job 8
Cost of goods sold March

13,800
10,200
3,600

11,750
3,600
15,350
7,150
8,200
8,200
22,100
8,200
30,300
22,100
8,200
8,200
5,400
4,800
10,200

Problem 16
Materials_____
Work in process____
Beg. 10,000 2) 2,000 Beg. 1,000 6)
25,000
1) 30,000 3) 15,000 3) 15,000
4) 10,000
5)
5,000__End
6,000
31,000
31,000

Cost of Goods Sold___

FO Control_______
7) 18,000
8) 4,200

3,600
3,550
7,150
13,400
8,700
22,100

Finished Goods_____
Beg. 2,500 7)
18,000
6) 25,000 _End
9,500
27,500
27,500

FO Applied_______
5)
5,000

2)

1.

Accounts payable___ _
2,000 Beg.
25,000
1)
30,000

Materials, beg.
Purchases
Less: Purchase Returns
Total available for use
Less: Materials issued
Materials, end

10,000
30,000
2,000

28,000
38,000
15,000
23,000

2.

Direct labor hours

x Direct labor rate per hour
Direct labor charged to production

3.

P 2,000 (the amount debited to AP and credited to Direct materials)

4.

Direct materials used

Direct labor
Factory overhead applied
Total manufacturing cost
Work in process, beg.
Cost of goods put into process
Less: Cost of goods manufactured (credit to WP)
Work in process, end

15,000
10,000
5,000
30,000
1,000
31,000
25,000
6,000

5.

Finished goods, beg.

Cost of goods manufactured
Total goods available for sale
Less: Cost of goods sold
Finished goods, end

2,500
25,000
27,500
18,000
9,500

6.

P 18,000 (the amount debited to CofGS and credited to Finished Goods)

Problem 17 Watson Manufacturing Company

Requirement 1 Journal entries
a. Work in Process
Materials
b. Work in Process
Payroll

10,000
1.00
10,000

60,000
60,000
79,000
79,000

c. Work in Process
Factory Overhead Applied

63,200

d. Factory Overhead Control

Various credit accounts

60,000

63,200

60,000

e. Finished Goods
Work in process

134,000
134,000

Job 101 ( 20,000 + 30,000 + 24,000)

Job 103 ( 24,000 + 20,000 + 16,000)
Total costs

74,000
60,000
134,000

Requirement No. 2
a. FO Applied ( 20,000 x 80%)

16,000

b. Job 101 = 74,000/1,000 units = P 74.00/unit

Job 103 = 60,000/200 units

= P300.00/unit

c. Direct materials used

Direct labor
Factory overhead (79,000 x 80%)
Total manufacturing costs
Less: Cost of goods completed
Work in process, end

60,000
79,000
63,200
202,200
134,000
68,200

Or cost of Job 102 ( 16,000 + 29,000 + 23,200)

68,200

d. Actual factory overhead

Less: Applied factory overhead
Over-applied factory overhead
MULTIPLE CHOICE PROBLEMS
1. A
11. B
2. A
12, A
3. C
13. C
4. D
14. D
5. A
15. A
6. B
16. D
7. B
17. C
8. A
18. C
9. A
19. D
10. B
20. C

60,000
63,200
( 3,200)

21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

C
C
C
B
A
D
B
B
D
B