2nd ASSESSMENT-acctg105

SAINT MICHAEL’S’ COLLEGE
Accountancy Department
2ND ASSESSMENT
ACCOUNTING 105 (COVERAGE: COST ACCOUNTING CYCLE & JOB ORDER COSTING)
PART 1- COST ACCOUNTING CYCLE
PROBLEM:
LEON PRODUCTS COMPANY is a small newly organized company that manufactures
dining tables and chairs. The basic steps in the company’s manufacturing process are as follows:
1. Lumber is cut to size for tables tops, legs, seats, arms and backs.
2. The individual pieces of cut lumber are painted in various bright colors.
3. The pieces are assembled into tables and chairs.
The following transactions are completed for January 2020 and recorded as follows:
1. Materials ( lumber, paint, screws and solvents) are purchased on account at a cost of
P50,000
2. During the month, direct materials (lumber and paint) costing P40,000 and indirect
materials (screws, lubricants & solvents0 costing P1,900 are issued to the factory
3. Total payroll for the month amounted to P36,000, consisting of P20,000 earned by the
laborers working on the product: P7,000 for factory supervision; P9,000 for sales and
administrative employees.
4. Payroll was distributed to the appropriate accounts
5. Depreciation expense for the building is 6% per year. The office occupies 1/10th of the
total building and the factory operation is in the other 9/10th of the building.
6. Depreciation expense for machinery & equipment is 20% per year. All machinery and
equipment is used in the factory for production purposes.
7. The cost of heat, light and power for the month was P3,000 ( 9/10 of which was used by
factory , and the balance was used by the selling and administrative building .
8. Miscellaneous expenses for telephone, office supplies, travel, and rental of office
furniture and equipment totaled P1,500.
9. Factory overhead is charged to production at 85% of direct labor cost .
10. All goods started in process have been completed. 1000 tables were produced during
the month.
11. 800 tables are sold to jobbers at a 40% mark up .
Requirements:
1. Journalize the above transactions.
2. Prepare a statement of goods sold statement
PART 2- JOB ORDER COSTING
Problem
The Normal Consolidated Company has the following balances as of January 1, 2021
Materials 4,900
Work in process 4,600
Finished goods 6,000
Accrued factory payroll 200
Details of the three inventories are as follows:

Finished goods
Commodity X 2,000 units @ P3.00
Work in process (Job no. 101)

Materials:
A - 200 units @ P5 = P1,000
B – 175 units @ P4 = 700 P1,700
Direct labor:
290 hours @ P5 1,450
Factory Overhead applied

@ 100% of direct labor cost 1,450 P4,600
Materials:
Material A - 600 units @ P5 P3,000
Material B - 350 units @ P4 1,400
Indirect materials 500 P4,900
The transactions for the month of January 2021 are as follows:
1. Purchases for the month of january:

Material A 600 units @ P5.50
Material B 800 units @ P5
Indirect materials P700
2. Materials requisitioned and issued on a fifo basis amounted to P7,000 as follows:
Job 101
Material A 200 units @ P5 P1,000
Job 102
Material A 400 units @ P5 P2,000

200 units @ 5.50 1,100
Material B 225 units @ P4 900

_______ 4,000
Job 103
Material B 125 units @ P4 P 500

300 units @ P5 1,500 2,000
______
3. Material B returned to vendors, 70 units @ P5
4. Payroll during January amounted to P10,300, of which P2,000 is for Job 101; P4,000 for
job 102; P2,000 for Job 103 , and P2,300 is indirect labor cost.
5. Factory overhead is applied on the basis of P100% of direct labor cost
6. Jobs completed during the month:
Job 101 3,000 units for commodity X

Job 102 5,000 units for commodity Y
7. Sales during January on FIFO basis:
Commodity X 4,000 units @ P6 per unit

Commodity Y 4,000 units @ P4 per unit
8. Cash collection from customers, P35,000
9. Recorded the following liabilities:
Factory overhead P4,800

Selling Espenses 2,100
General expenses 1,500
10. Paid accounts P9,500; Payroll P8,500
Requirements:
1. Journal entries to record above transactions
2. Job order cost sheets
3. Stockcards for materials anf finished goods
4. Cost of goods sold statement for the month of January 2021
“luck favors those who are prepared”

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SAINT MICHAEL’S’ COLLEGE

PART 1- COST ACCOUNTING CYCLE

Details of the three inventories are as follows:

Work in process (Job no. 101)

Factory Overhead applied

The transactions for the month of January 2021 are as follows:

1. Purchases for the month of january:

Material A 400 units @ P5 P2,000

Material B 225 units @ P4 900

Material B 125 units @ P4 P 500

3. Material B returned to vendors, 70 units @ P5

5. Factory overhead is applied on the basis of P100% of direct labor cost

6. Jobs completed during the month:

Job 101 3,000 units for commodity X

7. Sales during January on FIFO basis:

Commodity X 4,000 units @ P6 per unit

8. Cash collection from customers, P35,000

9. Recorded the following liabilities:

Factory overhead P4,800

“luck favors those who are prepared”

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