SEATWORK 1

Problem 1- Ram Corporation Problem 2

1. Direct materials 1. Fixed
2. Manufacturing overhead 2. Variable
3. Direct materials 3. Mixed
4. Direct labor 4. Fixed
5. Manufacturing overhead 5. Variable
6. Manufacturing overhead 6. Fixed
7. Direct materials 7. Fixed
8. Manufacturing overhead 8. Variable
9. Manufacturing overhead 9. Variable
10. Manufacturing overhead 10. Variable

Problem 3
1. Manufacturing
2. Selling
3. Manufacturing
4. Manufacturing
5. Administrative

Problem 4 – Bug Company

1. Variable Inventoriable (DM) 6. Variable Period (OE) 2. Variable
Inventoriable (FO) 7. Variable Inventoriable (DM) 3. Fixed Inventoriable (FO)
8. Variable Period (OE) 4. Variable Inventoriable (DM) 9. Fixed Period (OE) 5.
Variable Inventoriable (FO) 10. Variab;e Inventoriable (DL)

Problem 5
1. 102,000
2. 147,000
3. 197,000
4. 21,200
5. 26,500

Problem 6 – Mother Goose Company

1. Prime costs - 530,000 2. Conversion cost - 575,000 3 Inventoriable
cost - 860,000 4. Total period costs - 305,000

Problem 7
1. Direct materials P 60.00 Direct labor 30.00 Variable
manufacturing overhead 9.00 Total variable manufacturing
cost per unit P 99.00

` 2. Total variable manufacturing cost per unit P 99.00

Variable marketing and administrative 6.00
Total variable costs per unit 105.00

3. Total variable manufacturing cost per unit P 99,00

 Fixed manufacturing overhead (30,000/1,200) 25.00
Full manufacturing cost per unit 124.00

4. Full manufacturing cost per unit 124.00

Variable marketing and administrative 6.00
Fixed marketing and administrative 20.00
Full cost to make and sell per unit 150.00

Problem 8
1. P7 per machine hour
2. P18,000
3. P51,600

Problem 9 – Johnson Corporation

1. Variable cost per machine hour = 35,600 – 20,000
4,000 - 2,000
= 7.80 per machine hour
2. 4,000 hours 2000 hours Total electricity expense 35,600 20,000
Less: Variable costs
( 4,000 x 7.80) 31,200
( 2000 x 7.80) ______ 15,600
Fixed cost 4,400 4,400

3. Fixed cost 4,400

Variable cost ( 4,500 x 7.50) 35,100
Totl manufacturing costs 39,500

SEATWORK 2

Problem 5 – Darvin Company

1. Entries
a. Materials 200,000 Accounts payable 200,000

b. FOControl 35,000 Accounts payable 35,000

c. Payroll 210,000 W/Taxes payable 18,520 SSS Premium payable 8,400 Phil
Health contributions payable 1,125 PFC payable 6,300 Accrued payroll
175,655
Work in process 140,000 Factory Overhead control 30,000 Selling expense control
25,000 Adm. expense control 15,000 Payroll 210,000

d. Accrued payroll 175,655 Cash 175,655

e. FO Control 14,200 Selling expense control 2,375 Adm. Expense

control 1,350
SSS prem. Payable 10,500 MC payable 1,125 PFC payable 6,300

f. Work in process 185,000 FO Control 35,000 Materials 220,000

 g. Work in process 112,000 FO applied 112,000

h. Finished goods 410,000 Work in process 410,000

i. Accounts receivable 539,000 Sales 539,000

Costs of goods sold 385,000 Finished goods 385,000

j. Cash 405,000 Accounts receivable 405,000

k. Accounts payable 220,000 Cash 220,000

L. Cost of goods sold 2,200 FO applied 112,000 FO Control 114,200

2. Cost of goods sold statement

Direct materials used
Materials, January 1 50,000
Purchases 200,000
Total available 250,000
Less> Mat.- Jan. 31 30,000
Ind. Materials 35,000 65,000 185,000
Direct labor 140,000 Factory overhead 114,200 Total manufacturing
costs 439,200 Work in process, January 1 18,000 Cost of goods put
into process 457,200 Less: Work in process, January 31 47,200 Cost
of goods manufactured 410,000 Finished goods – January 1 35,000
Total goods available for sale 445,000 Less: Finished goods –
January 31 60,000 Cost of goods sold, normal 385,000
Under-applied factory overhead 2,200 Cost of goods sold, actual 387,200

3. Income Statement
Sales 539,000 Less: Cost of goods sold 387,200 Gross profit 151,800
Less: Operating expenses
Selling 27,375
Administrative 16,350 43,725
Net income 108,075

4 Balance sheet
Cash 110,000 Accounts payable 25,000 Accounts receivable 194,000 Accrued payroll
8,655 Finished goods 60,000 W/tax payable 18,520 Work in process 45,000 SSS
Prem. payable 18,900 Materials 30,000 Medicare Cont. payable 2,250 PFC payable
12,600
Common stock 200,000
_______ Retained earnings 153,075 Total 439,000 439,000

Problem 6
1. Cost of goods manufactured 800,000 Work in process, December 31 87,000
Cost of goods put into process 887,000 Total manufacturing costs
 ( 790,000)
Work in process, January 1 97,000

2. Cost of goods manufactured 800,000 Finished goods, January 1 80,000

Total goods available for sale 880,000 Cost of goods sold (750,000)
Finished goods, December 31 130,000

3. Direct materials used 590,000

Materials, December 31 150,000
Total available for sale 740,000
Materials, January 1 (100,000)
Materials purchased 640,000

Problem 7 - Madelyn Company

1. The entity must use job order costing as the furniture is unique and must be customized to
conform with the customer’s specifications.
2. The company applies factory overhead into production on the basis of direct labor cost, i.e.
P26m/P20m or P1.30 per DLC in this case.
3. Actual FO (P500,000 + P7,500,000 + PP2,000,000 + P11,000,000 +
P2,000,000) P 23,000,000 Applied FO (P18,000,000 x P1.30) 23,400,000 Over-
applied FO P( 400,000)

4. TMC (P30m + P18m + P23.4m) P71,400,000 WIP, beg. 5,000,000 WIP, end
(4,000,000) COGM P72,400,000 FG, beg 13,000,000 FG, end (11,000,000) COGS,
Normal P74,400,000 Less Overapplied FO (See Item 3) (400,000) COGS, Actual
P74,000,000-

Chapter 4 – Cost Accounting

Problem 1.
1. Variable cost ratio: P360,000 / P600,000 = 60%
2. Contribution margin ratio: (P600,000 – P360,000) / P600,000 = 40%
3. Break-even-point in units P192,000 / P24 = 8,000 units
4. Break-even point in sales P192,000 / 40% P480,000

Problem 2.
1. Break-even-point in units = P148,500 / P300 = 495 units
2. Break-even-point in pesos = 495 x P1,000 = P495,000
Or = P148,500 / 30% = P495,000
3. Contribution margin statement:
At Break even units of 495 Sales P495,000 Variable cost (495 x P700) (346,500)
Contribution margin P148,500 Fixed cost (148,500) Net income P 0
At 10,000 units Sales P10,000,000 Variable cost (10,000 x P700) (7,000,000)
Contribution margin P 3,000,000 Fixed cost ( 148,500)
 Net income P 2,851,500
Check on units sold for desired profit 2,851,500 (P148,500 + P2,851,500) / P300
10,000 units

Problem 3
1. Contribution margin per unit P1,050 - P630) = P420 per unit
2. Contribution margin ratio P420 / P1,050 = 40%
3. Break-even-point in units P630,000 / P420,000 = 1,500 units
Pesos P630,000 / 40% = P1,575,000
4. Sales in units at a desired net profit of P94,500 = (P630,000 + P94,500)/P420 = 1,725 units
Check Sales (P1,725 x P1,050) P 1,811,250 Variable cost (1,725 units x P630) ( 1,086,750)
Contribution margin P 724,500 Total fixed cost ( 630,000) Net income P 94,500

Seatwork 3

1. X100 X150 C800

Sales price P8,800 P14,800 P24,000
Variable cost 7,600 12,000 20,000
Contribution margin P1,200 P 2,800 P 4,000
Sales mix 30% 50% 20%
Weighted average P 360 P 1,400 P 800 = P2,560

BEP in Units P1,080000 / P2,560 421.875 units

Allocation of break-even-units to sales mix

X100 : 421.875 x 30% = 126.5625
X950: 421.875 x 50% = 210.9375
C800: 421.875 x 20% = 84.3750 421.875 units

BEP in Pesos X100 X950 C800

Allocated units 126.5625 210.9375 84.3750
Times unit sales price P8,800 P14,800 P24,000
Peso sales P1,113,750 P3,121,875 P2,025,000 P6,259,920 Variable cost
961,875 2,531,250 1,687,500 5,180,625
Contribution margin P151,875 P 590,625 P 337,500 P1,080,000 Fixed cost
(151,875) (590,625) ( 137,500) P1,080,000

2. BEP in units + (P1,080 + P1,000) / P2,560 = 812.5 units Allocated to X100: 812.5 x 30%
243.75 x 8,800 P2,145,000 X950 812.5 x 50% 406.25 x 14,800 6,012,500 C800 812.5 x 20%
162.50 x 24,000 3,900,000 P12,057,500 Variable cost
X100 243.75 x 7,600 P1,852,500 X950 406.25 x 12,000 4,875,000 C800 162.50 x 20,000
 3,250,000 9,977,500 Contribution margin P 2,080.000 Total fixed costs 1,080,000 Net
income P 1,000,000

Problem 5
Contribution margin per unit = P100 – (25 – 15 – 20) P40 per unit Contribution ratio per
unit = P40 / P100 40% 1. A. BEP in units = P20,400 / P40 510 units b. BEP in pesos = P20,400 /
40% P51,000

2. Contribution margin (40 x 1,400 units) P 56,000 Fixed costs (20,400)

Net income P 35,600

3. Units sold at desired profit of P25,000 = P20,400 + P25,000/P40 1,135 units 4.

Total peso sales is (20,480 + 40,000)/ 40% = P151,000 / 15,000 P100.67 per unit

Problem 6
1. BEP in units P626,400/ P8 78,300 units 2. BEP in pesos P626,400/40% P1,566,000
3. Contribution margin ratio P8/P20 40% 4. Current sales - BE sales = Margin of safety
= P2,480,000 – P1,566,000 = P914,000 5. Margin or safety ratio = P914,000 /
P2,480,000 36.85%

Problem 7
1. BEP in pesos P100,000 / 20% P500,000 2. Margin of safety = P750,000 - P500,000
P250,000 3. Margin of safety ratio = P250,000 / P750,000 33.33% 4. Degree of
operating leverage = CM / Net income = P150,000/P50,000 3 times 5. DOL 3 x 30%
= 90% increase income, i.e. P50,000 x 1.9 P95,000