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ACCTG135 Exercise - Answers

The document provides examples and problems related to cost accounting. It includes information about direct labor, raw materials, work in process inventory, finished goods inventory, factory overhead, cost of goods sold, and purchases. Financial statements and schedules are prepared on a yearly basis and include the cost of goods sold statement, statement of comprehensive income, and statement of financial position.

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1K views

ACCTG135 Exercise - Answers

The document provides examples and problems related to cost accounting. It includes information about direct labor, raw materials, work in process inventory, finished goods inventory, factory overhead, cost of goods sold, and purchases. Financial statements and schedules are prepared on a yearly basis and include the cost of goods sold statement, statement of comprehensive income, and statement of financial position.

Uploaded by

Klarissemay Montallana
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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ACCTG135 Cost Accounting and Control March 11, 2024

Exercise #4

Problem 1

List the items given below (1-15) and for each item indicate the appropriate letter or letters, the
schedule and/or financial statement(s) in which the item will appear. The schedule and financial
statements are prepared on a yearly basis.

A. Cost of goods sold statement


B. Statement of Comprehensive Income
C. Statement of Financial Position

The following items are found in its ledger and accompanying data

A 1. Direct labor
A 2. Raw materials inventory, January 1
A, C 3. Work in process inventory, December 31
A 4. Finished goods inventory, January 1
A 5. Factory overhead applied
B 6. Depreciation on office equipment
A 7. Work in process inventory, January 1
A, C 8. Finished goods inventory, December 31
A 9. Cost of goods manufactured
A 10. Cost of goods available for sale
A 11. Cost of materials purchased
C 12. Accumulated depreciation - office equipment
A 13. Direct materials used
A 14. Total manufacturing cost
C 15. Factory machinery
Problem 2
Far Eastern Manufacturing Company has developed the following information for the year ended
December 31, 2022.

Raw Materials Inventory, January 1 P 218,750


Purchases 312,500
Raw Materials Inventory, December 31 156,250
Direct Labor 337,500
Factory Overhead (120% of direct labor cost) ?
Work in Process Inventory, January 1 112,500
Work in Process Inventory, December 31 150,000
Finished Goods Inventory, January 1 125,000
Finished Goods Inventory, December 31 100,000

Required: Cost of goods sold statement for the year ended December 31, 2022.

Solution:

Raw Materials Inventory, January 1 P 218,750


Add: Purchases 312,500
Total Materials Available for Use 531,250 1 point
Less: Raw Materials Inventory, December 31 (156,250)
Total Materials Used in Production 375,000 1 point
Add: Direct Labor 337,500
Factory Overhead (337,500 x 120%) 405,000 2 points
Total Manufacturing Cost 1,117,500 1 point
Add: Work in Process Inventory, January 1 112,500
Total Goods in Process 1,230,000 1 point
Less: Work in Process Inventory, December 31 (150,000)
Cost of Goods Manufactured 1,080,000 1 point
Add: Finished Goods Inventory, January 1 125,000
Total Goods Available for Sale 1,205,000 1 point
Less: Finished Goods Inventory, December 31 (100,000)
Cost of Goods Sold 1,105,000 2 points
Total: 10 points
Problem 3
East Company submits the following data for May, 2022.

Direct labor cost P 200,000


Cost of goods sold 687,500
Factory overhead – applied at 150% of direct labor costs.
Inventories May 1, 2022 May 31, 2022
Finished goods P 187,500 P 152,500
Work in process 161,500 155,000
Materials 155,000 143,750

Required: Cost of goods sold statement for May, 2022.

Solution: (Work-back approach)

Materials, May 1, 2022 155,000


Add: Purchases ---? 134,750 (squeezed) 2 points
Total Materials Available for Use 289,750 1 point
Less: Materials, May 31, 2022 143,750
Total Materials Used in Production 146,000 1 point
Add: Direct labor cost 200,000
Factory overhead (P200,000 x 150%) 300,000 2 points
Total Manufacturing Cost 646,000 1 point
Add: Work in process, May 1, 2022 161,500
Total Goods in Process 807,500 1 point
Less: Work in process, May 31, 2022 155,000
Cost of Goods Manufactured 652,500 1 point
Add: Finished Goods, May 1, 2022 187,500
Total Goods Available for Sale 840,000 1 point
Less: Finished Goods, May 31, 2022 152,500
Cost of Goods Sold 687,500 << start here, going up
Total: 10 points

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