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Chapter 6
Chapter 6
= 1,000 units
2, AVERAGE
Received Issued Balance
1 1,600 x 6.00 9,600
5 400 x 7.00 2,800 2,000 x 6.20 12.400
9 400 x 8.00 3,200 2,400 x 6.50 15,600
16 800 x 6.50 5,200 1,600 x 6.50 10,400
24 600 x 9.00 5,400 2,200 x 7.18 15,800
27 1,000 x 7.18 7,180 1,200 x 7.18 8,620
2. WEIGHTED AVERAGE
A. PERPETUAL
1. FIFO
Received Issued Balance
1 300 x 17.50 5,250
8 200 x 1750 3,500 100 x 17.50 1,750
10 900 x 18.00 16,200 100 x 17.50 1,750
900 x 18.00 16,200
18 100 x 17.50 1,750 400 x 18.00 7,200
500 x 18.00 9,000
20 1,200 x 18,25 21,900 400 x 18.00 7,200
1,200 x 18.25 21,900
25 400 x 18.00 7,200
600 x 18.25 10,950 600 x 18.25 10,950
2. AVERAGE
Received Issued Balance
1 300 x 17.50 5,250
8 200 x 17.50 3,500 100 x 17.50 1,750
10 900 x 18.00 16,200 1,000 x 17.95 17,950
18 600 x 17.95 10,770 400 x 17.95 7,180
20 1,200 x 18.25 21,900 1,600 x 18.175 29,080
25 1000 x 18.175 18,175 600 x 18.175 10,905
Problem 9 – Bedrock Company
a. Loss due to spoiled work is spread over all jobs
1. Work in process 12,400,000
Materials 3,600,000
Payroll 4,000,000
FO Applied 4,800,000
The increase in the unit cost is due to the loss absorbed by the remaining
good units computed as follows
Cost (100 x 1,160) = 116,000
Selling price 100,000
Loss 16,000/9900 = 1.62
Problem 10 – Kyralei Co.
A)1. RAGC is charged with the cost of defective units
a. Work in process 1,760,000
Materials (2,000 x 400) 800,000
Payroll (2,000 x 200) 400,000
FO Applied (400,000 x 140%) 560,000
b. FO Control 240,000
Materials 40,000
Payroll 80,000
FO Applied 120,000
c. Finished goods 1,800,000
Work in process 1,800,000
B)
1. Original cost 2.000 units 1,760,000
Additional cost 232,000
Total costs 1,992,000
Divide by 2,000
Cost per unit 996.00
2. Charged to all production (FO rate should be 150% of direct labor cost)
a. Work in process 2,500,000
Materials 1.000,000
Payroll 600,000
FO Applied (20,000 x 150%) 900,000
b. FO Control 125.000
Materials 50,000
Payroll 30,000
FO Applied (30,000 x 150%) 45.000
Multiple choice
THEORIES PROBLEMS
1, a 1. a 6. c 11. c 16. a 21. c
2, b 2 c. 7. b 12. d 17. b 22. d
3, d 3. b 8. a 13. d 18. d 23. a
4, c 4. b 9. a 14. b 19. c 24. a
5, b 5. a 10. c 15. b 20. b 25. d
CHAPTER 6 – ACCOUNTING FOR MATERIALS
Page 2
Total ordering cost = No. of orders x ordering cost
= 15 x 200
= P 3,000
Page 3
Problem 6 –
1. FIRST-IN, FIRST-OUT
Received Issued Balance
1,600 x 6.00 9,600`
5 400 x 7.00 2,800 1,600 x 6.00 9,600
400 x 7.00 2.800
9 400 x 8.00 3,200 1,600 x 6.00 9,600
400 x 7.00 2,800
400 x 8.00 3,200
16 800 x 6.00 4,800 800 x 6.00 4,800
400 x 7.00 2,800
400 x 8.00 3,200
24 600 x 9.00 5,400 800 x 6.00 4,800
400 x 7.00 2,800
400 x 8.00 3,200
600 x 9.00 5,400
27 800 x 6.00 4,800 200 x 7.00 1.400
200 x 7.00 1,400 400 x 8.00 3,200
600 x 9.00 5,400
2, AVERAGE
Received Issued Balance
1 1,600 x 6.00 9,600
5 400 x 7.00 2,800 2,000 x 6.20 12.400
9 400 x 8.00 3,200 2,400 x 6.50 15,600
16 800 x 6.50 5,200 1,600 x 6.50 10,400
24 600 x 9.00 5,400 2,200 x 7.18 15,800
27 1,000 x 7.18 7,180 1,200 x 7.18 8,620
Page 3
2. WEIGHTED AVERAGE
A. PERPETUAL
1. FIFO
Received Issued Balance
1 300 x 17.50 5,250
8 200 x 1750 3,500 100 x 17.50 1,750
10 900 x 18.00 16,200 100 x 17.50 1,750
900 x 18.00 16,200
18 100 x 17.50 1,750 400 x 18.00 7,200
500 x 18.00 9,000
20 1,200 x 18,25 21,900 400 x 18.00 7,200
1,200 x 18.25 21,900
25 400 x 18.00 7,200
600 x 18.25 10,950 600 x 18.25 10,950
2. AVERAGE
Received Issued Balance
1 300 x 17.50 5,250
8 200 x 17.50 3,500 100 x 17.50 1,750
10 900 x 18.00 16,200 1,000 x 17.95 17,950
18 600 x 17.95 10,770 400 x 17.95 7,180
20 1,200 x 18.25 21,900 1,600 x 18.175 29,080
25 1000 x 18.175 18,175 600 x 18.175 10,906
b. FO Control 24,000
Materials 4,000
Payroll 8,000
2. Charged to all production (FO rate should be 150% of direct labor cost)
a. Work in process 75,000
Materials 25,000
Payroll 20,000
FO Applied (20,000 x 150%) 30,000
b. FO Control 1,250
Materials 500
Payroll 300
FO Applied (300 x 150%) 450
Problem 15 -
____________________
EOQ = \/ 2 z 100,000 x 413
25.30
a. Investment costs
Invoice price P 125.00
Excise tax ( 125.00 x 4%) 5.00
Insurance on shipment 2.00
Total P 132.00
b. Carrying costs
Cost of capital ( 132.00 x 15%) P 19.80
Inventory insurance 3.00
Inventory tax ( 125.00 x 2%) 2.50
Total P 25.30
c. Ordering costs
Shipping permit P 300.00
Processing costs 23.00
Unloading 90,00
Total P 413.00
TRUE/FALSE
1. True 6. False 11. True
2. False 7. False 12. False
3. False 8. False 13. False
4. True 9. False 14. False
5. True 10. True 15. False
Multiple choice
1, a 6. b 11. a 16. d 21. d 26. a
2, b 7. b 12. a 17. b 22. c 27. a
3, d 8. a 13. c 18. b 23. b 28. b
4, a 9. c 14. c 19. a 24. c 29. d
5, c 10. b 15. d 20. b 25. d 30. d