Cost Concepts

1 .Campus Carriers Co. manufactures and sells backpacks to college students. Campus Carriers
operates a factory in Small Town and two stores in College Town and University City.
Classify the following costs incurred by Campus Carriers as Direct Materials, Direct Labor,
Factory Overhead or Selling and Administrative Expense.

a. Rent paid to lease the store in College Town. SA

b. Canvas fabric. DM

c. Wages paid to students distributing advertising fliers in University City. SA

d. Sewing machine operator’s wages. DL

e. Building depreciation on the factory building. FO

f. Thread. FO

g. The cost of transporting the backpacks from the factory in Small Town to the
Univeristy City store. SA

h. Depreciation of the racks and shelves at the College Town Store. SA

i. Factory manager’s salary. FO

j. Security guard at the factory. FO

k. Store manager’s salary. SA

l. Electricity to power sewing machines. FO

m. Electricity to light the College Town store. SA

2. Given the following information for Moore Corporation, prepare the necessary journal entries, Commented [DAL1]: RMI 45,500
assuming that the Raw Material Inventory account contains both direct and indirect A/P 45,500
material. Commented [DAL2]: WIP 33,000
MOH 5,000
a. Purchased raw material on account P45,500. RMI 33,000
b. Put material into production: P28,000 of direct material and P5,000 of indirect Commented [DAL3]: WIP 61,750
material. MOH 33,250
c. Accrued payroll of P95,000, of which 65 percent was direct and the remainder was SP 95,000
indirect. Commented [DAL4]: MOH 42,000
d. Incurred and paid other overhead items of P42,000. CASH 42,000
e. Transferred items costing P92,500 to finished goods. Commented [DAL5]: FGI 92,500
f. Sold goods costing P79,900 on account for P134,200. WIP 92,500
Commented [DAL6]: A/R 134,200
SALES 134,200

COGS 79,900
FGI 79,900
3. Helmer Sporting Goods Company manufactured 100,000 units in 2019 and reported
the following costs:

Sandpaper P 32,000 Leasing costs - plant P 384,000

Materials handling 320,000 Depreciation - equipment 224,000
Coolants & lubricants 22,400 Property taxes - equipment 32,000
Indirect manufacturing labor 275,200 Fire insurance - equipment 16,000
Direct manufacturing labor 2,176,000 Direct material purchases 3,136,000
Direct materials, 1/1/19 384,000 Direct materials, 12/31/19 275,200
Finished goods, 1/1/19 672,000 Sales revenue 12,800,000
Finished goods, 12/31/19 1,280,000 Sales commissions 640,000
Work-in-process, 1/1/19 96,000 Sales salaries 576,000
Work-in-process, 12/31/19 64,000 Advertising costs 480,000
Administration costs 800,000

Required:

a. What is the amount of direct materials used during 2019? Commented [DAL7]: BEG 384,000
b. What manufacturing costs were added to WIP during 2019? Purch 3,136,000
END (275,200)
c. What is cost of goods manufactured for 2019? DM used 3,244,800
d. What is cost of goods sold for 2019?
Commented [DAL8]: DM used 3,244,800
DL 2,176,000
Sand 32,000
M&H 320,000
4. Messinger Manufacturing Company had the following account balances for the C&L 22,400
IL 275,200
quarter ending March 31, unless otherwise noted:
Lease 384,000
Depre-Equip 224,000
Work-in-process inventory (January 1) P 140,400 P.Tax 32,000
Work-in-process inventory (March 31) 171,000 FI 16,000
Finished goods inventory (January 1) 540,000 MC 6,726,400
Finished goods inventory (March 31) 510,000 Commented [DAL9]: MC 6,726,400
B.WIP 96,000
E.WIP (64,000)
Direct materials used 378,000 CGM 6,758,400
Indirect materials used 84,000
Commented [DAL10]: CGM 6,758,400
Direct manufacturing labor 480,000 B.FG 672,000
Indirect manufacturing labor 186,000 E.FG (1,280,000)
COGS 6,150,400
Property taxes on manufacturing plant building 28,800
Salespersons' company vehicle costs 12,000
Depreciation of manufacturing equipment 264,000
Depreciation of office equipment 123,600

Miscellaneous plant overhead 135,000

Plant utilities 92,400
General office expenses 305,400
Marketing distribution costs 30,000

Required:
 a. Prepare a cost of goods manufactured schedule for the quarter.
b. Prepare a cost of goods sold schedule for the quarter.

5. Using the following information find the unknown amounts. Assume each set of
information is an independent case.

a. Merchandise Inventory Purchases P420,000

Cost of goods sold 446,000
Beginning balance 82,000
Ending balance ?

b. Direct Materials Beginning balance P 14,000

Ending balance 28,000
Purchases 96,000
Direct materials used ?

c. Work-in-process Inventory Ending balance P 44,000

Cost of goods manufactured 42,000
Beginning balance 16,000
Current manufacturing costs ?

d. Finished Goods Inventory Cost of goods manufactured P124,000

Ending balance 40,000
Cost of goods sold 122,000
Beginning balance ?