RCA SAMPLE EXAMS SOLUTIONS

1.

(1)
Quantity schedule:
Units received from Department A 20,000
Units transferred to finished goods 15,000
Units still in process (all materials, 60%
conversion cost) 5,000 20,000

Transferred in
Equivalent production: from Dept. A Materials Conversion
Transferred to finished goods 15,000 15,000 15,000
Ending inventories 5,000 5,000 3,000
20,000 20,000 18,000

(2)
Cost per equivalent unit for conversion cost:
P9000/ 18,000= P.50 per unit

2.
KRAKER COMPANY
Cost of Production Report
For January, 19-

Quantity Schedule:
Units started in process 10,000
Units transferred to finished goods 7,000
Units still in process (95% conversion cost
, all material A and B) 2,000
Normal spoilage (5% x 9,000) (90%
conversion cost, all material A) 450
Abnomal spoilage (1,000 - 450) (90%
conversion cost, all material A) 550 10,000

Cost charged to the department:

Cost added by department: Total cost Unit cost
Material A P13,370 P1.40
Material B 4,500 0.5
Labor 37,580 4
Factory overhead 46,975 5
Total cost o be accounted for

Cost Accounted for as Follows:

 Transferred to finished goods (7,000 x P10.90) P76,300
Transferred to factory overhead:
Materials A (550 x P1.4) P770
Labor (495 x P4) 1,980
Factory overhead (495 x P5) 2,475 5,225
Work in process---ending inventory:
Materials A (2,000 x P1.4) P2,800
Materials B (2,000 x P.50) 1,000
Labor (2,000 x .95 x P4) 7,600
Factory overhead (1,900 x P5) 9,500 20,900
Total cost accounted for P102,425

Additional Computation:
Equivalent Production; Material A = 7,000 + 2,000 + 550= 9,550 units
Material B = 7,000 + 2,000= 9,000 units
Labor and actory overhead = 7,000 + (2,000 x .95) +
(550 x .90)= 9,395 units
Unit costs:Material A = P13,370/9,550 = P1.4 per unit
Material B = P4,500/9,000 = P.50 per unit
Labor = P37,580/9,395 = P4 per unit
Factory overhead = P46,975/9,395 = P5 per unit

3.

(1) Average Costing:

Materials Labor and Factory
units overhead units
(a) Transferred out 12,000 12,000
Add ending inventory (work this period) 2,400 1,200
Equivalent production 14,400 13,200

(b) Transferred out 7,500 7,500

Completed and on hand 700 700
Add ending inventory(work this period) 1,000 400
Equivalent production 9,200 8,600

(c) Transferred out 20,000 20,000

Add ending inventory (work this period) 2,500 1,250
Equivalent production 22,500 21,250
(2) Fifo Costing
Materials Labor and Factory
Units Overhead Units
(a) Transferred out 12,000 12,000
Less beginning inventory(all units) 6,600 6,600
Started and finished this period 5,400 5,400
Add beginning inventory(work this period) 4,400 4,400
Add ending inentory(work this period) 2,400 1,200
Equivalent production 12,200 11,000

(b) Transferred out 7,500 7,500

Less beginning inventory(all units) 0 0
Started and finished this period 7,500 7,500
Completed and on hand 700 700
Add ending inentory(work this period) 1,000 400
Equivalent production 9,200 8,600

(c) Transferred out 20,000 20,000

Less beginning inventory(all units) 2,000 2,000
Started and finished this period 18,000 18,000
Add beginning inventory(work this period) 1000 1600
Add ending inentory(work this period) 2,500 1,250
Equivalent production 21,500 20,850

4.

(1)
Work in process 1,160,000
Materials 1,600,000
Work in process 928,000
Payroll 928,000
Factory overhead control 559,600
Materials, payroll, accruals, and various credits 559,600
Work in process 551,000
Applied factory overhead 551,000
Applied factory overhead 551,000
Factory overhead control 551,000

Overhead rate;
Estimated factory overhead / Estimated production
P570,000/30,000 = P19 per mixer
 (2)
Underapplied factory overhead: P559,600 - P551,000 = P8,600

Factory overhead Subsidiary Ledger General Ledger

General factory
Machining Painting Assembly Cost pool Debit Credit
(a) Factory overhead Control 750.00 300.00 300.00 150.00 1,500.00
Accumulated depr.---Buildings 1,500.00
(b) Factory ovehead control 6,000.00 2,000.00 1,200.00 400.00 9,600.00
Accumulated depr.---Machinery 9,600.00
(c) Factory ovehead control 550.00 203.33 170.00 76.67 1,000.00
Accrued Property Tax Payable 1,000.00
(d) Factory ovehead control 450.00 180.00 160.00 60.00 850.00
Accrued Workmen's compensation 850.00
(e) Factory ovehead control 600.00 60.00 90.00 750.00
Accrued Power Overhead 750.00
(f) Factory ovehead control 450.00 180.00 180.00 90.00 900.00
Accounts Payable 900.00
(g) Factory ovehead control 1,800.00 2,300.00 410.00 4,510.00
Materials 4,510.00

5.

(a) Perpetual inventory records and the average costing method Average cost
January 1. Beginning balance 2,000 units @ P9.775= P19,550
6. Received 1,500 units @ P10.3 = 15,450
Balance 3,500 units 35,000 P10
7. Issued 1,800 units @ P10 = 18,000
Balance 1,700 units 17,000 10.00
26. Received 3,400 units @ P10.75 = 36,550
Balance 5,100 units 53,550 10.50
31 Issued 3,200 units @ 10.50 = 33,600
Balance 1,900 units P19,950 10.50

Cost of Materials used: P 18000

33,600
P 51600
6.
(1)
Work in Process (P8.4 x 52) P 436.80
Factory overhead control[(P8.4 x 1/2) x (52-40)] 80.4
Payroll 487.2

(2)
Work in Process 487.20
Payroll 487.20

7.

BOSQUE BROTHERS
Budget f Sales Revenue and Gross Profit
For the year 19B
Average Cost of Gross
Sales sales price Goods Sold Profit Sales Gross
Products (in pounds) per pound per Pound per Pound Revenue Profit
Barb 20,000 P 37.00 P 28.00 P 9.00 P 740,000 P 180,000
Shir 10,500 18.72 18.00 0.72 196,560 7,560
Bett 7,500 23.92 23.10 0.82 179,400 6,150
38,000.00 P 1,115,960 P 193,710