Gaceta, Judy Ann M.

BSA-3B

Problem 5 - ABM Company

Department 1 Department 2
Materials Conversion Materials Conversion
Actual EP EP Actual EP EP

Started/received P60,000 P 40,000

Completed 40,000 P40,000 P40,000 30,000 P 30,000 P 30,000

IP, end 20,000 20,000 15,000 10,000 5,000 8,000

60,000 60,000 55,000 40,000 35,000 38,000

Costs charged to the department

Cost from preceding dept. P720,000 P18.00
Cost added in the dept.

Materials 480,000 8.00 245,000 7.00

Labor 330,000 6.00 190,000 5.00
Overhead 220,000 4.00 114,000 3.00
Total costs added P1,030.000 P18.00 P549,000 P15.00
Total costs P1,030,000 P18.00 P 1,269,000 P33.00

Total costs accounted for as follows:

C&T (P40,000 x 18) P720,000 (P30,000 x 33) P990,000

IP end

Cost from preceding dept. (10,000 x 18) 180,000

Materials (P20,000 x 8) 160,000 ( 5,000 x 7) 35,000

Labor (P15,000 x 6) 90,000 ( 8,000 x 5) 40,000

Overhead (P15,000 x 4) 60,000 310,000 ( 8,000 x 3) 24,000 P 279,000

Total cost as accounted for P 1,030,000 P 1,269,000