CHAPTER 1-TEST MATERIAL 3

Prime Cost= Direct Materials + Direct Labor

1
Direct Materials,Beginning ₱174,000.00
Add: Purchases 1,500,000.00
Direct Materials Available for use 1,674,000.00
Less:Direct Materials, Ending (132,000.00)
Direct Materials 1,542,000

Direct Labor
Direct labor hours worked ₱22,000.00
Pay per hour x 45 990,000.00
Prime Cost 2,532,000

Overtime Pay Hours ₱1,000.00

Pay (P45/2, time and half) x 22.5 ₱22,500.00

Factory Supplies 60,000.00

Supervision Fees 175,000.00
Factory Supplies Used 300,000.00
Factory Overhead ₱ 557,500.00

Raw Material Used ₱326,000.00

Raw Materials Ending 85,000.00
Raw Materials Beginning (75,000.00)
Cost of Raw Materials purchased ₱ 336,000.00

Direct Material ₱326,000.00

Direct Labor 225,000
Manufacturing Overhead ₱225,000.00
x 60% 135,000.00
Factory Cost of the Period ₱ 686,000.00

5
Cost of Goods Sold
Finished Goods, ending ( 2,040,000-320,000) ₱ 6,900,000.00
Finished Goods, beginning (2,040,000.00)
Cost of Goods Manufactured 6,850,000.00
Work in Process, Ending (800,000x90%) 720,000.00
Work in Process, Beginning (800,000.00)
Total Manufacturing Cost ₱ 6,500,000.00

Direct Materials Purchased ₱ 3,200,000.00

Less: Increase in Direct Materials (180,000.00)
Direct Materials Cost ₱ 3,020,000.00

Total Manufacturing Costs ₱ 6,500,000.00

Cost of Materials (3,020,000.00)
Conversion Cost ₱ 3,480,000.00

Conversion Costs ₱ 3,480,000.00

Divide: Rate of Factory Overhead Applied 160%
Direct Labor Cost ₱ 2,175,000.00

Direct Labor Cost ₱ 2,175,000.00

Multiply: Rate of Factory Overhead applied 60%
Factory Overhead Cost ₱ 1,305,000.00

Prime Costs 6,750,000

Conversion costs 4,500,000
divide by 150% / 150%
Direct Labor (3,000,000)
Raw Materials Used 3,750,000
Decrease in Raw Materials (250,000)
Raw Materials Purchased P 3,500,000

7 and 8
Johnson Company
Statement of Cost of Goods Manufactured and Sold
July 31, 20xx

Direct Materials Used:

Raw Materials, beg P 4,400,000.00
 ADD: Purchases 9,000,000.00
Raw Materials Available ₱ 9,000,000.00
LESS: Raw Material, End (2,800,000.00)
Indirect Materials (850,000.00)
Direct Materials Used: ₱ 9,750,000.00
Direct Labor 6,500,000.00
Factory Overhead:
Indirect materials ₱ 850,000.00
Indirect labor 560,000.00
Supervision fee 1,250,000.00
Depreciation 900,000.00
Rent 720,000.00
Utilities 360,000.00
Factory Overhead: ₱ 4,640,000.00
TOTAL MANUFACTURING COST ₱ 20,890,000.00
ADD: Work in Process, beg 3,000,000.00
Total Costs of work put into process ₱ 23,890,000.00
LESS: Work in Process, end (2,400,000.00)
Cost of Goods Manufactured ₱ 21,490,000.00

Cost of Goods Manufactured ₱ 21,490,000.00

ADD: Finished Goods, beg 2,400,000.00
Goods Availbale for Sale ₱ 2,400,000.00
LESS: Finished Goods, end (2,950,000.00)
Cost of Goods Sold ₱ 20,940,000.00
divide by 75% /75%
TOTAL SALES P 27,920,000

9
Cost of Goods Manufactured
Add: Finished Goods, Jan 1 ₱ 17,400,000.00
Cost of Goods Available for Sale 1,500,000.00
₱ 18,900,000.00

Less: Cost of Sales

Finished Goods, End of 1st Quarter (16,800,000.00)
₱ 2,100,000.00
Finished Goods, Jan 1
Less: Finished Goods, End ₱ 1,500,000.00
Change in finished goods inventory (2,100,000.00)
₱ 600,000.00
10
Raw Materials, beg
Add: Net Purchase ₱ 84,000.00
Raw Materials Available 46,000.00
Less: Raw Materials, End 130,000.00
Direct Materials Used (50,000.00)
Direct Labor (P63,000/.75) ₱ 80,000.00
Factory Overhead 84,000.00
Total Manufacturing Cost 63,000.00
Add: Work in Process, beg ₱ 227,000.00
Total Cost of Work Put into Process 80,000.00
Less: Work in Process, End ₱ 307,000.00
Cost of Goods Manufactured (95,000.00)
Add: Finished Goods, beg ₱ 212,000.00
Cost of Goods Available for Sale 60,000.00
Less: Finished Goods, End ₱ 272,000.00
Cost of Goods Sold (78,000.00)
₱ 194,000.00

11

Beginning:
Materials (50,000+30,000) ₱ 80,000.00
Labor (80,000+60,000) 140,000.00
Overhead (120,000+90,000) 210,000.00
Cost added:
Materials (80,000+50,000) ₱ 130,000.00
Labor (100,000+80,000) ₱ 180,000.00
Overhead (150,000+120,000) ₱ 270,000.00
Finished goods, end ₱ 1,010,000.00

12

Applied overhead
Actual Overhead ₱ 435,000.00
Over applied (420,000.00)
₱ 15,000.00

13
Raw Materials, beginning ₱ 85,000.00
Purchases 970,000.00
LESS: Raw Materials, End (120,000.00)
Raw Materials used ₱ 935,000.00
Direct Labor (48,000 x 20) 960,000.00
Overhead 576,000.00
Total Manufacturing Cost ₱ 2,471,000.00
Work in Process, beginning 90,000.00
LESS: Work in Process, end (271,000.00)
Cost of Goods Manufactured ₱ 2,290,000.00
Finished Goods, beginning 180,000.00
LESS: Cost of Goods Sold ( 1,050,000/60%) (1,750,000.00)
Finished Goods, End ₱ 720,000.00

14

P 1050000/60% = P 1750000 x 160% ₱ 2,800,000.00

15

d. Increase in RM by P 7,500

Raw Materials, beginning ( 47,500-37,500) ₱ 10,000.00

Raw Materials Puurchased 37,500.00
Raw Materials Available for use ₱ 47,500.00
LESS: Raw Materials issued to production (30,000.00)
Raw Materials, end ₱ 17,500.00

Raw Materials, end ₱ 17,500.00

Raw Materials, beginning (10,000.00)
Increase in Raw Material ₱ 7,500.00
Direct Labor ₱990,000.00
Factory Overhead 557,500.00
Conversion Cost ₱ 1,547,500.00
Conversion Cost ₱ 7,920,000.00
Multiply: Direct Labor rate over Overhead rate *38.5/69.3
Direct Labor ₱ 4,400,000.00

Direct Materials (P13,680,000-4,400,000) ₱ 9,280,000.00

Direct Labor 4,400,000.00
Factory Overhead (P7,920,000-4,400,000) 3,520,000.00
Total Manufacturing Cost ₱ 17,200,000.00
Add: Work in Process, Jan 1 1,200,000.00
Total Cost of Work Put into Process ₱ 18,400,000.00
Less: Cost of Goods Manufactured 17,400,000.00
Work in Process, End ₱ 1,000,000.00

Work in Process, Jan 1 ₱ 1,200,000.00

Less: Work in Process, End 1,000,000.00
Change in Work in Process ₱ 200,000.00
Raw Materials, beginning ₱ 85,000.00
Purchases 970,000.00
LESS: Raw Materials, End (120,000.00)
Raw Materials used ₱ 935,000.00
Direct Labor (48,000 x 20) 960,000.00
Overhead 576,000.00
Total Manufacturing Cost ₱ 2,471,000.00
Work in Process, beginning 90,000.00
LESS: Work in Process, end (271,000.00)
Cost of Goods Manufactured ₱ 2,290,000.00
Finished Goods, beginning 180,000.00
LESS: Cost of Goods Sold ( 1,050,000*60%/40%) (1,575,000.00)
Finished Goods, End ₱ 895,000.00

1,050,000*60%/40%= Cost of Goods Sold ₱ 1,575,000.00

multiply by *140%
Sales Revenue ₱ 2,625,000.00