Step 1: Compute the total number of activities for all the products

Activity Model X Model Y Model Z

Set Ups 100 150 250
Shipments 200 225 275
Engineering Change Orders 15 10 5
 Step 2: Compute for the rates per activity

Total Activity
= 500 number of set ups Set Ups
= 700 number of shipments Shipments
= 30 engineering change orders Engineering Change Orders
Overhead Cost Divided by Total Activities Rates
P45,000 / 500 = P90 per set up
P70,000 / 700 = P100 per shipment
P90,000 / 30 = P3,000 per engineering change orders

Step 3: Compute for the overhead cos

Step 2: Compute for the overhead cos

eering change orders

Step 3: Compute for the overhead cost attributable to Model X.

Activity Rates Per Activity Multiplied by Number of Activity for

Model X
Set Ups P90 x 100 =
Shipments P100 x 200 =
Engineering Change Orders P3,000 x 15 =
Total

Step 2: Compute for the overhead cost attributable to r14

Activity Cost Pool Rates Per Activity Multiplied by Number of Activity for
r14
Assembly P10.81 x 1,080 machine huors =
Processing Orders P35.34 x 60 order =
Inspection P69.70 x 20 inspection hours =
Total
11674.8
2120.4
1394
15189.2 30.9983673469
Total Overhead
for Model X
P9,000
P20,000
P45,000
P74,000

Total Overhead
for r14 Step 4: Compute for the overhead cost per unit of Model X
P11,674.80
P2,120.4 Overhead Cost Per Total Overhead Cost for Model X
=
P1,394 Unit of Model X Units Produced of Model X
P15,189.20
Overhead Cost Per P74,000
=
Unit of Model X 2,000

Overhead Cost Per = P37

Unit of Model X

Step 3: Compute for the overhead cost per unit of r14

Overhead Cost Per Total Overhead Cost for r14

=
Unit of r14 Units Produced of r14

Overhead Cost Per P15,189.20

=
Unit of r14 490

Overhead Cost Per = P30.99836735 or P31

Unit of r14
Step 1: Compute for the rates per activity cost pool

Activity Cost Pool Total Cost Divided by Total Activities

Assembly P313,490 / 29,000 machine hours =
Processing Orders P49,476 / 1,400 orders =
Inspection P73,882 / 1,060 inspection-hours =
 Rates
P10.81 per machine hour
P35.34 per order
P69.70 per inspection hour

Step 4: Compute for the average cost per unit of product R14

Average Cost per Unit = Direct Material Cost

of Product R14 per Unit

Average Cost per Unit = P46.42

of Product R14

Average Cost per = P97.64

Unit of Product R14

97.64
+ Direct Labor Cost + Overhead Cost Per
per Unit Unit

+ P20.22 + P31.00
Step 1: Compute for the overhead cost attributable to r14

ACCOUNTS
a. Work in Process Inventory

To record materials used for the period.

b. Work in Process Inventory

To record direct labor for the period.

c. Work on Process Inventory

To record applied overhead for the period.

d. Manufacturing Overhead

To record manufacturing cost for the period.

e. Finished Goods Inventory

To record finished goods for the period.

 ACCOUNTS DEBIT CREDIT Computations
Work in Process Inventory $ 62,000
Raw Materials Inventory $ 62,000
To record materials used for the period.

Work in Process Inventory $ 85,000

Factory Labor $ 85,000
To record direct labor for the period.

Work on Process Inventory $ 68,000 80% of Direct Labor

Manufacturing Overhead $ 68,000
To record applied overhead for the period.

Manufacturing Overhead $ 74,000

Cash $ 74,000
To record manufacturing cost for the period.
Direct MateriaDirect Labor
Finished Goods Inventory $ 136,000 Job 101 $ 22,000 $ 30,000
Work in Process Inventory $ 136,000 Job 103 $ 24,000 $ 20,000
To record finished goods for the period. Total Finished Goods

Job Total Cost Divided by

Job 101 $ 76,000 /
Job 103 $ 60,000 /
Computations

Overhead Cost Total

$ 24,000 = $ 76,000 Job 102
$ 16,000 = $ 60,000 Direct Materials $ 16,000
$ 136,000 Direct Labor $ 35,000
Overhead Cost $ 28,000 80% of Direct Labor
Total Cost of Job 102 $ 79,000
Units Produced Unit Cost
1,000 = $ 76
200 = $ 300
 Total
$ 79,000

Journal a. $ 62,000
Journal b. $ 85,000
Journal c. $ 68,000
Total Debits $ 215,000
Less:
Journal e. $ 136,000
Remaining Balance $ 79,000
 DEBIT CREDIT DEBIT CREDIT
c 90
Cash 4,500
h 500
b 900 f 2,000
Accounts Receivable 27,000
h 500
Repair supplies 500
Furnitures and Fictures 10,000 d 500
Repair equipment 33,100
Accounts payable 5,750 g 390
Notes payable 25,250
Rockwell, capital 56,000 a 500
Rockwell, drawing 6,000 a 500
Service income 135,300 f 2,000
Repair supplies expense 15,000
Rent expense 40,000
Salaries expense 60,000 e 500
Utilities expense 25,000
Total 221,100 222,300

Cash 3,910
Accounts Receivable 26,400
Repair supplies 500
Furnitures and Fictures 9,500
Repair equipment 33,100
Total Assets 73,410

Accounts payable 5,360

Notes payable 25,250
Total Liabilities 30,610

Service income 133,300

Less:
Repair supplies expense 15,000
Rent expense 40,000
Salaries expense 60,500
Utilities expense 25,000 140,500
Net Income/(Loss) (7,200)

Rockwell, capital 56,500

Less:
Rockwell, drawing 6,500
Net Loss 7,200 13,700
Ending Capital 42,800
DEBIT CREDIT
3,910

26,400

500
9,500
33,100
5,360
25,250
56,500
6,500
133,300
15,000
40,000
60,500
25,000
220,410 220,410
 Debit Credit Debit Credit
Cash 329,400
Accounts Receivable 100,000 b. 84,000
Notes Receivable 300,000
Office Supplies 15,600
Prepaid Insurance 26,400
Gym equipment 460,000
Furnitures and fixtures 120,500
Accounts Payable 156,300 c. 54,400
Greenbelt, Capital 1,240,000 d. 80,000
e. 400
Service Income 344,400
f. 4,000
Salaries Expense 30,000
Rent Expense 43,000
Taxes and Licenses 8,600
Advertising Expense 11,600 e. 400
Utilities Expense 9,400
Total 1,389,500 1,805,700

Service Income 340,000

Less:
Salaries Expense 30,000
Rent Expense 43,000
Taxes and Licenses 8,600
Advertising Expense 12,000
Utilities Expense 9,400 103,000
Net Income 237,000

Cash 392,400
Accounts Receivable 184,000
Notes Receivable 300,000
Office Supplies 15,600
Prepaid Insurance 26,400
Gym equipment 460,000
Furnitures and fixtures 120,500
Total Assets 1,498,900
 Debit Credit
392,400
184,000
300,000
15,600
26,400
460,000
120,500
101,900
1,160,000
340,000

30,000
43,000
8,600
12,000
9,400
1,601,900 1,601,900
Step 1: Compute for the Value of 1 right

Market Value of Share Right-On - Subcription Price

Value of 1 right =
Number of rights to purchase one share + 1

P125 - P100
Value of 1 right =
4+1

P25
Value of 1 right =
5

Value of 1 right = P5

Step 2: Compute for the total value of the rights received.

Total Value of the Rights = Value of 1 right x number of rights

Total Value of the Rights = P5 x 25,000

Total Value of the Rights = P125,000

Step 3: Make the journal entry for the receipt of share rights.

Share Rights P125,000

Investment in Equity Securities P125,000
To record receipt of rights.

Step 4: Compute for the Cash to be paid for the exercise.

Total Number of Rights

Cash to be paid = Subscription Price x
Rights required to purchase 1 share

25,000
Cash to be paid = P100 x
4

Cash to be paid = P100 x 6,250

Cash to be paid = P625,000

Step 5: Make the journal entry for the exercise of share rights.

Investment in Equity Securities P750,000

Cash P625,000
Share Rights P125,000
To record exercise of rights.
 Step 1: Compute for the Value of 1 right

Market Value of Share Right-On - Subcription Price

Value of 1 right =
Number of rights to purchase one share

P125 - P100
Value of 1 right =
4

P25
Value of 1 right =
4

Value of 1 right = P6.25

Step 2: Compute for the total value of the rights received.

Total Value of the Rights = Value of 1 right x number of rights

Total Value of the Rights = P6.25 x 25,000

Total Value of the Rights = P156,250

Step 3: Make the journal entry for the receipt of share rights.

Share Rights P156,250

Investment in Equity Securities P156,250
To record receipt of rights.

Step 4: Compute for the Cash to be paid for the exercise.

otal Number of Rights Total Number of Rig

Cash to be paid = Subscription Price x
equired to purchase 1 share Rights required to purcha

25,000
Cash to be paid = P100 x
4

Cash to be paid = P100 x 6,250

Cash to be paid = P625,000

Step 5: Make the journal entry for the exercise of share rights.

Investment in Equity Securities P781,250

Cash P625,000
Share Rights P156,250
To record exercise of rights.
On - Subcription Price
hase one share

mber of rights

Total Number of Rights

Rights required to purchase 1 share