Adeva, Maria Kathreena Andrea H.

BSA 2-11

ACCO 20073 – COST ACCOUNTING & CONTROL

APPLICATIONS

Module 1: Cost Accounting Concepts & Classification

1 Old Navy Manufacturing Company

(a) Journal Entries to record the above and post the entries to T-Accounts

a. Raw Materials 240,000

Accounts Payable 240,000

b. Work in Process 168,000

Manufacturing Overhead 12,000
Raw Materials 180,000

c. Factory Payroll 150,000

Accrued Payroll 150,000

Work in Process 120,000

Manufacturing Overhead 30,000
Factory Payroll 150,000

d. Manufacturing Overhead 12,000

Accumulated Depreciation 12,000

e. Manufacturing Overhead 1,500

Taxes Payable 1,500

f. Manufacturing Overhead 4,320

Prepaid Insurance 4,320

g. Manufacturing Overhead 5,000

Utilities Payable 5,000

h. Work in Process 64,820

Manufacturing Overhead 64,820

i. Finished Goods 339,615

Work in Process 339,615
 j. Accounts Receivable 472,067
Sales 472,067

k. Cost of Goods Sold 314,711

Finished Goods 314,711

(b) Prepare a Statement of Cost of Goods Manufactured and Sold, in good form.

Old Navy Manufacturing Company

Statement of Cost of Goods Manufactured and Sold
July 31, 2020

Raw Materials Used:

RM inventory, July 1 80,000
Add: Purchases 240,000
Raw Materials 320,000
Less: Inventory, July 31 140,000
Indirect Materials Used 12,000 152,000 168,000
Direct Labor 120,000
Manufacturing Overhead
Indirect Materials Used 12,000
Indirect Labor 30,000
Depreciation-Plant Equipment 12,000
Insurance 4,320
Miscellaneous OH 6,500 64,820
Total Manufacturing Costs 352,820
Add: Work in Process, July 1 100,000
Total Cost of work put into Process 452,820
Less: Work in Process, July 31 -113,205
Cost of Goods Manufactured 339,615
Add: Finished Goods, July 1 60,000
Goods Available for sale 399,615
Less: Finished Goods, July 31 -84,904
Cost of Goods Sold 314,711

2 M&M Company

Reconstruct the entries related to the above problem.

Raw Materials 1,640,000

Accounts Payable 1,640,000
 Work in Process 1,288,000
Manufacturing Overhead 322,000
Raw Materials 1,610,000

Factory Payroll 1,020,000

Accrued Payroll 1,020,000

Work in Process 840,000

Manufacturing Overhead 180,000
Factory Payroll 1,020,000

Manufacturing Overhead 500,000

Utilities Payable 360,000
Accumulated Depreciation 120,000
Accounts Payable 20,000

Work in Process 1,002,000

Manufacturing Overhead 1,002,000

Finished Goods 3,290,000

Work in Process 3,290,000

Accounts Receivable 4,684,500

Sales 4,684,500

Cost of Goods Sold 3,470,000

Finished Goods 3,470,000

3 Jansport Manufacturing Company

Prepare a Statement of cost of Goods Manufactured and Sold in good form.

Jansport Manufacturing Company

Statement of Cost of Goods Manufactured and Sold
December 31, 2020

Raw Materials Used:

RM inventory, Jan 1 450,000
Add: Purchases 4,500,000
Raw Materials 4,950,000
Less: Inventory, Dec 31 1,350,000
Indirect Materials Used 230,000 1,580,000 3,370,000
 Direct Labor 2,100,000
Manufacturing Overhead (70% of direct labor cost) 1,470,000
Total Manufacturing Costs 6,940,000
Add: Work in Process, Jan 1 720,000
Total Cost of work put into Process 7,660,000
Less: Work in Process, Dec 31 -650,000
Cost of Goods Manufactured 7,010,000
Less: Increased in Finished Goods Inventory -186,000
Cost of Goods Sold 6,824,000
Overapplied OH -45,000
Adjusted Cost of Goods Sold 6,779,000

4 Johnson Company

Prepare a Statement of cost of Goods Manufactured and Sold in good form.

Johnson Company
Statement of Cost of Goods Manufactured and Sold
December 31, 2020

Raw Materials Used:

RM inventory, Jan 1 4,400,000
Add: Purchases 9,000,000
Raw Materials 13,400,000
Less: Inventory, Dec 31 2,800,000
Indirect Materials Used 850,000 3,650,000 9,750,000
Direct Labor 6,500,000
Manufacturing Overhead
Factory supplies used 850,000
Indirect labor 560,000
Supervision fee 1,250,000
Depreciation 900,000
Rent 720,000
Utilities 360,000 4,640,000
Total Manufacturing Costs 20,890,000
Add: Work in Process, Jan 1 3,000,000
Total Cost of work put into Process 23,890,000
Less: Work in Process, Dec 31 -2,400,000
Cost of Goods Manufactured 21,490,000
Add: Finished Goods, Jan 1 2,400,000
Goods Available for sale 23,890,000
Less: Finished Goods, Dec 31 -2,950,000
Cost of Goods Sold 20,940,000
Module 2: Elements of Product Costs

1 Puregold Company

Give the journal entries to record the above transactions

Raw Materials 510,000

Accounts payable 510,000

Work in Process 344,250

Manufacturing Overhead 38,250
Raw materials 382,500

Raw Materials 5,900

Work in Process 5,100
Manufacturing Overhead 800

Accounts payable 4,000

Raw Materials 4,000

Work in process 50,000

Accounts payable 50,000

Raw Materials 107,000

Accounts payable 107,000

Work in Process 123,560

Manufacturing Overhead 30,890
Raw materials 154,450

2 FAB Manufacturing Company

Compute for raw materials usage and inventory using FIFO periodic.

Units Unit Cost Total

Inventory, August 5,000 2.00 10,000
Purchases, Aug. 7 6,000 2.50 15,000
Issuance, Aug. 7 9,000 -5,000 2.00 -10,000
-4,000 2.50 -10,000
Purchases, Aug. 12 8,000 2.30 18,400
Issuance, Aug. 14 9,000 -2,000 2.50 -5,000
-7,000 2.30 -16,100
Purchases, Aug. 15 9,000 2.25 20,250
 Issuance, Aug. 21 9,000 -1,000 2.30 -2,300
-8,000 2.25 -18,000
Purchases, Aug. 22 10,000 2.40 24,000
Issuance, Aug. 28 9,000 -1,000 2.25 -2,250
-8,000 2.40 -19,200
Purchases, Aug. 29 10,000 2.35 23,500
Raw materials, ending 12,000 28,300

Raw material available for sale:

Units Unit Cost
5,000 2.00 10,000
6,000 2.50 15,000
8,000 2.30 18,400
9,000 2.25 20,250
10,000 2.40 24,000
10,000 2.35 23,500 111,150
Less: Raw materials, ending -28,300
Raw materials usage 82,850

3 Sharp Enterprises

Determine the amount of total payroll and distribute the total payroll to
Work in process and factory overhead. (Please refer to PD442 for the late shift
premium and overtime rate)

Regular pay 16,300 x P67 1,092,100

Overtime Premium 300 x P67 x 30% 6,030
Shift Premium 6,000 x P67 x 15% 60,300
Total Payroll 1,158,430

Work in process 1,092,100

Manufacturing overhead 66,330
Accrued payroll 1,158,430

4 Bulls Company

1. Determine the total factory payroll for the period, refer to PD 442 for the late
shift and overtime premium.

Regular pay 39,800 x P67 2,666,600

Overtime Premium 800 x P67 x 30% 16,080
Shift Premium 14,000 x P67 x 10% 93,800
Total Factory Payroll 2,776,480
 2. Determine the total factory costs.

Raw Materials Used:

RM inventory, Oct 1 134,000
Add: Purchases 1,093,400
Raw Materials 1,227,400
Less: Inventory, Dec 31 -250,000 977,400
Direct Labor 2,666,600
Manufacturing Overhead (80% of direct labor cost) 2,133,280
Total Factory Costs 5,777,280

5 Rocky Tailoring

a) Compute for the pre-determined overhead rate

Total Estimated Overhead 200,000

Total Estimated DLH 20,000 P10/dlh

b) Compute for the total overhead applied to the job

DLH
Design department 25
Sewing department 320
Beading department 200
Total direct labor hours 545
Pre-determined overhead rate x 10
Total overhead applied to the job 5,450

c) Determine the total cost of the job

Direct materials 30,000

Direct Labor:
Design department 25 x P25 625
Sewing department 320 x P15 4,800
Beading department 200 x P20 4,000 9,425
Manufacturing overhead 5,450
Total cost of the job 44,875

d) Determine the billing price

Total cost of the job 44,875

Mark-up on cost 30% 130%
Billing price 58,337.5
6 GAR Company

Allocate the service costs using the following method:

a. Direct method

Personnel Administration Assembly Finishing

Direct costs 200,000 500,000
Personnel: (200,000)
1/4 50,000
3/4 150,000
Administration: (500,000)
18/48 187,500
30/48 312,500
Total allocated service cost 237,500 462,500

b. Step method

Administration Personnel Assembly Finishing

Direct costs 500,000 200,000
Administration: (500,000)
2/50 20,000
18/50 180,000
30/50 300,000
Personnel: (220,000)
1/4 55,000
3/4 165,000
Total allocated service cost 235,000 465,000

c. Algebraic method

Personnel Administration Assembly Finishing

Direct costs 200,000 500,000
Personnel:
3/43 7%
10/43 23%
30/43 70%
Administration:
2/50 4%
18/50 36%
30/50 60%
 Personnel:
= 200000 + 4% (500,000 + 7%)
= 200,000 + 20,000 + 0.28%
= 220,000 / 0.9972
= 220,618

Administration:
= 500,000 + (220,618 x 7%)
= 500,000 + 15,443
= 515,443

Personnel Administration Assembly Finishing

220,618 515,443
Personnel: (220,618)
23% 50,742
70% 154,433
Administration: (515,443)
36% 185,559
60% 309,266
Total allocated service cost 236,301 463,699

7 Camera Film Company

a. Determine the amount of overhead applied to each box of chemical under ABC
and traditional costing

ABC Method

Cost driver Production Pool rate Total

Machine set ups 4 P2,000 8,000
Raw materials 10,000 P2 20,000
Hazardous materials 2,000 P5 10,000
Inspections 20 P75 1,500
Machine hours 500 P10 5,000
Applied Overhead 44,500
Divide by total number of boxes 2,000
Overhead applied to each box 22.25/box

Traditional Costing

Pre-determined OH rate:
Total Budgeted Overhead 625,000
Total Budgeted MHR 20,000 31.25/mhr
 Actual machine hours 500
Pre-determined OH rate x 31.25
Applied Overhead 15,625
Divide by total number of boxes 2,000
Overhead applied to each box 7.8125/box

b. Determine the manufacturing cost per box under ABC and traditional method.

ABC Method

Direct materials 425,000

Direct labor 400,000
Manufacturing overhead 44,500
Total manufacturing cost 869,500
Divide by total number of boxes 2,000
Manufacturing cost per box 434.75/box

Traditional Costing

Direct materials 425,000

Direct labor 400,000
Manufacturing overhead 15,625
Total manufacturing cost 840,625
Divide by total number of boxes 2,000
Manufacturing cost per box 420.31/box
Module 3: Job Order Costing System

1 BJ Manufacturing Company

(1) Prepare T accounts for the following: Raw Materials Inventory, Work in
Process Inventory, Finished Goods Inventory, Manufacturing Overhead, Cost of
goods sold and Sales. Enter the beginning balances.

(2) Enter the transactions for the year directly to the T-Accounts

Raw materials inventory Work in process inventory

Beg. Bal 168,000 785,000 Issued Beg. Bal 210,000 2,490,000 Completed
Purchases 826,000 Materials 755,000
End. Bal 209,000 Labor 1,000,000
MOH 800,000
End. Bal 275,000

Finished goods inventory Manufacturing overhead

Beg. bal 182,000 182,000 Jobs sold Actual 30,000 800,000 Applied
Completed 2,490,000 1,345,000 Jobs sold 116,000
End. Bal 1,145,000 190,000
250,000
40,000
500,000
Under 326,000

Cost of goods sold Sales

182,000 254,800
1,345,000 1,883,000
Under 326,000 2,137,800
1,853,000

(3) Prepare job cost sheets for the jobs in process

Job 101: Completed and in the warehouse

Materials Labor Overhead Total
Beg. Bal 105,000
Additions 180,000 150,000 120,000 450,000
Total 555,000
To FG (555,000)
 Job 102: Completed and in the warehouse
Materials Labor Overhead Total
Beg. Bal 105,000
Additions 125,000 200,000 160,000 485,000
Total 590,000
To FG (590,000)

Job 103: Completed and sold

Materials Labor Overhead Total
Beg. Bal 0
Additions 150,000 250,000 200,000 600,000
Total 600,000
To FG (600,000)

Job 104: Completed and sold

Materials Labor Overhead Total
Beg. Bal 0
Additions 205,000 300,000 240,000 745,000
Total 745,000
To FG (745,000)

Job 105: Unfinished

Materials Labor Overhead Total
Beg. Bal 0
Additions 95,000 100,000 80,000 275,000
Total 275,000

Job 005: Completed and sold

Materials Labor Overhead Total
Beg. Bal 85,000
Total 85,000
To FG (85,000)

Job 006: Completed and sold

Materials Labor Overhead Total
Beg. Bal 97,000
Total 97,000
To FG (97,000)
 (4) Determine the balances of the three inventory accounts at the end of the year
Raw materials inventory Work in process inventory
Beg. Bal 168,000 785,000 Issued Beg. Bal 210,000 2,490,000 Completed
Purchases 826,000 Materials 755,000
End. Bal 209,000 Labor 1,000,000
MOH 800,000
End. Bal 275,000
Finished goods inventory
Beg. Bal 182,000 182,000 Jobs sold
Completed 2,490,000 1,345,000 Jobs sold
End. Bal 1,145,000

(5) Prepare a Statement of Costs of Goods Manufactured

BJ Manufacturing Company
Statement of Cost of Goods Manufactured and Sold
December 31, 2020

Work in Process, Jan 1 210,000

Add: Direct materials 755,000
Direct Labor 1,000,000
Manufacturing Overhead 800,000
Total Manufacturing Costs 2,555,000
Total Cost of work put into Process 2,765,000
Less: Work in Process, Dec 31 -275,000
Cost of Goods Manufactured 2,490,000
Add: Finished Goods, Jan 1 182,000
Goods available for sale 2,672,000
Less: Finished Goods, Dec 31 -1,145,000
Cost of Goods Sold 1,527,000
Underapplied OH 326,000
Adjusted Cost of Goods Sold 1,853,000

2 The Best Manufacturing Company

Journal entries to record the transactions

Raw Materials 99,200

Accounts Payable 89,280
Material price variance 9,920

Work in Process 96,000

Material quantity variance 3,200
Raw materials 99,200
 Work in Process 144,000
Labor rate variance 3,040
Labor efficiency variance 7,200
Accrued payroll 139,840

Manufacturing Overhead 135,300

Various accounts 135,300

Work in Process 128,000

Manufacturing Overhead 128,000

Finished goods 368,000

Work in Process 368,000

Accounts Receivable 588,800

Sales 588,800

Cost of Goods Sold 368,000

Finished Goods 368,000

3 Sunshine Manufacturing Company

1) Predetermined OH rate
Assembly Finishing

Manufacturing Overhead 960,000 600,000

Cost driver 80,000 75,000
Pre-determined OH Rate 12/DLH 8.00/MHR

2) Amount of overhead applied to each job

Alpha Beta Charlie Delta Echo Total

Assembly (DLH) 96,000 168,000 108,000 72,000 48,000 492,000
Finishing (MHR) 52,000 88,000 80,000 60,000 24,000 304,000
Total 148,000 256,000 188,000 132,000 72,000 796,000

3) Total manufacturing costs per job

Assembly Alpha Beta Charlie Delta Echo Total

Direct materials 25,000 30,000 40,000 50,000 25,000 170,000
Direct labor 44,000 77,000 49,500 33,000 22,500 226,000
MOH 96,000 168,000 108,000 72,000 48,000 492,000
Total 165,000 275,000 197,500 155,000 95,500 888,000
 Finishing Alpha Beta Charlie Delta Echo Total
Direct materials 12,000 25,000 30,000 2,000 5,000 74,000
Direct labor 9,900 11,000 19,250 17,600 15,400 73,150
MOH 52,000 88,000 80,000 60,000 24,000 304,000
Total 73,900 124,000 129,250 79,600 44,400 451,150

4) Gross profit per job assuming a markup on cost of 40%

Alpha Beta Charlie Delta Echo Total

Bal. 1/1 35,000 50,000 85,000
Assembly 165,000 275,000 197,500 155,000 95,500 888,000
Finishing 73,900 124,000 129,250 79,600 44,400 451,150
Total 273,900 449,000 326,750 234,600 139,900 1,424,150
Markup on cost 40% 40% 40% 40% - - -
Gross profit 109,560 179,600 130,700 - - 419,860

4 Evergreen Manufacturing Company

Give the entries to record the following:

1) The cost of production

Work in Process 720,000

Raw Materials 300,000
Accrued payroll 180,000
Manufacturing Overhead 240,000

2) To record the completion of the job assuming the rejected units is ascribed to a
company failure which is normal.

Spoiled goods 16,000

Manufacturing Overhead 32,000
Work in Process 48,000

Finished goods 672,000

Work in Process 672,000

Accounts Receivable 1,008,000

Sales 1,008,000

Cost of goods sold 672,000

Finished goods 672,000
5 Blims Manufacturing Company

1. Give the entries to record the above assuming that the defective job is due to
customer specification.

Work in Process 870,000

Raw Materials 625,000
Accrued payroll 120,000
Manufacturing Overhead 125,000

Work in Process 19,600

Accrued payroll 9,600
Manufacturing Overhead 10,000

Finished goods 889,600

Work in Process 889,600

2. Determine the manufacturing cost per unit.

Total cost incurred 870,000

Cost of rework 19,600
Total manufacturing cost 889,600
Divide by total production 500
Manufacturing cost per unit 1,779.20
Module 4: Process Costing System

1 Colgate Palmolive Philippines

Prepare a cost of production report for the months of June and July using:

(1) FIFO method

Colgate Palmolive Philippines

Cost of Production Report
June 30,2020

Flow of Units & EUP:

EUP
Quantity Schedule Units Materials CC T-in
Work in process, beginning 3,600 60% 33.33% 100%
Transferred in 9,000
Total units accounted for 12,600

Finished and transferred:

Work in process, beginning 3,600 1,440 2,400 -
Started and Completed 6,600 6,600 6,600 6,600
Total 10,200 8,040 9,000 6,600
Work in Process, June 30: 2,400 1,200 600 2,400
Total units as accounted 12,600 9,240 9,600 9,000

Total costs to account:

Work in process, beginning:
Materials 4,050
Conversion costs 2,160
Transferred in 12,330 18,540
Costs added during the period:
Materials 14,784
Conversion costs 2,592
Transferred in 8,460 25,836
Total costs to account 44,376

Cost per EUP:

Materials 14,784 / 9,240 1.6
Conversion costs 2,592 / 9,600 0.27
Transferred in 8,460 / 9,000 0.94
Assignment of Costs:
Finished & Transferred:
Work in process, beginning: 18,540
Materials 8,040 x 1.6 12,864
Conversion costs 9,000 x 0.27 2,430
Transferred in 6,600 x 0.94 6,204
Total cost allocated to F & T 40,038
Work in Process, June 30:
Materials 1,200 x 1.6 1,920
Conversion costs 600 x 0.27 162
Transferred in 2,400 x 0.94 2,256
Total costs as accounted 44,376

(1) WA method

Colgate Palmolive Philippines

Cost of Production Report
June 30,2020

Flow of Units & EUP:

EUP
Quantity Schedule Units Materials CC T-in
Work in process, beginning 3,600 60% 33.33% 100%
Transferred in 9,000
Total units accounted for 12,600

Finished and transferred: 10,200 10,200 10,200 10,200

Work in Process, June 30: 2,400 1,200 600 2,400
Total units as accounted 12,600 11,400 10,800 12,600

Total costs to account:

Work in process, beginning:
Materials 4,050
Conversion costs 2,160
Transferred in 12,330 18,540
Costs added during the period:
Materials 14,784
Conversion costs 2,592
Transferred in 8,460 25,836
Total costs to account 44,376
 Cost per EUP:
Materials 18,834 / 11,400 1.6521
Conversion costs 4,752 / 10,800 0.44
Transferred in 20,790 / 12,600 1.65
Total unit cost 3.7421

Assignment of Costs:
Finished & Transferred 10,200 x 3.7421 38,169
Work in Process, June 30:
Materials 1,200 x 1.6521 1,983
Conversion costs 600 x 0.44 264
Transferred in 2,400 x 1.65 3,960
Total costs as accounted 44,376

2 Starlight Manufacturing Company

Prepare a cost of production report--FIFO Method

Flow of Units & EUP:

EUP
Quantity Schedule Units Material X Material Y CC
Work in process, beginning 18,000 100% 75%
Started 66,300
Total units accounted for 84,300

Finished and transferred:

Work in process, beginning 18,000 - - 4,500
Started and Completed 55,800 55,800 55,800 55,800
Total 73,800 55,800 55,800 60,300
Spoilage: Normal 3,090 3,090 3,090 3,090
Abnormal 1,410 1,410 1,410 1,410
Work in Process, Aug. 31: 6,000 6,000 - 1,500
Total units as accounted 84,300 66,300 60,300 66,300
Assignment of Costs:
Finished & Transferred:
Material X 55,800 x 6.00 334,800
Material Y 55,800 x 4.00 223,200
Conversion costs 60,300 x 8.00 482,400
Normal spoilage 3,090 x 18.00 55,620
Total cost allocated to F & T 1,096,020
Work in Process, Aug. 31:
Material X 6,000 x 6.00 36,000
Conversion costs 1,500 x 8.00 12,000 48,000
Abnormal spoilage 1,410 x 18.00 25,380
Total costs as accounted 1,169,400
Module 5: Accounting for Joint Products & By-Products

1 Sheryl Company

1. Allocate the joint cost using the following method:

Sales Value Method

Product Units SP Total sales

per unit Value
A 1,000 x P10 10,000
B 2,000 x P20 40,000
C 3,000 x P20 60,000
D 4,000 x P10 40,000
Total 10,000 150,000

Cost ratio: total joint cost / total sales value

= 100,000 / 150,000
= 66.67%

Product Total sales x Cost ratio Allocated

Value JC
A 10,000 x 66.67% 6,667
B 40,000 x 66.67% 26,667
C 60,000 x 66.67% 40,000
D 40,000 x 66.67% 26,667
Total 150,000 100,000

Weighted Average Method

Product Units Weight Weighted

Units
A 1,000 x 4 lbs. 4,000
B 2,000 x 3 lbs. 6,000
C 3,000 x 2 lbs. 6,000
D 4,000 x 1 lb. 4,000
Total 10,000 20,000

Weighted average UC: total joint cost / total sales value

= 100,000 / 20,000
=5
 Product Weighted x Weighted Allocated
Units average UC JC
A 4,000 x 5 20,000
B 6,000 x 5 30,000
C 6,000 x 5 30,000
D 4,000 x 5 20,000
Total 20,000 100,000

2. Determine the value of ending inventory of C assuming that 500 units are on hand
at the end of a period under each two methods.

Sales Value Method

Product C
Cost per unit:
Allocated joint cost
Units produced
40,000
3,000
= 13.33 x 500 units on hand = 6,667

Weighted Average Method

Product C
Cost per unit:
Allocated joint cost
Units produced
30,000
3,000
= 10 x 500 units on hand = 5,000

2 Lucky Company

1. Allocate the joint costs using sales value method.

Product Total Sales Allocated Joint Cost

Lucky Him 1,000,000 300,000

Lucky Her 3,000,000 900,000
Total 4,000,000 1,200,000
2. Compute the gross profit if:

(a) main products are sold at split off point

Sales: 4,000,000
ADD: Other Revenue: 50,000
Total Revenue: 4,050,000
LESS: COGS:
COGM: Main Prod. 1,200,000
COGM: By-Prod. 55,000 -1,255,000
Gross Profit 5,305,000

(b) main products are processed further to become Nissins and Ramens.

Sales: 8,160,000
ADD: Other Revenue: 50,000
Total Revenue: 8,210,000
LESS: COGS:
COGM: Main Prod. 2,280,000
COGM: By-Prod. 55,000 -2,335,000
Gross Profit 10,545,000