MANAGERIAL ACCOUNTING

S.Y. 2022 - 2023

BSBA 2A
BAJO, Andrei Luis D.
CORTEZ, Carl Maui A.
DUMA, Jasmine Paulne A.
PARAS, Megg Stephen J.
SORIANO, Maynard D.

CLOTHING LINE
Overview
The business enterprise specialized in Clothing Line. The Business would have variety of size
ranges of Shirts to S-XXL. The clothes material will focus on cotton and when it comes to
printing designs, the business will use silk screen.

“Designed for sightseer-mind and at the same time with an ideal of class and comfort. Built for
all genders who seek a presentable look with a gentle cotton fabric with sleek design. Because
who would want to wear irritable clothes? When you can wear it on the go and be presentable
and at the same time be comfortable all-day with our (insert brand name).”

FINANCIAL ASPECT

This Chapter talks about the Financial report of Clothing Line. Financial Ascpect consists of
Proponents’ Capitalization, One Month of Pre-operating Expenses, Projected Sales, Cost of
Goods Sold, Selling Expenses, Administrative Expenses, Table of Depreciation, Table of
Compensation, Product Costing, Mark-Up and SRP.
Objectives:
● To outline the Financial Assumptions of the Company;
● To determine the Capital Contribution of the Proponents needed in establishing the
business;
● To identify the Projected income of the business for one (1) month;
● To know the Projected Cost of the Company for one (1) month;
 ● To compute for the Company’s Statement of Goods Sold;
● To compute for the Business’ Cost of Sales.

Statement of Assumptions

The following are the Statement of Assumptions of the Company’s financial statements
by the Clothing Line.

1. The business operation will start in December 2022.

2. The type of business General Corporation and will be engaged in manufacturing and
selling Shirts. The Proponents’ total capital investment is (₱) which is acquired by the
number of shares each shareholder bought with the amount of (₱) per share. Each
Shareholders’ Capital Contribution is () (₱) which gives them () shares.
3. The Company will use the fiscal year in preparing the financial statements.
4. The Projected Sales are expected to increase () (month).
5. The Quantity Purch
6. Selling Price of T-Shirt is ₱600.00.
7. There will be Rent expense for the first month of the business operation.
8. There will be Utilities Expense for the first month of the business operation.
9. Office Supplies Expense will remain constant.
10. Deliver Expense will remain constant.
11. Advertising Expense will remain constant.
12. Business is subjected to Regular Corporate Income Tax (RCIT) which is 30% of its net
profit based in SEC.27 Income tax rate on Domestic Corporation.
13. Permit and License for the first month of the business operation are Barangay
Clearance, Mayor’s Permit, BIR REgistration and SEC Business Registration.
14. PhilHealth contribution will remain constant.
15. SSS contribution will remain constant.
16. Pag-ibig contribution will remain constant for the next (five years) of operation.
17. Each proponent has a (15%) dividend on the business Net income for the first month of
operation with the total pf (75%) and the (15%) will be considered as Remained profit
that will be used for the future purposes of business.
18. The supplier will provide the delivery of the product to the Company, therefore there is
no freight-in.
 Capital Contribution

POSITIONS PROPONENTS AMOUNT PERCENTAGE

Ms. Jasmine Pauline Duma ₱ 20,000 20%

Mr. Andrei Luis Bajo ₱ 20,000 20%

Mr. Megg Stephen Paras ₱ 20,000 20%

Mr. Carl Maui Cortez ₱ 20,000 20%

Mr. Maynard Soriano ₱ 20,000 20%

TOTAL ₱ 100,000 100%

Table 1. It shows the contribution of each proponent for the business capital. The proponents
decided to contribute twenty thousand pesos (₱ 20,000) each or 20% of the total contribution to
get the total capital of one hundred thousand pesos (₱ 100,000) which is the initial investment
to start the operation of the business.

COMPENSATION SCHEME ALLOWANCE

Partners Pag-ibig Philhealth SSS Allowance Net

Fund Contribution Contribution per month Allowance
Contribution

Bajo, Andrei 200 360 1,180 1,200 1,000

Luis

Cortez, Carl 200 360 1,180 1,200 1,000

Maui

Duma, 200 360 1,180 1,200 1,000

Jasmine
 Pauline

Paras, Megg 200 360 1,180 1,200 1,000

Stephen

Soriano, 200 360 1,180 1,200 1,000

Maynard

TOTAL 1,000 1,800 5,900 6,000 5,000

(monthly)

Table 2. It shows the the Compensation of the proponents in a month. Each partner will be
given ₱ 9,000.00 in a month but they only receive a on hand cash of ₱ 6,260.00.

Pre-operating Expense

Capital Contribution 100,000

Less: Pre-operating cost

Paper printing Equipment and 15,700

Tools

T-Shirt Equipment 20,000

Furniture & Fixtures 6,000

Raw Materials 20,000

Rent Expense 5,000

License Expense 4,000

 Utilities Expense 3,500

Advertising Expense 3,000

Delivery Expense 200

Office Supplies 400

Total Cost 77,800

Cash on Hand 22,200

Table 3. shows the one (1) month pre-operating expense of the business. The pre-operating
expense of the business is ₱ 77,800.00 and a cash on hand of ₱ 22,200.00.

One Month Projected Sale

Product Selling Price Monthly Demand Monthly Income

Clothing 600 50 30,000

Table 4. shows the one (1) month projected sales in pesos of the business. Monthly demand is
considered as the target number of quantities that the company was aimed to produce and sell.
The monthly income of the business is ₱ 30,000.00 per monthly demand.

Clothing Line Company

Statement of Cost of Good Sold

For the Month Ended December 31, 2022

Direct (Raw) Materials Used 46,700

 Direct Labor 45,000

Manufacturing Costs 91,700

Add: Beginning Work in Process 30,000

Cost of Good Placed in Process 121,700

Less: Ending Work in Process 30,000

Cost of Goods Manufactured 91,700

Add: Beginning Finished Goods 40,000

Cost of Goods Available for Sale 131,700

Less: Ending Finished Goods 60,000

Cost of Cost of Good Sold 71,700

Table 5. shows the cost of good sold of the business.  The business cost of goods sold total is
₱ 71, 700.00.

Selling Expense

Advertising 3,000

Commision 9,000

Delivery 200

Total 12,200

Table 6. shows the selling expense of the business product. To calculate the selling expense
simply adds the total advertising expense, commission, delivery. The business selling expense
total is ₱ 12,200.00.
 Administrative Expense

Equipments

Silk Machine 21,200

Printer 4,500

Laptop 20,000

Desk 3,000

Chair 2,000

Paper 400

Total 51,100

Utilities

Electric Bill 1,300

Internet BIll 1,500

Water Bill 500

Total 3,300

License and 4,000 4,000

Permit

Total 58,400

Table 7. shows the administrative expense of the business. To calculate the administrative
expense simply adds the total equipment expense, utilities expense, license and permit. The
business administrative expense total is ₱ 58,400.00.
 TABLE OF DEPRECIATION

Machine and Unit Cost Quantity Total Cost Estimated Depreciation

Equipment Life Expense

Silk Screen 5,000 4 20,000 5 years 3,800

Printing
Machine

Printer 4,500 1 4,500 1 year 1,750

Laptop 20,000, 1 20,000, 6 years 3,167

Total 29,500 44,500 15,217

Furnitures Unit Cost Quantity Total Cost Estimated Depreciation

and Fixtures Life Expense

Desk 3,000 1 3,000 6 years 2,583

Chair 200 10 2,000 5 years 1,700

Total 3,200 5,000 4,283

Table 8. shows the depreciation of the business machine, equipment, furniture and fixture.  To
calculate the total depreciation simply adds the total machine, equipment, furniture and fixtures
depreciation expense. The business depreciation total is ₱ 4, 283.00.

Clothing Product Cost

 T-shirt Cost per piece 200

Silkscreen paint per liter 200

Etiketa 25

Total Cost 425

Table 9. shows the product cost of the business product. To calculate the product cost imply
adds the cost of raw materials that need in the product. The business product cost total is ₱
425.00.

Mark-Up Computation

Price (PhP) Service Cost Mark-Up

(Php) (Php)

Clothing 600 425 175

Total 425 175

Table 10. shows the Mark-Up of the business product.  To calculate the mark-up simply minus
the selling price of the product and the product cost. The business mark up total is ₱ 175.00.

SRP

Product Cost 425

Mark-Up 175

Total 600
Table 11. shows the Suggested Retail Prices ( SRP ) of the product. To calculate the SRP of
the product simply adds the total product cost and mark-up product. The clothing business total
product cost is ₱ 425.00 per design and the proponents decided to sell the product at the
amount of ₱ 600.00 per piece.